Assessor admits Nagel tax mistake
Oct. 23, 2012 — Kenneth Bunch, Lassen County’s tax assessor, acknowledged his office failed to follow up on the status of an Eagle Lake property owned by Fred and Theresa Nagel.
“It’s really embarrassing,” Bunch said in a Wednesday afternoon telephone interview. “There was a problem on my records with the Nagel house at the lake … I’ve got 11,000 houses we’re appraising, and I guess this is going to happen sooner or later.”
Westwood resident Eileen Spencer, representing the watchdog group kanwehelp, brought the matter up at the Lassen County Board of Supervisors’ meeting Tuesday, Oct. 16. The group also filed a complaint that day with Bunch’s office alleging the Nagels took out a building permit for a home at Eagle Lake, but never completed the process.
“Fred Nagel let the permit expire and never called for a final inspection,” Spencer wrote as the secretary for the group in a complaint delivered to the supervisors and addressed to Bunch. “No certificate of occupancy was ever issued. Fred and Theresa Nagel were well aware that the assessor’s office must receive a copy of the certificate of occupancy or final inspection to determine the appropriate tax.
“Fred and Theresa Nagel have been paying taxes on this property as uninhabitable/unfinished. This tax rate is far below the actual tax for the finished house they have been living in for 24 years.”
According to kanwehelp, “Fred and Theresa Nagel have both held public offices. The city of Susanville and Lassen County have employed Fred Nagel in various positions, all relating to real property. Fred Nagel is currently on the LMUD (Lassen Municipal Utility District) board. Theresa was Lassen County Clerk and Recorder.”
Bunch explained one of his real estate appraisers “following state regulations, basically locked in the value of the Nagel cabin at the lake. After a certain number of years, if there’s no activity, we’re supposed to lock in that value and set up a base year value for Prop 13 and then that starts going up 2 percent a year. Later, when they do construction, finish up a project or a house, then we add the additional value.”
Bunch said he keeps his appraisers in the same geographic area so they have a good feel for property values, and this appraiser retired soon after he locked in the value. Bunch said the appraiser should have coded the property for a review after a couple of years to see if the project’s coming along or not, but he didn’t do that.
“His note was, permit expired, will need new permit to complete, and I guess he thought that’s all that was needed,” Bunch said, “but actually that’s not correct. You don’t get a new permit, you get a permit extension. Where he should have coded it so the next appraiser to take the area after he retired would have known that he had a partially complete house there.”
Bunch said he called the Nagels and they said they completed the house about five years ago, “and the law does call for about four years of what they call escape assessments — a rebilling of the tax that should have been assessed to begin with.”
Bunch estimated the Nagels will owe about $2,000 at the most for all four years added together.
According to Bunch, the county has a 1 percent tax rate.
“The bill that will come out this month is based on a value of $55,947 for the land (based on a Prop. 13 1987 purchase price) and you won’t be reappraising the land with Prop. 13. When you build a building you don’t reappraise the land, you just appraise the building. The improvements right now are $58,245. And that’s a good value. That will stay, it’s just that I have to finish adding to that improvement value the work they did later. So those two numbers add up to $114,192, and the taxes on that are about $1,200.”
Bunch said in addition to the 1 percent tax rate, that bill also reflects other assessments such as a fire protection district.
Bunch said there would not be any penalties assigned because it was an assessor’s error.
“We missed it,” Bunch said, “they did not. They didn’t hide it. They had a permit to start with. With the way Prop 13 works and so many people have low values based on the way Prop 13 works, I don’t think they even noticed it.”
Bunch declined to comment on the permit process because that is a function of the county department of planning and building services.
Planning and building services department
Maury Anderson, director of planning and building services, said his department advises the assessor’s office when a project passes its final inspection.
Anderson joked Lassen County was like the “Wild West” until the late 1990s and the department is much more diligent today than it was in the 1980s when the Nagels took out the permit for their cabin.
Based on a review of the file, Anderson said a building permit for a single-family residence was pulled in 1987, the county completed several inspections for things such as footings and power poles, but there is no final inspection slip.
Anderson said they may not have had a final inspection or the results of the final inspection are just not included with the file.
Based on research by his department, Anderson said the Nagel’s permit had expired.
“The files from the 1980s are not always very complete,” Anderson said. “In 2008 we did a project where the building official wrote letters — I think he went back five years — to people who may not have gotten certificates of occupancy. We had some compliance, but we wouldn’t have gone back to the 1980s.”
Anderson said the property owners frequently come to the county to obtain a certificate of occupancy when they want to sell their property because the lender asks for one.
“Back in the 1980s I have no idea what they were doing or why they were doing it,” Anderson said. “I don’t know what the relationship with the assessor’s office was or how they measured this kind of thing back in the 1980s.”
According to Spencer, this is just one example of elected officials and their friends manipulating the system, and she said more revelations are to come.
“The process is only favorable when you know the process, and the Nagels knew the process, Spencer said. “They knew if they didn’t file a final inspection or didn’t ask for a notice of completion, that nothing would go to the assessor’s office. I’ve spent a lot of time there, and a lot of kanwehelp people that have spent a lot of time searching. There is a real problem. It only seems to be where an elected official can make a phone call, and it’s not a good thing.”
Fred Nagel declined to comment for this story.
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