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Ansonia settled a lawsuit with Benchmark Municipal Tax Services Ltd. on April 23.
ANSONIA – Ansonia’s government agreed to pay $615,000 to a debt collection agency who accused the city of selling them defective debts.
In a settlement agreement dated April 23, Benchmark Municipal Tax Services agreed to drop a lawsuit it had filed against the city in March. The agreement does not assign fault to either party.
Ansonia Corporation Counsel John Marini told The Valley Indy via email that the settlement will not have a major financial impact on the city. He said the agreement is for much less money than Benchmark had originally demanded.
“The settlement is very straightforward and – importantly – presents no financial hardship to the city,” Marini wrote.
The agreement also gives the debt collection rights back to the city, Marini said.
Marini said the money will come out of the city’s fund balance. He said the balance currently sits at over $10 million and is in good shape. He said it will have no impact on the city’s budget.
Benchmark is a tax collection agency that does business with cities. It purchases tax liens – back taxes on property owed by city taxpayers – and collects those debts for itself. In exchange, the city typically gets a lump sum of cash from the agency.
The company purchased at least eight “batches” of tax liens from Ansonia between 2016 and 2021. Its March complaint accused the city of selling liens that don’t actually exist; liens that had already been paid off; and liens with incorrect numbers. Benchmark paid $1,383,666.72 for one of those batches, according to the complaint.
It also said the city promised to pay the company back for the bad debts using proceeds from the WPCA sale last year, then failed to do so.
Marini said he’s been authorized by the Board of Aldermen to launch an investigation into how the liens became defective in the first place.
Ansonia Democratic Town Committee Chair Dave Hannon said in a phone call that the lawsuit was evidence of poor financial practices in Mayor David Cassetti’s administration.
“It’s just another in a long line of financial problems that this administration has caused for its taxpayers,” Hannon said.
Cassetti said the city’s finances are solid, and that there will be an investigation into what caused the bad liens.
“You can check, we have over ten million in our fund balance. Everything is good. We’re rock-solid, as far as I’m concerned,” Cassetti said.
Juda J. Epstein, the attorney who represented Benchmark in the lawsuit, did not return an email requesting comment.
