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2001 Final Report:
San Mateo County Assessor's Office Review
Summary | Background | Findings | Recommendations | Responses| Footnote
The 2001-2002 Grand Jury studied selected performance and customer service aspects of the County Assessor's Office. The Grand Jury gave particular attention to the time lag associated with property re-appraisal and the resulting issuance of notices of property tax adjustments, which resulted in six recommendations. Issue: Are there opportunities to improve the operations and customer service of the San Mateo County Assessor's Office? |
The
Appraisal Services Division of the Office of Assessor-County Clerk-Recorder
is responsible for appraisals and property tax adjustments. When notified
of an action that may alter the assessed valuation of a property (re-assessment
event), such as a change of ownership or the issuance of a building permit
for new construction or modifications, this office may re-appraise that
real property and issue any notice of property tax adjustment. Approximately
35,000 to 40,000 such documents are received and reviewed annually. Workload
increases in times of recession because there are a large number of requests
for re-assessments. The 2001-2002 Grand Jury was asked to examine the length of time between a re-assessment event and the issuance of a property tax adjustment. The Grand Jury reviewed this issue as well as some service aspects, the qualification of the appraisers, and public access to the Assessor's Office database.
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Re-assessments
due to change in ownership resulted in $6.3 billion in incremental appraised
value for the county in FY 2000-2001*. Time
lags associated with reassessment can result in significant delays in
the receipt of incremental tax revenues for the county, cities, and other
taxing entities in the county. The Grand
Jury's findings are divided into three sections: Appraisal Time Lag, Public
Access to the Assessor's Office Database, and Appraiser Certification APPRAISAL TIME
LAG In May 2001 the Appraisal
Services Division reported that, for FY 1999-2000, the median number of
days from their receipt of formal notification of a residential sale to
their production of a Notice of Supplemental Assessment (i.e., the Notice-to-Notice
"time lag" as used in this report) was estimated to be 210 days.
The fact that this was a median figure is significant, because it means
that half of the time lags were in fact longer than 210 days. The performance
was even worse in FY 2000-01, when the median time lag was estimated to
be 250 days. The Appraisal Services
Division made a special effort for the current Grand Jury investigation
to examine its backfile database more thoroughly, in order to to obtain
actual data to replace estimates. This expanded analysis also included
the determination of time lag data for the sale of commercial property.
"Commercial" property in this report is defined to include commercial,
industrial, and multi-family property. Single-family and commercial categories
account for about 98% of all the Assessor's office appraisal work; the
remainder includes such property as mobile homes and agricultural land.
The actual historical data obtained by this special analysis-actual median
time lag from recording date to notice mailing date for notices issued
during FY 1999-2001-is summarized in Table
1. Two reasons given
by the Appraisal Services Division for the delays shown in Table
1 were: (1) a large backlog, and (2) implementing a major proprietary
software system (EZ system). The EZ system became
fully operational for all real property in January 2000. It was expected
that this system would greatly facilitate information processing and that
the resulting time lag performance would be greatly improved. The Appraisal
Services Division was confident that its time lag performance for residential
sales would be reduced to 60 days in FY 2001-02 and 30 days in FY 2002-03.
