Wednesday May 12 2010
Serrano developer rues Mello-Roos tax bill
By: Raheem Hosseini, Telegraph Correspondent
A dispute over taxation has pitted a Sacramento-based builder against El Dorado County. Parker Development Company, whose limited liability corporation oversees the upscale Serrano golf course housing development in El Dorado Hills, is alleging it’s been overcharged hundreds of thousands in Mello-Roos taxes since 2000. A Mello-Roos tax is a special property tax imposed upon property owners within a community services district. Enacted in 1982 as the Community Facilities District Act, it was intended to offset the loss of property taxes to local governments that resulted when California voters passed Proposition 13 four years prior. Money from the special assessment tax, which collects principal and interest payments on public bonds, is used to maintain infrastructure, often in newer communities, according to online glossaries of mortgage terms. In this case, attorneys for Serrano Associates LLC allege the county overestimated its yearly assessments, “resulting in increased special taxes upon the undeveloped portions of the Serrano project.” The actual amount the company is seeking is unclear. Kirk Bone, the government affairs director for Parker Development, said his company and the county had agreed in January to embark on the research phase together to answer that riddle, but then the county reconsidered. On Feb. 23, county supervisors granted the company’s request by directing its Chief Administrative Office to hire an outside auditor both parties could agree on to conduct a full analysis of the taxes paid. After the audit was completed, a bond counsel would then be brought in for an opinion. “It is my opinion that this item puts our board in an adjudicatory position on a very technical matter!” Supervisor Jack Sweeney wrote in a Feb. 18 memo requesting the independent audit and bound counsel opinion. But on April 23, following a motion made by Sweeney, supervisors rescinded that earlier decision and instead set a June 22 hearing, at which company representatives will return with the amount they’re seeking and any proof they have of being overtaxed. Bone wouldn’t comment on either aspect, saying both matters were still being researched. “We don’t know yet,” he said after being asked the amount the company was seeking. County Auditor-Controller Joe Harn, whose office assesses taxes, put the figure at somewhere between $900,000 and $1.5 million. The county has denied any wrongdoing, saying there was no error in either the rate or method of apportionment. Harn said his office worked with the claimant for nearly two years trying to find such an error, even though the onus is on the taxpayer to show a miscalculation has been made. “It’s hard to look for a mistake without a clue as to where that mistake is. We need to be pointed in the right direction,” he said. “If someone points out a (legitimate) mistake, we’ll put out a refund as soon as possible.” In a Dec. 31 Public Records Act request to the County Counsel’s Office, Serrano Associates attorney Michael J. Cook accused the county of dragging its heels in providing requested information. “Consistent with an adversarial posture, your responses have been slow, minimalist, and raise more questions than answers,” he wrote.