Foreclosure Cost Might Be Separated from General Fund in Brooklyn Park

October 13th, 2008

Brooklyn Park along with other cities that have been heavily affected by foreclosure rates to impose expenses will, according to a new legislation, be separated from that of the general fund. Though the people living there will continue to pay taxes for foreclosure expenses, but the money will not be taken from other expenses of the city. The levy limits have been re-enacted by the legislature in 2008 session. It will be operational for those taxes that are to be paid between 2009 and 2011. Bob Schreier, Director of Brooklyn Park Community Development said that foreclosures are a serious concern for the real estate of Brooklyn Park.

He stated, “Cities were concerned with cost of foreclosures and how that impacted levy limits. The feeling was we needed some way to remove these expenses because they’re extraordinary.” Over 1,000 homes in Brooklyn Park are facing foreclosure. This is expected to go up further. According to Cory Kampf, Brooklyn Park Finance Director, a number of special levies are there that can be used by the cities that wont affect the general levy limit although will allow to tax the residents.

PERA employer contribution increases, police and fire wages, benefit increases are some of the other types of special levies that the city will be able to use from 2009 onwards. Foreclosure levy happens to be the five new categories that have been introduced this year. A city to qualify for special levy must have 1.4 percent or above rate of foreclosure in 2007 or should have a rate of foreclosure that is larger than the whole metro area. An amount of up to $2,000 per property can be used by these cities to retake money that has been invested on the properties foreclosed. However, this should not affect the total levy limit.

It has been found that Brooklyn Park makes an expenditure of about $334 for maintaining and tracking vacant and foreclosed homes. The city is going to levy $301,558 by making use of average cost per property to cover up expenses on foreclosures in 2009. The final costs have to be certified by the Commissioner of Revenue. Nearly 83 abatements have been carried out by the city from January to May on foreclosed properties at a cost of $20,000. It has been estimated that an extra of $33,000 will be spent by the close of this year. It is envisioned that Brooklyn Park will witness an extra 300 foreclosures in the real estate in 2008.