LTC 077-2008 Liens~ MIAMIBEACH
OFFICE OF THE CITY MANAGER ~
077-2008 ~ ~''
No. LTC# UTTER. TO COMI~SIOIo
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TO: Mayor Matti H. Bower and Members of the CityCommission r
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FROM: Jor e M. Gonzalez, City Manager ~ ~
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DATE: January 28, 2008 `~' ~
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SUBJECT: LIENS
For some time, the City Commissioners and the Administration have discussed methods of adjusting
the propertylien process so as to avoid theaccumulation of extraordinarylien/fine amounts resulting
from violations (Code, Building, and Fire) on any given property. Various approaches for legislative
adjustment, from capping lien amounts and/or adjusting the Special Master process, have been
discussed. To date, no one solution has been developed to permanently modify the lien process.
In response to questions raised by North Beach Homeowner Associations, the Administration has
recently analyzed the lien process and developed a three part strategy to more globally and
systematically address the property lien process. The three principle elements of the lien process
strategy include: dealing with an existing backlog or inventoryof liens dating a yearormorefromthe
date a fine is imposed; the actual lien process steps; and how the City focuses enforcement efforts
for buildings with or without liens that create a negative impact upon any given neighborhood.
Typically, the subject of liens is referred to and discussed as if it is single faceted. For a longer term
and more sustainable result, the most appropriate solution is multi-part, in order to address the
different elements of the lien process.
Outstandin, Backlog/Inventory of Liens
Citywide, there are approximately 85 liens dating in excess of one year and exceeding $100,000.
The passage of one year of time from the imposition of a fine by the Special Master is significant, as
onlyone yearof jurisdiction is available to the Special Master. The 85 liens have accumulated on
the respective properties fora numberof reasons, including non-compliance, out of state oroutof
country propertyownerswhich may affectthe provision of notice of an infraction, and the accuracy
of the various data bases that the City must use. There is typically a lag time between a property
transaction (for example a sale) and its recording in the data base, typically County tax records. This
lag may affect the notice of a violation or Special Master hearing.
In the overall lien analysis, the outstanding inventorylbacklog of liens exists in large measure as a
result of gaps in the currentprocessflow. If the process can beappropriatelyimpacted atanearlier
stage, this specific category will reduce in volume simply as fewer liens become longer standing.
With a process adjustment and a concerted one time notice and clean up effort, the category of
outstanding old and/or large liens should be virtually eliminated.
The Cityis undertaking a pilot project in the North Beach area to address outstanding liens/fines that
will provide for clean up of the of the overall pool pf outstanding liens in this region and will also
provide data for a task force review discussed in the next section. For the pilot project, all properties
with lienslfines in excess of $50,000 and overa yearold will be noticed; 30 properties are overthe
$100,000 lien amount and 26 are between $50,000 and $100,000. Those properties with violations
still not in compliance will be noticed by the appropriate enforcement agency, and those with
violations that are in compliance will be noticed by the City Manager's Office of the lien/fine and
directed to contact the City to resolve the matter. The notice will not initiate foreclosure, but will
identify that as a next step, if necessary.
Process Adjustment
The lien process for violations involves all of the enforcement agencies of the City, including the
Building Department, the Fire Department and the Code Compliance Division of Neighborhood
Services. The process also involvesthe Office of the CityClerk and the Special Master's Office, the
Office of the City Attorney and potentially the Office of the City Manager.
For purposes of this LTC, liens will only be discussed from the point at which a violation has been
issued by one of the City's departments. While many unpaid City fees may become a lien, such as
utility bills and resort tax, fines and liens associated with an enforcement action of the City tend to be
the largest and more prevalent issue, which is the focus of this memo. The entire compliance
process that precedes the violation often involves months of work by any of the respective
enforcement agencies and also represents the largest share of the respective enforcement
division's workload. As only the lien/fine issue is the focus, this LTC will be limited to that
discussion.
Once a violation has been issued by any one of the City's departments, if compliance can not be
accomplished, it is referred to the Office of the Special Master for a hearing and possible
adjudication. The Special Master hearing process may take over a year for any particular violation
and typically has several opportunities for hearings, status reports and the review and discussion of
extenuating circumstances. Throughout the Special Master process, the respective enforcement
departments maintain a fairly high rate of contact with the violation and its resolution. It is the City's
goal to have the majority of the enforcement and compliance cases addressed in the Special Master
process.
When progress at compliance andlor cooperation ends, the Special Master will typically rule on the
case. If a property owner is found guilty, a daily fine amount will be imposed on the property by order
of the Special Master. A dailyfine amounttypicallyranges from $50 per day to $200 per day. The
Special Master determines the specific amount based on the severity of infraction, whether it is a
repeat violation and the level of cooperation of the property owner. The fine continues to run until
such time as compliance isachieved on the property. Oncecompliance isachieved, thefineceases
to run. A number of the larger lien amounts have accumulated in large sums as a result of non-
complianceand the addition of interest that is assessed on the outstanding fine amount.
