Milford to Sell $4.75 Million in Delinquent Tax Liens After 14-1 Board of Aldermen Vote

The Milford Board of Aldermen voted 14 to 1 on Monday, June 1, to authorize the sale of approximately $4.75 million in delinquent tax and sewer use liens to a third party, the first such sale the city has conducted since 2020.

The resolution authorizes the mayor's office to issue a request for proposal under sections 12-195h and 7-258 of the Connecticut General Statutes. Any successful bid must equal or exceed the full amount the city is owed on each lien, including accrued interest as of the date of sale.

The lone vote against the resolution came from Republican Alderman Win Smith Jr. of District 4, who argued that the sale gives up a city asset that grows in value over time.

What the City Is Selling

According to City Attorney Jonathan Berchem, who answered questions from aldermen during the meeting, the sale is divided into two lists of properties:

• The bulk list: 136 properties with a total face value of $2,895,465.04. Bidders must purchase all 136 as a package.
• The a la carte list: 14 properties with a total face value of $1,857,480.22. These properties may be bid on individually.

The combined total of the two lists is approximately $4,752,945.

Berchem said the bulk list will receive bids at or above its full value because the minimum sales price is the full amount due. The a la carte properties, by contrast, may not all attract bidders. Proceeds from any successful sales go into the city's general fund.

The liens being sold include unpaid taxes going back at least to 2011, according to discussion at the meeting. Berchem noted that under Connecticut law, tax liens "fall off" after 15 years, and that he had recently handled a foreclosure on a property that had been in arrears for more than 20 years.

How the Process Works

Berchem explained that the list does not include every delinquent property in Milford. Properties on payment plans were excluded. Some properties were excluded historically because they would not have made the request for proposal "attractive" to bidders.

The city has conducted similar sales five times in roughly the past decade: in 2012, 2014, 2016, 2019, and 2020. No tax lien sale was held during the two years of the Giannattasio administration in 2024 or 2025.

Connecticut tax liens carry an annual interest rate of 18 percent. The city's overall property tax collection rate, Smith Jr. estimated during the meeting, is approximately 98.5 to 99 percent.

The Dissent

Smith Jr., a Republican, framed his opposition in fiscal rather than partisan terms.

"These tax liens accrue interest at 18 percent," he told the board. "Most of these taxes will be collected at some point. The city of Milford is giving up for 2.8 million or 2.5 million today, a number which is going to turn into a much larger number over time — 3 million, 3.5, however long it takes for these people to pay off their taxes at 18 percent."

He continued: "These are city assets. They are very attractive to investors. I realize that, because they do carry an 18 percent interest rate. It's very hard to get that kind of return. This is something that is of great value. I think it's a bad policy."

Smith Jr. also referenced a historical practice in Milford that he said favored holding tax liens rather than selling them.

"There was a time not so long ago — I mentioned the Richetelli and Lisman administrations — when there was a blanket policy of not selling tax liens," Smith Jr. said.

Former Mayor James Richetelli Jr., a Republican, served 10 years as Milford's mayor from 2001 to 2011. Former Mayor Frederick L. Lisman, also a Republican, was a six-term mayor who served before Richetelli and died in 2005.

The Majority View

Democratic Alderman Robert Pacelli Jr. of District 2 argued in favor of the sale, focusing on the immediate financial benefit and the elimination of legal costs the city would otherwise incur in pursuing collection.

"I tend to find any opportunity that the city has to bring dollars into the coffers now at at least full value of what is due for amounts that were due and not paid at some point in the past to be a positive for the city," Pacelli said. "It would eliminate the need for the city to spend resources, even if it would be monetized later with attorneys, whether city attorney or whether outside sources, to free up those resources to handle other important business."

Pacelli noted that the structure of the resolution protects the city by requiring that bids equal or exceed the full amount due, ensuring the city does not sell any lien for less than what is owed.

Mayor Rich Smith, when asked by Smith Jr. why the sale was being conducted now, said the city has "gotten to critical mass" on delinquent properties.

Questions About Process Going Forward

Several aldermen used the discussion to raise broader questions about how Milford handles delinquent properties.

Smith Jr. asked whether the city has any system — perhaps software — to monitor when a property's accumulated tax debt approaches or exceeds the property's market value, so the city can act before liens become uncollectible. He referenced an earlier case in which a single tax lien before the board appeared to exceed the property's value.

Berchem said the tax collector's office and the city attorney's office are in regular communication about identifying properties for foreclosure, but acknowledged there is no formal automated process. "This is just bandwidth and capacity," he said.

Republican Alderman Michael Casey of District 3 asked why the city does not routinely initiate foreclosure proceedings as soon as a property goes a year unpaid.

Berchem responded that doing so would require significantly more legal staff. "I know the budget season's over, but there's 150 properties on this," he said. "We want to revisit maybe staffing my office with five to six attorneys. We can do that."

What Happens Next

The resolution authorizes the mayor, in consultation with the city attorney, finance director, and tax collector, to take all steps necessary to complete the sale, including signing documents to effectuate the transfer of liens.

The RFP will solicit bids from third-party buyers. Under Connecticut General Statute 12-195h, the assignee of a municipal tax lien steps into the shoes of the municipality and may pursue collection, including foreclosure, under the same terms the municipality would have used.

By statute, the city must negotiate market-compatible attorney's fees with whoever the successful bidder is, Berchem said, to prevent collection costs from becoming punitive. He referenced a prior case in another municipality in which sewer usage liens worth hundreds of dollars had been pursued with attorney's fees in the five figures.

Future tax obligations on the same properties remain the city's responsibility. If a property remains unpaid in subsequent years, the city retains the new lien and may offer it to the original buyer at full value or maintain it directly.

The roll call on the resolution was:

Yes (14): Ali, Bannon, Bevan, Brennan, Casey, Federico, Fowler, Healy, Hite, Lombardi, Pacelli, Michael Smith, Win Smith III, Vetro.

No (1): Win Smith Jr.