South New Castle Borough began steps last week to address at least two blight concerns within its borders.

First, council voted to begin a process aimed at boarding up or potentially demolishing a dilapidated house on Prospect Street.

It also passed unanimously an ordinance to establish a fire insurance escrow fund that, according to the document, would ensure “the removal, repair or securing of buildings within South New Castle Borough damaged by fire, and the payment of delinquent taxes and other municipal claims …”

In doing so, the ordinance states, the council “desires to deter the commission of arson and related crimes, to discourage the abandonment of property and to prevent urban blight and deterioration …”

“Essentially,” borough solicitor Lou Perrotta said, “if there’s a fire in the borough and the damage is over a certain amount, the borough would require escrow to be set up to take care of any issue concerning either the rebuilding or demolition of the piece of property so it doesn’t sit there without any mitigation.”

The ordinance sets that amount at $7,500. For fires where damages exceed that amount, an insurer may not pay a homeowner’s claim unless it first receives a certificate from the borough treasurer stating that all provisions of the ordinance have been met.

Those conditions include:

•Upon notification of any municipal claims (such delinquent taxes, assessments or penalties) or municipal expenses (needed to remove, repair or secure the building) against the property, the insurer must provide the treasurer with a payment from the insurance proceeds that will cover the amount owed to the borough.

•Once any potential debts are covered, the insurer may pay the claim of the property owner. However, if the amount of the loss exceeds 60 percent of the total amount of insurance coverage, the insurer must first pay the treasurer $2,000 for each $15,000 of the claim. If the property owner has submitted a signed contractor’s estimate of the cost to remove, repair or secure the property to both the insurer and the treasurer, and if that cost is less than the amount calculated by the formula, the insurer will transfer to the treasurer that amount from the insurance proceeds.

•Once the treasurer receives these funds, they will be placed in a separate fund “to be used solely as security against the total municipal expenses anticipated by the Borough (for) removing, repairing or securing the building or structure as required by this Ordinance.” The treasurer will notify the property owner when these funds have been received.

•If the property owner provides the borough treasurer with a signed contractor’s estimate that sets the cost of removing, repairing or securing the building at less than what the treasurer has received from the insurer, then the treasurer will pay the property the owner the excess of that amount, unless the borough has already begun the work. In the case, the borough will complete the work.

•If the borough does incur expense to remove, repair or secure the house, the treasurer will transfer that amount from the escrow fund into the borough’s general fund.

•Once the borough receives a certificate from its code enforcement officer that the building has been repaired, removed or security in accordance with all ordinance requirements, the treasurer will release the balance of the escrow fund to the property owner.

The ordinance became effective Tuesday, five days after its adoption. It provides for a fine of not more than $1,000 plus costs or a jail term of not more than 30 days for failure to comply.

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