It is at this point in the current process where a gap has been observed. After the imposition of fines
and/or liens by the Special Master, there is not a systematic mechanism in place to provide for
ongoing monitoring and status reports. Since the responsibility is highly decentralized, the City
response is not consistent or routine. Personnel changes that routinely occur in the enforcement
divisions ordepartments also lessens the effectiveness of follow up on the status and resolution of
the longer standing issues.
Pending the outcome of the process review discussed in the next section, each of the enforcement
departments is being given clear direction that the responsibility to perform periodic monitoring of
cases that have had afine/lien imposed by the Special Master must be undertaken for their specific
cases. Incases where multiple department violations exist, the departments will have to coordinate
a single party to be responsible forthe monitoring.
Ageneral lack of public knowledge of the Cityenforcementprocess also contributes tothe current
process issues and unresolved fines/liens. Many individuals, particularly not from this state or
country, incorrectly assume that once an enforcement department has signed off and that there is
compliance, the matter is resolved. Some owners do not know that the Special Master process and
the lien and fine process continue totravel on until it is also addressed. Other problems associated
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with noticing the appropriate individuals and/or spending a sufficient amount of time to develop
alternate means of contact enter into the process and further complicate the overall process flow.
The Administration, under the lead of the Office of Budget and Performance Improvement, is
undertaking a formalized process review ofthe enforcement/fine, Special Master and lien process,
in an effort to secure timely compliance on violations. This review will be similar in nature to the
ongoing Building Task Force and will serve as a model for all of the City enforcement agencies to
follow when the review is completed.
One of the specific issues that the process review will assess is whether the City needs to apply its
resources in a different manner to assure greater connectivity between the respective agency and
an unresolved case. Current review suggests that a single point of contact for follow up and
coordination in the office of the Special Mastermaybenecessary. Such a position would be able to
better assure that appropriate notice is given to property owners so that they are aware of the action,
and to coordinate the continued involvement of the appropriate enforcement agency to see the
matter resolved, orthat enforcement or legal efforts are escalated so that a conclusion is reached.
Data gathered from the pilot project on outstanding liens will help define what staff adjustments may
be justified to address work load and process efficiencies.
In the short term, the enforcement agencies are meeting jointly to work on case status and follow up
and to place more emphasis on the unresolved cases and to deal with the pilot project properties.
High Impact Buildings
The final part of the overall lien process is the ability of the City to focus its enforcement attention on
properties which are routinely problematic and thereby create a negative impact on its particular
neighborhood. A propertythateitherreceives alarge numberof violations thatgo unresolved ora
large numberof violations that routinely reoccur even though they are resolved would generally
signal a propertythatdeservesenhanced enforcement attention. It is importantto notethatthese
properties may or may not have liens. -
At the present time, as it should, each of the individual departments successfully focuses its
attention on its specific discipline. There has not been a good mechanism available in the City to
routinely watch for and assess properties that have significant enforcement history across all of the
City's enforcement disciplines. The compliance process review task force will address a sustainable
method to make this important review a part of the City process.
As part of the North Beach pilot program, the Code Compliance Division has taken the lead to
create a working list of properties that are visually and from a known enforcement history
problematic. This list is in addition to the outstanding liens effort as the two areas do not necessarily
coincide. The working list will be reviewed by the interim joint working group of enforcement
agencies to assure that the list captures all disciplines and identifies the highest impact and priority.
Initially a list of 5-10 properties will be established (10 most wanted) for the task force to work on. A
coordinated task force response will be initiated so that all of agencies deal with the problem in a
coordinated fashion to see its resolution. To succeed with the high impact buildings, the
coordinated department effort is required, as typically one department's actions will prompt a
concern in one of the otherdepartments.
In the longer term, the Office of Budget and Performance Improvement process review of the
enforcement/fine, Special Master and lien process will address the systematic monitoring of
problematic propertiesand alsotofocus on securing compliance onviolations in a timeliermanner.
This monitoring activity is one of the functions that might be added to the Special Master's office.
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Conclusion
The short term implementation of the measures identified in the three different parts of the lien
process should effectively address and correct the problems which have been noted in the North
Beach area. The data gathered form the North Beach pilot project will be useful to the Office of
Budget and Performance Improvement process review of the enforcementlfine,Special Master and
lien process to develop longer term City wide improvements to the overall lienlfine process.
Changes to the finellien process will bean added benefit that is accomplished in addressing the
main focus of the study, which is to focus on securing timely compliance on violations. The initial
letter for cleaning up or addressing the inventory of outstanding liens in the North Beach area will be
sent to approximately fifty property owners in the next week. These fifty properties represent the
entire list in the North Beach area of those liens in excess of a year and in excess of $50,000.
The list for problematic properties is being prepared now. As Code is also attempting to address
vacant lots and boarded up properties it will take another week to assemble a comprehensive list
that identifies the properties thatwill be the focus of attention. Atthat pointthe jointworkinggroup
will create a short list of the most impact North Beach properties to receive enhanced enforcement
attention.
JMGIRCM/sam
F:lcmgrl$ALLIBOBILTC - Liens.doc
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