Over the years, the San Francisco assessor has been the poster child for questionable assessment practices. From 1881 to 1910, the State Board of Equalization issued the county equalization orders 11 times due to underassessments. In the 1960s, former long-time Assessor Russ Wolden was sent to jail. More recently, former assessor Doris Ward had her detractors.
The most recent BOE review of San Francisco assessment practices, released February 11, observes that "there have been dramatic changes in the San Francisco City and County Assessor's Office over the last four years." Since November 2002, there have been three elected or acting assessors. The current assessor, Philip Y. Ting, was appointed to the job by Mayor Gavin Newsom in July of 2005 and has since been elected.
According to the board's review of the office:
"We found that 2,053 of 12,884 reappraisable changes in ownership occurring between January 2, 2004 and January 1, 2005, had not been processed. In the area of new construction, we found that a total of 2,893 building permits with an indicated dollar value in excess of $500 million had not been processed. The dates of completion for these permits ranged from 1993 to 2004.
"The backlog in working new construction permits has been a persistent problem, going back to at least our 1996 survey. The failure by Mr. Ting's predecessors to properly administer these programs adds to the current workload of the assessor's office.
"Our review also showed a major problem in discovering new construction in tax exempt government-owned property. The public agencies responsible for managing these properties have not been cooperative in providing information concerning new construction. The assessor must employ alternate means of obtaining the information; he should enlist the aid of the county counsel to obtain the information.
"In the area of business personal property, we found that mandatory audits are not completed timely. Again, this problem dates back to our 1996 survey. The backlog in performing mandatory audits is exacerbated by recent staff attrition."
A sample of the 2005-06 assessment roll revealed that the average assessment ratio for San Francisco was 95.38 percent, above the state's minimum tolerance, but well below the ratio posted by almost all other assessors (between 99 percent and 100 percent). The San Francisco ratio would suggest that around $5 billion in value was left off the assessment roll in 2005-06.
Some of the other findings in the board's report:
· The assessor processed escape assessments pursuant to completed audits beyond the statute of limitations.
· Revenue and Taxation Code Section 408.1 requires the assessor to maintain a transfer list of changes of ownership for public use, and the assessor had not done so.
· Properties of some legal entities that had changed ownership had not been reassessed.
· Some taxable possessory interests were not being enrolled, and there is insufficient evidence in the files to determine how the values were determined for those that were enrolled.
· The assessor was using actual rents, rather than economic rents, in valuing possessory interests in boat berths in marinas.
· The assessor was not following statutory requirements for valuing possessory interests in redevelopment agency property.
· The assessor was overstating the value of some possessory interests by failing to use a declining term for contracted terms of possession.
Assessor Ting, who was not in office for the period sampled
by the board, said he agreed with most of the board's recommendations and is
working to implement them. He said, however, that "it will be extremely
difficult" to bring mandatory audits to a current status with the existing
staffing levels.
Cal-Taxletter February 15, 2008
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