County tax assessor’s actions under scrutiny

March 22, 2010

(Editor’s Note: This is the first in a series about San Luis Obispo County Assessor and Republican politico Tom Bordonaro.)

By KAREN VELIE

San Luis Obispo County Assessor Tom Bordonaro is arguably the most politically connected officeholder on the Central Coast — and its most controversial.

Bordonaro, 50, of Paso Robles, is a former two-term state assemblyman, failed Congressional candidate, and the current chairman of the Republican Party in San Luis Obispo County. He was appointed by governors of both parties—Republican Pete Wilson and Democrat Gray Davis—to terms on the state Board of Prison Terms and the Adult Parole Board.

However, critics are becoming increasingly concerned that Bordonaro, who was first elected county assessor in 2002 and is running unopposed on the June ballot for another four-year term, isn’t the right person for the job. Among other things, Bordonaro is being accused of using the county Assessor’s Office to enrich himself, his friends and some of his political allies, thereby reducing revenues desperately needed for education.

“I am sorry to hear of the possible problems in the office,” said former San Luis Obispo County Assessor Dick Frank. “I have been hearing about discontentment from the employees for some time.

“My problem is that anything that reflects of politics reflects bad on the office. I know when I left there the employees were honest and dedicated to their job and to the public.”

Bordonaro, his wife Martha, and his parents are the owners of the Bar TJ Ranch, an agricultural operation in Paso Robles that raises cattle and grows hay and wine grapes. Inconsistencies in the ranch’s 2009 property tax filing caused Assessor’s Office staff to question the totals reported by Bordonaro.

A subsequent audit concluded that Bordonaro had given incorrect accountings of agricultural business equipment assets, by about 60 percent, for at least the past four years, according to county documents.

In the 2006-07 tax year, for example, Bordonaro reported ranch equipment, including machinery and supplies, that totaled $20,400. But the subsequent audit valued the equipment at $69,300.

Property tax laws require a business owner who has given incorrect information to an assessor that decreases his tax liability to pay back the shortage with just under a 1 percent penalty. In addition, if it is determined that the business owner knew the value was underreported, an additional 25 percent penalty is attached to the bill.

However, employees who are under Bordonaro’s supervision determined he was unaware of the underreporting and was therefore not liable for the 25 percent penalty. This decision left many people incredulous.

In addition to being the county tax assessor, Bordonaro was the managing partner of AAA Plus Business Services, a business tax preparation service located in Paso Robles that helps business owners comply with asset reporting requirements.

“He is either arrogant enough to think he can get away with underreporting or he doesn’t understand property tax law requirements,” said one of his critics who asked to remain unnamed to protect his employment. “Either way, he shouldn’t be running for another term.”

Bordonaro contends that his parents made the underreporting error. He said he asked staff to audit the family business after he noticed the low reporting.

In addition to underreporting the value of his own properties, CalCoastNews has uncovered the alleged under assessing of other properties owned by assessor employees, Bordonaro’s business associates, or his friends.

In another example discovered by CalCoastNews, a girlfriend of Bordonaro’s banker bought a home last year in Templeton for $1.3 million. She had sold a bed-and-breakfast business in Paso Robles for a similar amount. She reportedly wanted to take advantage of Proposition 60, a measure approved by voters in 1986 that allows a property owner to transfer a property tax amount from a current residence to a new residence of equal or lower value.

Staff members in Bordonaro’s office originally rejected the new homeowner’s request because it did not qualify—according to a strict formula normally applied in such cases—for a Proposition 60 transfer.

Sources claim Bordonaro responded by asking subordinates to remove approximately $200,000 from the new home’s assessed value for four acres of hobby grapes, a practice not normally allowed.

This sweetheart deal, according to Bordonaro’s critics, equates to a total saving of more than $7,000 per year for his banker’s friend.

“The (Proposition 60) request was handled in the same manner that any other request would have been,” Bordonaro said, defending his handling of the case. “With regards to this particular request, assessor staff made a determination that an error had occurred and corrected it.”

Yet another example of suspected underreporting by a Bordonaro employee in the assessor’s office involves an Atascadero home owned by Charles Sechrist, an assessor employee who often attends out-of-area conferences with Bordonaro.

CalCoastNews examined the assessments done on a 2,250-square-foot home Sechrist built in Atascadero in 2003. In 2005, the three-bedroom, three-bathroom home was assessed at $261,280.

At the behest of CalCoastNews, three local brokers examined sales of homes of approximately the same square footage and age within the same area of Atascadero. The three determined that the value of the Sechrist home in 2005 should have been assessed at between $400,000 and $579,000.

Bordonaro contends the property’s value of $261,280 in 2005 was correct. And while new construction may be assessed for the cost of construction plus the price of the land, Sechrist’s property assessment was adjusted two years after it was constructed to show the lowered value of $261,280.

At this time, the state Board of Equalization (BOE), in fall 2007, was conducting a review of assessment practices at the assessor’s office.

An official report of the audit released in September 2009 by the state agency found no problems with the office’s assessments and also that Bordonaro “maintains the integrity of the assessment roll” through a policy of not allowing an employee to influence assessments in which they have an interest.

“Although there is no written policy, it has long been the practice in the San Luis Obispo Assessor’s Office that no employee may prepare or influence the assessment of property in which he or she holds an ownership interest,” according to the BOE report.

Bordonaro’s financial and personal relationships with BOE staff and officials – the agency responsible for regulatory oversight – has caused some to question how a two-month audit performed by 15 separate BOE employees failed to find underreporting by the assessor and some of the staff.

Criticism of Bordonaro’s performance as county assessor appears to cross party lines. Several Republicans are unhappy with their high-profile political leader for a variety of reasons.

According to some employees and officials in county offices, Bordonaro is rarely seen in the main office in San Luis Obispo and primarily shows up at a branch office in Atascadero to meet with area Republican leaders to discuss politics. In addition, numerous visits to the assessor offices by CalCoastNews appear to confirm these allegations.

“You are misinformed,” Bordonaro said and offered no other explanation regarding the charge that he is rarely in the office. “I have not met with members of the Lincoln Club to talk politics at the Atascadero office or any other office.”

The Lincoln Club is a countywide organization intended to recruit and support Republican candidates for office.

Bordonaro, using the tried-and-true Republican mantra of saving taxpayer money, says a reorganization of the Assessor’s Office has made for a more efficient workplace, thus allowing him to spend time away from his official duties.

“The portion of the budget under my control has decreased by 11.7 percent,” Bordonaro responded. The office budget has increased by approximately 9.5 percent over the past four years.

However, according to a state Board of Equalization survey of the office,  the reorganization has actually increased the cost of running the Assessor’s Office by more than 40 percent, from $5,768,270 to $8,207,665 over a five-year period, while staffing has remained relatively constant; the number of executive staff positions increased along with their salaries.

The criticism of Bordonaro’s tenure as San Luis Obispo County assessor comes at a time when the county is collecting less money in property taxes, which is the main source of revenue for local government and the schools.

Note: April, 11, 2010 – After Tom Bordonaro was elected to the state assembly, his partner in AAA Plus Business Services took sole ownership of the Paso Robles tax preparation service.

The cost of running the Assessor’s Office has increased by more than 40 percent, from $5,768,270 to $8,207,665 over a five-year period, while staffing has remained relatively constant.