By Scott Taylor,Staff Writer

AUBURN – A state legislative committee has rejected a measure that would have exempted quasi-municipal groups from having to pay property taxes.

That means Androscoggin Valley Council of Governments will have to pay almost $78,000 in back property taxes to the city of Auburn, which is moving forward with plans to foreclose on the group’s office building on Manley Road.

AVCOG has until Nov. 28 to settle its tax bill from 2003 to avoid foreclosure.

“We’re treating this like any other property owner,” said Laurie Smith, Auburn’s assistant city manager. “We’re just going through the normal processes, not intending to foreclose if it doesn’t come to that.”

AVCOG is a regional organization that offers planning support and purchasing for municipal governments in Androscoggin, Franklin and Oxford counties. It gets its revenue from dues paid by each member city, including Auburn, which pays about $20,000 per year in dues.

AVCOG has never paid property taxes on its nearly 10,000-square-foot office building. The city didn’t even assess taxes on it until former Assessor Joe Downey did so in 1997, eight years after it was built.

The city repeatedly waived the tax bill, however. Officials maintained the group was exempt until 2003, when City Councilor Bob Mennealy questioned the practice. An interpretation by the city’s lawyer agreed that AVCOG should pay.

The group appealed to the city’s Assessment Review Board last year, but the board agreed that state law did not exempt AVCOG from property taxes. That’s when AVCOG began looking for help from the Legislature.

It’s not up to the state to solve complaints between cities and regional groups, said Chris Barstow, D-Gorham, chairman of the State and Local Government Committee, which voted unanimously against the measure.

“I think there are major repairs to the relationship between the county, the cities and regional governments in Androscoggin County that need to be made,” Barstow said. “That’s where this needs to start.”

The bill isn’t workable, according to the committee. The state would have to reimburse Auburn or any city for part of the lost property tax revenues.

“That’s something my committee didn’t feel comfortable doing,” Barstow said. He hopes local governments and county governments across the state will work more closely in the future.

“We need to come at this from a regional services perspective, and this would not have done that,” he said.

Foreclosure

Auburn Tax Collector Kathy Levesque is preparing the next step, foreclosing on AVCOG’s 125 Manley Road property.

She expects to send a final demand for payment of the 2003 lien in a certified letter to AVCOG this month. The group has until Nov. 28 to pay the $18,012 in past-due taxes, plus interest and penalties of more than $2,000.

“If they don’t, our next action is to assume ownership,” Levesque said. “We just take over the property.”

The past-due amount does not include the $18,012 in real estate taxes due from 2004 or the $18,687 due for this tax year. The city has a second lien for the 2004 taxes that is set to mature in November 2006.

It also doesn’t include more than $14,000 in past-due personal-property taxes from 2003 and 2004, or the $8,342 in personal-property taxes due this year. Collecting that would require a lawsuit, Levesque said.

“We just don’t have the authority to file a lien for personal taxes, and it’s too high an amount for small claims court,” she said.

In all, AVCOG owes $77,785.05 in real estate and personal-property taxes for 2003-2005.

AVCOG officials could not be reached for comment Thursday.

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