COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Counsel

DATE:

June 13, 2011

BOARD MEETING DATE:

June 28, 2011

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

John C. Beiers, County Counsel

SUBJECT:

Correction of Property Tax Roll

RECOMMENDATION:

Approve corrections for: 1) Green Hills Country Club (APN 021-470-030) 2008 and 2009 annual secured property tax roll; 2) Pont Street LLC (APN 070-211-130-3) 2009 and 2010 supplemental roll; 3) SHP Los Altos LLC, (APN 061-430-450) 2010 annual secured property tax roll; 4) Bohannon Development Co. (APN 039-490-170) 2006 annual secured property tax roll; and, 5) Appelera Corp. Acct No. 043380-01-N 2005-06 unsecured property tax roll for personal property.

BACKGROUND:

Rev. & Tax Code § 4831.5 allows for the correction of the tax roll where there is a decline in value of the subject property. In the course of a year, it is not uncommon to uncover some failure to properly decline a property among the assessments made by the Assessor. Errors may be caused by defects or delays in information provided by assessees, unknown economic or historical information, duplication of assessments or clerical or mathematical errors by the assessee or the Assessor, or both. Corrections are also warranted when there is an error in the base year value, when new construction is erroneously or prematurely assessed, or when an audit reveals errors in an assessment to personal property. When the correction to the tax roll involves a correction in excess of $50,000, Board of Supervisors’ approval of that correction is required.

DISCUSSION:

1) Green Hills Country Club. The requested correction arises as a result of a new construction at the golf course and country club. At the 2008 lien date the owners had just begun construction on a new club house and the Assessor overvalued the partial new construction. It is the Assessor’s opinion that the 2008 values for the new improvements should be corrected from $8,669,002 to $3,838,623 and the 2009 values for improvements should be corrected from $13,381,395 to $11,695,395.

2) Pont Street LLC. The requested correction arises as a result of information received from the taxpayer. After enrolling the purchase price of $11,625,000 as reported by the taxpayer, the Assessor was informed that the purchase price for the land was $5,016,000 and that the remaining $6,609,000 was to complete construction of a single family home. The Assessor therefore requests a correction to the supplemental roll values for 2009 and 2010 to reflect the reduced value of the land from $11,625,000 to $5,016,000. Upon completion, the single family residence will be valued and added to the roll.

3) SHP Los Altos LLC. The requested correction arises from a decline in value. The property was purchased in 2006 for $18,506,250 and had been operated as a new car sales lot. It was purchased with the intent to redevelop it. Since the purchase, market values have decreased and a reduction is warranted. The 2009 roll value was reduced to $14,423,00 by stipulation approved by the Assessment Appeals Board. As of January 1, 2010 it is the Assessor’s opinion that the value of the subject property has declined to $13,317,000.

4) Bohannon Development Co. The requested correction of the 2006 annual roll arises as a result of an untimely escape assessment issued by the Assessor. After consultation with legal counsel for the taxpayer and the Assessor, the parties determined that the 2006 escape assessment was not timely issued. The Assessor therefore requests that the 2006 annual roll be corrected from $143,741,750 to $138,049,194 to undo the escape assessment.

5) Appelera Corp. The requested corrections to the unsecured roll arise as a result of an audit that revealed i) that the taxpayer reported equipment that was physically located in Alameda County and is being assessed by that jurisdiction; and ii) that there was an over-assessment due to a change in the asset-life used to calculate the value for fixtures. The Assessor therefore requests a reduction in the 2005-06 unsecured roll from $99,574,841 to $84,980,150.

Authorizing these corrections of the property tax roll will contribute to the Shared Vision 2025 outcome of collaborative community by demonstrating fiscal accountability.

FISCAL IMPACT:

There is no fiscal impact from the roll correction to SHP Los Altos LLC (taxpayer still owes $39,988.46 after the reduction). Refunds of $51,414.56 and $18,309.96 to Green Hills Country Club; of $72,130.16 to Pont Street LLC; of $62,394.45 to Bohannon Development Co.; and of $155,039.40 to Appelera Corporation will be due as a result of these roll corrections.