Kevin Warnock

City and County of San Francisco Assessment Hearing Officer Report and Recommendation for Kevin Warnock, March 8 2012

On Thursday, March 8, 2012, despite my having a bad cold and feeling awful, I had a financially remunerative day.

I attended my assessment appeals hearing for my house. I had applied for a reduction in the assessed value in 2010, but because so many San Francisco property owners are also appealing their assessments, it took until 2012 to get a meeting with a hearing officer.

My property tax in 2010 was just over USD $10,000 if I recall correctly. The current assessment on role above shows a value of just before the hearing of USD $790,000. That value itself is reduced from the original 2010 assessment value. It was reduced at my request via an informal yet written request I made in 2010.

Thanks to declining home prices due to the Great Recession, my 2010 taxes declined to $7,616.70!

My new assessed value as a result of my formal hearing on Thursday is USD $650,000. So I got two meaningful reductions — once in response to an informal request where I didn’t have to appear in person, and the other where I did have to appear in person and present evidence. I presented a full appraisal I paid Christian Koenig of Koenig Appraisal USD $350 for. That was money well spent. Donna Crowder was the hearing officer and Garry Michael Nettles, Jr. was on hand representing the San Francisco Assessor’s office.

I was impressed with how well Nettles had researched the comparable sales my appraiser relied on. In one case the appraisal cited a fixer upper that sold for USD $595,000 but was professionally flipped for $935,000 soon after. I am friendly with the developer that did the flipping, and I saw the result, which was astonishing. My house is not in ready to be flipped condition, so the original comp was more fair than the flipped sales price. I had asked for my appraised value to be reduced to USD $600,000, but got only USD $650,000. Frankly, I think the higher number is right on target, as the comps were for houses not as nice as my house is.

Crowder and Nettles discussed their views in front of me, and they ran calculations on their large plug-in calculators. The hearing took about 15 minutes. I was impressed with how thoughtful and smart both Crowder and Nettles are, and I think they arrived at a number that is neither too high or too low.

I am pleased and relieved.

This happy result is something of a surprise, given how critical I was of the Assessor-Recorder’s office the last time I wrote about it on this blog. In brief, the office is so overwhelmed that they routinely hold customer checks for services for months before cashing them. When I was there paying in 2011 I used cash since the office had held my 2010 check for months before they cashed it. I complained and was told they routinely hold checks. I believed them because I saw checks sitting in the open around their office, including on the counter where I was standing. I could have copied the check numbers and drained the accounts if I were a bad guy. I was appalled and I wrote a critical piece about my findings. I don’t think my piece hurt me at the hearing, which is a relief. I looked in the Assessor-Recorder’s office on Thursday, and I didn’t see any personal checks laying around for the public to view, so maybe my earlier blog post was discovered by those in authority and changes were made. I relayed this story of holding checks to a teller at San Francisco Fire Credit Union, where I hold my checking accounts, and learned that they were familiar with San Francisco holding checks so long that they become impossible to cash due to how old they are. If a random teller knows about this issue, it must be pervasive. I hope my blog post about this was headed. This is an issue of real importance because holding checks causes people to overdraw their accounts, which results in big overdraft fees, which is a drain on society.

My tax rate is 1.1718%.

The Zillow home value website shows my house value as of March 8, 2012 to be USD $756,000. When I got married in 2008, the Zillow value was about USD $1,050,000. When I got divorced in December 2011, the Zillow value was far lower. Even the far lower Zillow value today is far higher than my new assessed value.

Since I plan to stay in this house indefinitely, I am thrilled the value is so low.

I paid USD $740,500 in 2001 or 2002 when I bought the house, which was far higher than the asking price of USD $619,000.

I had to outbid 19 other buyers to win this house, but it’s a great house with a spectacular view and copious free street parking for guests and housemates.

I was told to expect my refund check from San Francisco within six to eight months, but I won’t hold my breath, since one of the homeowners in front of me at Thursday’s public hearing said he had won an assessment reduction for 2009 but still hasn’t received his check, roughly a year after his hearing for that year.

Phil Ting, Assessor-Recorder for the City of San Francisco, California USA

For years now I have been trying to get the assessed value of my house lowered. Right now the appraised value is USD $140,000 lower than San Francisco’s assessed value. That means I am paying too much in property taxes, which is unfair.

The Assessor-Recorder of the City of San Francisco is hopelessly behind on processing requests for lowered assessments. The formal appeal I filed about a year ago still has not been processed. The appeal I filed this year is not due to be processed until 2013.

Last year I filed my appeal in person and paid by personal check. The check was not cashed for months after I presented it. This year when I paid, I chose to pay in cash, and I spoke with the woman in charge in the office about the delay in cashing my check last year. Amazingly, she was quite forthcoming with information.

She said that they routinely hold checks for so long that sometimes the checks are refused by the banks they are drawn upon for being too old, or stale. This results in a different department in City Hall charging a USD $50.00 fee, presumably for a bounced check. The supervisor I spoke with today said that her department had to pay lots of these $50 fees out of its own budget. What a mess this is. It’s such a mess I am putting my own appeal in jeopardy to bring this shocking news to my readers.

The office was littered with stacks of paperwork, including personal checks sitting on the counter where the public stands while conducting business. This is simply unacceptable. A person with bad intent could copy down the checking account information and steal money from unsuspecting check writers via an electronic debit transaction. This casualness with checks makes me suspect the checks are not locked up properly for the months that they sit before being cashed. How many people might have access to this sensitive information during this time? Checks are like cash, only more so. Once you have the account number an account can be drained to zero quite easily, I understand. The famed computer scientist Donald Knuth has written that he stopped using paper checks years ago due to their inherent insecurity.

Somebody needs to crack the whip in that office and get them to cash personal checks the day they receive them, or the day after at the latest. By waiting months to cash them, the City is putting people in danger of bouncing checks with their bank. Most people would never suspect the City would hold a check for months before trying to cash it. Yes, people should balance their checkbook and be careful. But I bet banks have made tens of thousands of dollars in bounced check fees over the years because of this incompetence in the office of the San Francisco Assessor.

I ask that my own application not be penalized for writing this post. I am writing this because I sensed that the supervisor I spoke with had the best of intentions but is so burdened by the flood of work that her department can’t keep up. I saw her personally answer the phone and it’s clear she cares about doing a good job as she was helpful and sweet to the people she was speaking with.

I hope that this post comes to the attention of those at City Hall that can help this supervisor process applications more fairly. Maybe they need more staff. Maybe they need better software. Maybe they need to adopt a cash only policy for the time being. There is an ATM in the lobby of City Hall so it would be easy for people to get cash on the spot to pay the USD $60 filing fee.

Finally, I should say that it is unfair to take over a year to process applications. I was faced with deciding to pay a second $60 fee not knowing the results of paying my first $60 fee. Maybe it was not worth it to pay the second fee.

I hope to get my assessment lowered by a six figure sum, as I have paid for formal appraisals in 2008, 2010 and 2011 to support my case. Wish me luck.