FAIRFIELD — It’s the $9.6 billion question for Solano County.
That’s how much assessed value over multiple years is being challenged by 835 county property owners, with $5 billion challenged by Genentech alone. County Assessor-Recorder Marc Tonnesen’s department has put one value on the properties and these owners are claiming a lesser value.
At stake is property tax dollars that are a based on the property assessments, some $96 million if the county lost the full amount of every appeal. But when Tonnesen wrote in a recent county memo about assessed value being “at risk,” he included the quotation marks.
Companies filing appeals can put down an amount that’s not based on an appraisal, Tonnesen said. It’s when they go before the local Assessment Appeals Board that they have to bring their case with them, he said.
A look at several appeals of $800 million and greater filed with the county bears this out. The appellants wrote their version of the assessed value on the form – sometimes half and even a quarter of the county’s value – but offered no supporting evidence.
For that reason, Tonnesen views the amount that will actually end up being reasonably “at risk” as less than $9.6 billion.
Still, the $9.6 billion figure attracted the attention of the county Board of Supervisors at a Feb. 19 midyear budget session.
“Every time I read it, my blood pressure elevates,” Board Chairwoman Linda Seifert said.
Genentech has by far appealed the most assessed value. In 2012, the county put a $1 billion value on Genentech’s plant at 1000 New Horizons Way in Vacaville. Genentech put the value at $332 million.
Dating back to 2002, the county’s cumulative assessed value for Genentech’s Vacaville and Dixon properties is $8.8 billion, while Genentech puts the value at $3.8 billion. That’s a difference of $5 billion, more than half the $9.6 billion in at-risk assessments.
The Genentech total could have been even higher. Solano County in 2009 reached a settlement with Genentech for the years 1997 through 2001. The county had assessed Genentech’s property at a cumulative $1.4 billion for those years, Genentech appealed for a value of $635 million and the parties settled at $1.1 billion.
“We did establish a methodology for those four years,” Tonnesen said.
But, Assistant Assessor-Recorder Kathy Dossa said, Genentech didn’t think the methodology and resulting value was good for subsequent years.
Genentech officials did not respond to a request for comment.
The county Assessor-Recorder’s Office has requested data from Genentech that it wants prior to going to an Assessment Appeals Board hearing, Dossa said. Genentech hasn’t provided much compliance, she said.
Tonnessen said the county’s lawyers and Genentech’s lawyers disagree over what information must be provided.
Solano County in October 2012 hired an appraisal firm that defended a Genentech assessment appeal in San Mateo County. Dossa said she’s hoping to get some feedback in the next two or three months. No date has been set for an Assessment Appeals Board hearing to settle the matter.
Meanwhile, Genentech continues to pay taxes based on what the county says is the assessed value. Should the company succeed in its appeals and have a lower assessed value declared, the county and other local agencies would have to refund the corresponding difference in property taxes.
Auditor-Controller Simona Padilla-Scholtens has impounded $20.7 million in property taxes, or the payments for $2.07 billion in assessed value. That’s just in case the county loses some amount of the contested Genentech assessments stretching back to 2002.
Most of the money is associated with Vacaville’s Genentech plant, which was in a Vacaville Redevelopment Agency district, Padilla-Scholtens said. The state dissolved redevelopment agencies in February 2012. Should the county win the appeal, the $20.7 million in impounded money would go to the Successor Agency for the Vacaville Redevelopment Agency, which would distribute it among the county, cities, schools and special districts.
Padilla-Scholtens said she asked the Board of Supervisors in 2006 for authority to impound the money and has done so only in the Genentech case. She impounded the money after consulting with Vacaville. She is not impounding the money because she thinks Genentech’s appeal has merit, but to be conservative and create some protection, she said.
Genentech has also appealed its property tax assessments in San Mateo County. San Mateo County in 2010 reached a settlement for appeals from 1990 to 1999, with the county agreeing to credit Genentech $26 million in future property tax payments, according to a San Mateo County press release.
Solano County Counsel Dennis Bunting told county supervisors at the Feb. 19 meeting that he heard from San Mateo County officials when Genentech came to Vacaville in the mid-1990s. He said they told him Genentech is a blessing and a curse: It brings in more taxes but challenges every property assessment.
Seifert proposed making changes in the way that property tax assessment appeals work. The county should try to get the state Legislature to add consequences for a losing party in an appeal. Right now, there’s absolutely no disadvantage for corporations to challenge assessments, she said.
Supervisor Skip Thomson talked of possibly forcing a resolution to the Genentech appeals. To do so, the county could stop waiving the two-year limit for the assessment appeals to be resolved and bring the matter to the Assessment Appeals Board.
Reach Barry Eberling at 427-6929 or firstname.lastname@example.org. Follow him on Twitter at www.twitter.com/beberlingdr.
Solano’s biggest appeals
Top appeals in Solano County over property assessments:
Source: Solano County