Tax auction key issue in treasurer election: Reform is the only thing candidates agree on

News-DemocratJanuary 14, 2011 

— There's one thing Frank Miles, a Democrat, and Kurt Prenzler, a Republican, can agree on: Madison County's annual tax auction needed reforming.

Both Miles and Prenzler, candidates for county treasurer in the Nov. 2 general election, are positioning themselves as champions of change, responsible for reforming the tax auction.

The Illinois attorney general's office, in response to News-Democrat stories, is investigating the county's tax auctions from 2005-2009 under former Treasurer Fred Bathon. He retired in December and has declined requests for comment.

The investigation focuses on the penalty rate that investors were allowed to charge delinquent taxpayers. The penalty rates are determined at the tax sale, which is conducted annually by the county treasurer and, in most counties, is like a reverse auction. The newspaper's investigation showed that in Madison County, the penalty rate was predominantly 18 percent, the highest allowed under state law, during Bathon's tenure. Bathon accepted political donations exceeding $140,000 from the investors.

Prenzler points out that he raised questions about the tax sale when he ran unsuccessfully for treasurer against Bathon four years ago. Miles said he immediately overhauled the sale process after taking office, and when he conducted the tax sale in March, the average penalty rate fell by half, to 9 percent.

"We did make it an issue in 2006," Prenzler said. "Quite honestly, there were so many issues involving Fred Bathon's office, I just don't think it really got traction. This year, thanks to the (newspaper), people are listening."

Miles, who was appointed treasurer by the Democratic-controlled County Board in December, said: "One of the first changes I made after becoming treasurer of Madison County following the resignation of Fred Bathon was to make significant changes in how the annual tax sale is conducted. Those changes were designed to ensure the March 2010 tax sale was conducted in a fair, transparent manner, completely open to public scrutiny. The tax sale was conducted in a true reverse auction format."

Witnesses to Madison County's tax sales during the years being investigated say multiple bidders would simultaneously shout 18 percent, then Bathon's office would decide which person shouted first.

The purpose of the tax sale is to provide revenue on time to schools and other governments agencies that receive property taxes. The investors pay the tax due on individual pieces of property, then collect that amount plus the penalty from the property owner. If the owner doesn't eventually pay the tax buyer, the tax buyer can take the property.

At least one County Board member has brought up the possibility of giving refunds to property owners who paid inflated penalties.

Miles, on the possibility of refunds, said: "I wouldn't comment, because there's an investigation under way by the authorities. I wouldn't want to get into that."

Prenzler said: "I think that's something that I would certainly look into. I'd have to get legal advice on that point, but I think that certainly should be a point of investigation."

Both Miles and Prenzler said the taxpayers' interest has to be protected in the tax auction.

Prenzler said: "The job of the county treasurer, in running tax auctions, is to get low interest rates, to have a successful, reverse auction. The purpose is to protect, not exploit, the late taxpayers."

Miles said: "The previous style resulted in high interest rates. The process I used saved taxpayers 50 percent from the prior process. My intent, my plan, is to get the interest rate as low as possible."

Prenzler, 54, of Edwardsville, is an accountant and business owner. He and his wife have three children. Prenzler has vowed to cut the budget of the treasurer's office by 30 percent in 30 days.

Miles, 50, of Edwardsville, previously served as director of the county's Planning and Development Department. He also has worked for the cities of O'Fallon and Edwardsville, and for U.S. Rep. Jerry Costello, D-Belleville. He and his wife have four children.

Miles said if he's elected, he'll "effectively and diligently manage the public's money." He added: "I will operate a treasurer's office that is open to public scrutiny and I will be accountable."

Story published 10/17/10. Contact reporter Brian Brueggemann at or 692-9481.

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