Riverdale is taking the unsual step of auctioning off tax-delinquent homes and commercial buildings next week to recoup more than $130,000 in back taxes.
The auction is the first in recent memory for the city and city officials’ “step of last resort” to collect $132,196.60 in back taxes owed on 57 properties, most of which are single-family homes, said Riverdale City Manager Scott Wood. State law allows a city to collect through sales such as auctions, according to the Georgia Municipal Association.
“ This is the proper legal remedy,” Wood said. “We can’t allow these properties to run indefinitely. This is the best course of action.”
While the properties may be current on county taxes, they’re delinquent with Riverdale, a city of just under 16,000 residents.
The delinquent tax bills range from $677 to $11,000, with some bills stretching back to 2008. It’s a crucial sum considering property taxes in general account for about 28 percent of Riverdale’s $12.4 million general operating budget.
The auction comes just as one of the nation’s three major bond-rating companies lowered the city’s credit-rating a notch. Moody’s Investor Service recently downgraded Riverdale’s rating from Aa3 to A1. The rating change means if the city were to build new major projects it would likely have to borrow money at a slightly higher rate.
"The downgrade reflects the city's moderately-sized, challenged tax base with declining demographic trends and below average wealth indices," Moody's said in a prepared statement. "
“It’s not a reflection of our fiscal management,” Wood said. “It really stems from a relatively stagnant tax digest. It has no effect on us as long as we’re not borrowing money and we have no intention of borrowing.”
Meanwhile, the city’s decision to hold the auction has caught some of the errant taxpayers by surprise.City officials sent letters to property owners notifying them of their tax delinquency and the auction.
“Some people have come forward to pay their bill,” Wood said.
“We should have done it years ago,” Mayor Evelyn Wynn-Dixon said. “I will be happy with whatever (city officials) come up with to work with the people. We’re not about taking people’s property. We just want to work with people. It’s going to be a good thing.”
The auction will be Tuesday at 10 a.m. at Riverdale City Hall, 7200 Church Street. Government Tax Solutions , a private contractor is handling the auction on behalf of the city.
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