Most folks in Mendocino County have heard of the Assessor’s Office, the Auditor’s Office, and the Tax Collector’s Office, but very few could tell you exactly what they do. As thousands of Mendocino County residents begin receiving notices about back property taxes, knowing who to turn to could become of great interest.
It all started in 2013, when County officials agreed to purchase a new software package to update the antiquated system used by the Assessor’s Office, the Auditor’s Office and the Tax Collector’s Office. As sometimes happens, they signed a contract but the work could not start until the vendor wrapped up with their current client. Years passed while our County waited patiently.
Then in 2017, the Redwood Valley Complex Fire turned whole neighborhoods into ash. One of the many results was that the County had to reassess the value of those properties. Understandably, this disaster put the Assessor’s Office behind.
As fate would have it, between 2018 and 2020 the Assessor’s office had a mass exodus of assessors—some due to retirement, some to illness, and one passed away. Without enough staff to assess properties, things fell further behind.
In 2019, the software vendor was finally ready to start Mendocino County’s implementation, and while the timing wasn’t ideal, County staff didn’t want to wait for the vendor to start another years-long implementation with someone else.
Then COVID hit and in-person work became impossible. Generally, vendors implementing a complex software system come onsite to help with the data migration (in this case, getting property records from the old system to the new system) and customize the software so it works according to the client’s unique specifications.
Anyone who has been through a complex software implementation can tell you that this is a multi-step process with a lot of moving parts and no matter how well you plan for every contingency, if you don’t have gray hair at the beginning of the process, you will by the end.
At some point, when it appeared all the data had been successfully accounted for and all the calculations pertaining to the unique needs of Mendocino County had been programmed and all the staff had been trained, the Assessor’s Office went live. Only then could they truly know whether they had everything right. According to technology-savvy people, this process almost never goes 100 percent right and Mendocino County was no exception. As of now, the Assessor’s Office is still working with the vendor to adjust calculations and include exemptions according to the Williamson Act and other pertinent regulations.
Now we come to the most important part of all this: how it affects you—and it may if you bought or sold property in the last five years. A few weeks ago, the Assessor’s Office sent 7,000 letters (with more on the way) to people involved in Mendocino County real estate transactions in the last five years.
When properties are sold, the sale price is often the same as the fair market value—but not always. Each time a house changes ownership, it is reassessed, and the assessed value is the basis for property taxes. If the tax basis goes up (which it often does since property values have been on the rise for decades), the new homeowner will often get an initial property tax bill reflecting the original tax basis plus a supplemental bill to adjust for the new tax basis. Then, in future years, the homeowner will simply get one bill (on the assessed value as of the date they took ownership).
Sometimes, as with the Redwood Valley Complex Fire, a property’s value is reassessed downward even when there is no change in ownership. The decrease in property tax liability is called a correction. If, on the other hand, someone builds a house on a vacant lot, that property is reassessed upward. The increase in assessed value is called an escape in assessor’s parlance.
Those 7,000 letters I mentioned were sent out to inform thousands of home buyers that the County was not able to keep up with supplemental property tax bills in the last five years. So, if you have been paying property taxes on the assessed value of your property before you bought it, you may have a nasty surprise coming in the form of five years of supplemental back taxes coming due.
Obviously, there is so much to dive into here. This is the first in a series of columns to outline what all this means for Mendocino County property owners. If you received a notice from the Assessor’s Office and you’re concerned, call them at (707) 234-6800. They have set up extra capacity to respond to concerned property owners and they can explain the details of your particular situation.
If you have questions about property management or real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.
Dick Selzer is a real estate broker who has been in the business for more than 45 years.