Some Mountain House homeowners can expect a property tax refund after the community’s governing body confirmed that a tax consultant used the wrong information to calculate tax bills last year.
Mountain House Community Services District management analyst Danielle Clayton told the CSD at its July 10 meeting that Siegfried Engineering had been calculating special tax assessments for the district and then relaying that information to the San Joaquin County auditor-controller’s officer.
Then, after the 2018-19 county property tax bills went out, some homeowners noticed an unusual jump in their taxes, which prompted the CSD staff to pursue an audit. Richardson & Co. LLP came in and took a closer look at tax calculations and found that many people had been overcharged. Others had been undercharged.
The difference, the new consultant found, was in the details of what a homeowner is billed for when property taxes are calculated. In the erroneous bills, homeowners paid for the total square footage of buildings on the property, whereas they should have been billed for “livable” square footage.
Richardson & Co. looked at 667 parcels and found that 241 had been overcharged by a total of more than $97,000, or about $400 on average. Some were overcharged by $600 or more and one by nearly $960.
Richardson & Co. also found that 84 of the 667 parcels examined were undercharged by a total of more than $25,000, an average of nearly $300. In those cases, the difference was in secondary units that were on the property but not part of the main house.
Board members said the CSD should give refunds to homeowners — or, in the case of underbilling, amend upcoming tax bills.
“Are we going to do the corrected tax bills? I’d like for legal to look at the ordinance so we could do a mid-year, partial-year billing,” board member Manuel Moreno said. “It sounds like we’re missing out on a lot of money by not doing that. I think we would be wise to at least figure out what that looks like.”
Board member Brian Lucid added that he’d like to see the previous consultant bear some of the costs of its mistake.
“What accountability does Siegfried have for our overpayments? Now we have incurred an interest payment which we want to pay back to the residents, and also we’ve incurred the cost of this audit because of that,” Lucid said.
District counsel John Bakker said the board could direct him to look into whether the district could seek damages.
“We will report back in a privileged and confidential fashion and perhaps in public as well, depending on what the results of that investigation would be,” Bakker said. “The contract is probably not perfect in terms of trying to get a recovery. Clearly a mistake was made by the consultant and one would hope there’s some liability there.”
Administrative service director Sarah Ragsdale said that, going forward, the CSD will aim to have a consistent method for calculating property taxes and make the information readily available to the community.
“We are going to have a database online where residents can look at what we’re showing as the basis for our calculation, and then they can — if they find they don’t agree with it, they’ll have to explain which one they think is wrong,” she said.