As shown in Table 2, through April 22, 2002, the median time lag had been
reduced to 84 days. It is clear that the office will not meet its published
objective of 60 days for single-family residential housing units in the
current fiscal year. While no reporting or projections were made for the time lag performance for commercial property, those time lags were very long in prior years and continue in the current year to be much longer than that of single-family residential sales. The actual time lag performance measured for several periods during the current fiscal year is shown in Table 2. For several years
the Assessor's Office has had serious performance problems with regard
to the time lag associated with the processing of single-family unit property
appraisals. This performance improved significantly over the last 15 months,
but will still fall short of the Assessor's published objective of a 60-day
median time lag for Fiscal Year 2001-02. The Assessor's Office
has had even worse time lag performance with regard to other types of
property (commercial, industrial, multi-family units).Unfortunately, this
performance has gotten progressively worse over the last 15 months, to
the point where, for the most recent quarter available for this report
(3rd Quarter of FY 2001-02), the time lag for this type of property was
almost three times longer than the time lag for single family units. Because
there were no published objectives for the time lag associated with this
type of property, the Grand Jury cannot report the extent to which the
Assessor's office failed to meet its objectives. It might be argued that the time lag and backlog is due in large part to the volume of transactions handled by the Assessor's Office. However, the total transaction volume has not changed significantly over recent years, as shown by the data in Table 3. The total annual number
of property transfers noted here is higher than those given in the time
lag tables because not all property transfers require an appraisal or
re-appraisal of the property. A special "accounts aging" type of analysis was done to determine the distribution of ages of transactions in the backlog at different times during the year. The objective was to see if, on average, the records in the backlog were getting older. To support this analysis, the Appraisal Services Division developed and ran a series of special programs to determine the distribution of ages of records in the backlog at different times. The results of that special data collection effort are shown in Table 4. The data in Table
4 show that reduction in time lag has not been achieved at the expense
of increasing the median age of records in the backfile. The age of records
in the backfile has decreased significantly over the last 15 months. This
is an accomplishment that reflects well on the Appraisal Services Division. PUBLIC ACCESS TO
ASSESSOR'S OFFICE DATABASE It became increasingly
clear to the Grand Jury that the data in the Assessor's database, such
as the names of property owners and the building and sales history and
description of the property, including tax exemptions, was an important
public resource.. Although this database
has been made available to commercial organizations that re-package it
in CD and other forms for sale to real estate firms and to other interested
parties, it is not widely known that it is also available at a dozen online
terminals in the public information room of the Office of the Assessor-County
Clerk-Recorder at County Center in Redwood City. The public interest would
be served by publicizing that this information isreadily available to
the public. APPRAISER CERTIFICATION During the course
of the Grand Jury's study, some questions were raised regarding the qualifications
and training of the appraisers. The Grand Jury felt that it was important
that the taxpayers have confidence in the professional knowledge and experience
of the people who are appraising their property and determining their
tax bills. It is helpful here to know that there are some standards for
certifying the professional qualifications of appraisers. The State of California
has a variety of licensing requirements for California appraisers, depending
on the subject matter. Before 1990, the industry was basically self-regulated,
with the exception of property tax appraisers (i.e., all the appraisers
in the Assessor's Office), who since 1966 have been required to be certified
by the California State Board of Equalization (BOE). All of the current
appraisers in the Assessor's Office have this certification. Additionally, as a
result of the federal savings and loan scandals of the late 1980s, the
Office of Real Estate Appraisers (OREA) was established in 1990 within
the California Business, Transportation and Housing Agency and charged
with developing and implementing a real estate licensing and certification
program that complied with the federal mandate to license all real estate
appraisers performing appraisals that were required for any federally-related
transaction (which amounts to 99% of all financing transactions). Today, the vast majority
of California's real estate appraisers (more than 18,000) are licensed
by the OREA; the possession of an OREA license is the industry standard
for professional real estate appraisers. State-licensed appraisers must
provide an appraisal product that conforms to the Uniform Standards of
Professional Appraisal Practice (USPAP). The OREA provides
four levels of licensing. Each requires passing a state exam and periodic
licensing renewal: Trainee license, Residential license, Certified Residential
license, and Certified General license. Each license level permits a specific
scope of work and has different training and experience requirements. The OREA license is
considered to be a more demanding and more comprehensive test than the
BOE certification test. Possession of an OREA license, in addition to
the required Board of Equalization certification, would confirm the professional
competence of appraisers in the Assessor's Office and would enhance the
professional image and public confidence in their work product. This is
particularly important in the context of the increasing complexity of
evaluating certain commercial and industrial property and recent legal
challenges to the Assessor's appraisals. The OREA license levels could
also be used as an independent factor for evaluation of skills and compensation
associated with each appraiser grade level. Few San Mateo County appraisers
have an OREA license.
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Response |
Recommendation 1
Recommendation
2
Recommendation 4
Recommendation
5
Recommendation 6
Warren Slocum
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