Supervisor Derry

State scrutinizes S.B. County assessment roll
Riverside Press Enterprise

10:00 PM PDT on Friday, September 4, 2009

By JIM MILLER
Sacramento Bureau

SACRAMENTO - State tax authorities are wrapping up a report on property assessments in San Bernardino County, the first state look at the day-to-day operations of the county assessor's office under former chief Bill Postmus.

State Board of Equalization spokeswoman Anita Gore declined to say if workers have found any signs of improper changes to the county assessment roll. A full report will be released no later than February, she said.

Postmus, once one of the county's most powerful political leaders, was San Bernardino County assessor from November 2006 until he resigned in February following his arrest on drug charges.

Experts from the state Board of Equalization visited the county last spring and summer and sampled part of the 2007-08 assessment roll. They also interviewed Postmus and his staff and reviewed other records, officials said.

The state Board of Equalization survey was regularly scheduled. But the agency's upcoming report will mark the first in-depth outside scrutiny of any of the thousands of property reassessments granted during Postmus' rocky 27 months as assessor.

In May, a county-commissioned investigation included unproven allegations that Postmus tried to help friends on assessment matters, such as by reducing properties' assessed values to lower their taxes. A Press-Enterprise review of county data found no notable reassessments involving some two-dozen known Postmus allies and political associates.

Gore said the board's survey team knew about the controversies surrounding Postmus.

The scheduled report comes as assessors around the state close the books on 2008, which showed the first year-to-year drop in assessed values since 1933.

California's assessed value for 2009-10 is $4.4 trillion, down $107.2 billion from the previous year, a 2.4 percent drop. Riverside County's assessed value dropped by 11 percent and San Bernardino County's fell by 6 percent.

San Bernardino County's new assessor, Dennis Draeger, said he is confident that all of the county's reassessments complied with the law.

"If there's something bad, they'll find it," he said of the Board of Equalization.

New rules

Government has a major stake in the reassessment process. Property assessments determine property taxes, a major source of revenue for local governments. The state, meanwhile, has to make up what schools lose in local property-tax money.

In the 1960s and 1970s, a string of assessment scandals hit San Francisco, Los Angeles, San Diego and other counties. Officials allegedly took bribes to reduce the assessed values on certain properties.

The problems spurred lawmakers to pass legislation creating the Board of Equalization to oversee the process. The board's creation put county assessor officials on notice that corruption eventually would be uncovered, said David R. Doerr, an expert on California tax history at the California Taxpayers Association.

In early 2005, a Board of Equalization team reviewed nearly 2,000 assessments in San Francisco after media reports suggested there had been improper changes. The state investigators found no wrongdoing.

"The system has stood the test of time," Doerr said.

Postmus, a former county supervisor, left the board and became assessor in November 2006. His office soon came under scrutiny.

In August 2007, prosecutors began examining possible misuse of public resources for political activity.

In April 2008, investigators from the district attorney's office raided the assessor's office. In June last year, a county grand jury alleged that Postmus and his top aides mixed politics and government business.

Postmus refused calls to step down and claimed that the allegations were part of a political witch hunt. He resigned this February, several weeks after his arrest on drug charges.

In May, an independent counsel hired by the San Bernardino County Board of Supervisors released a 55-page report alleging an array of misdeeds in the assessor's office. The accusations centered on allegations that Postmus aides did political work on government time.

But the report also included a whistleblower's accusations that Postmus was involved in a "pay-to-play scheme" concerning San Bernardino land deals and help with assessment issues.

The whistleblower's letter came a few weeks before the report's release and could not be investigated fully, the report said. Officials have refused to release the letter.

The report also detailed the case of a property appraisal involving a friend of Postmus.

According to the report, the friend contacted the assessor's office in October 2007 and demanded a lower assessment on his property. But he would not let anyone come onto the property, and county appraisers refused the request, according to the report.

The man allegedly told the officials that he was a friend of Postmus. The appraisers complained to a top Postmus aide, Jim Erwin. Erwin told Postmus, and Postmus got angry that the appraisers had gone to Erwin, the report said.

The report said Erwin believed Postmus wanted the appraisers to lower the assessed value of his friend's property.

After the report's release, Postmus called it a "taxpayer-funded hit piece" and denied any wrongdoing.

People's experiences

Some people who had property reassessed last year said they never saw signs of problems in the assessor's office. But that doesn't mean they're happy about the outcome.

John Vach, of Glendale, owns property next to San Bernardino International Airport on Third Street. Last year, the county lowered the property's assessed value from $1.35 million to $1.1 million for the 2009 tax year.

That's still too high, Vach contends. He said the assessed value should be lowered another several hundred thousand dollars and has appealed to the county.

"You can go and try to get someone to buy at that price, and there's nobody out there," Vach said. "It's really frustrating. We're still paying property taxes way above what we should be."

Reach Jim Miller at 916-445-9973 or jmiller@PE.com

Changing values

Assessor's offices in Riverside and San Bernardino counties lowered the assessed value of many properties in 2008 under Prop. 8. The 1978 law allows for temporary reductions in assessed value to reflect market value.

Riverside County

Number of parcels: 771,665

Number of Prop. 8 reassessments: 200,237

Average beginning value: $393,724

Average ending value: $312,566



San Bernardino County

Number of parcels: 809,763

Number of Prop. 8 reassessments: 100,360

Average beginning value: $401,430

Average ending value: $333,412

review of data from County assessor's offices

For specific details go to Postmus Form 700 page on right.


Postmus' Land Deals Detailed
Riverside Press Enterprise 10:00 PM PDT on Tuesday, August 25, 2009
CASSIE MACDUFF
Among the surprises contained in the search warrant affidavit released last Friday in the investigation of former Assessor Bill Postmus was this nugget:

Postmus allegedly used insider information when he and High Desert developer Dino DeFazio bought six parcels near Lucerne Valley through their Tri-Land Inc. real estate investment company.

A confidential informant told investigators Tri-Land bought three parcels because Postmus knew a major developer planned a large-scale development nearby.

Postmus didn't respond to a request for an interview Tuesday afternoon, so I couldn't ask him about his real estate deals.

But the affidavit spells out what investigators believed were violations of the law.

First, Postmus characterized Tri-Land as a partnership on his official Statement of Economic Interests, which elected officials are required to file annually to disclose potential conflicts of interest.

The company is not registered as a partnership; it's registered as a corporation and DeFazio is listed as the sole officer, so the statement was false, per the affidavit.

Second, on his 2007 Statement of Economic Interests, Postmus didn't declare the value of his ownership in Tri-Land as required.

Third, the deed for one of the parcels was transferred to Tri-Land as a gift, but Postmus didn't declare it as a gift on his economic disclosure form, the affidavit says.

Fourth, Postmus claimed in testimony before the grand jury that he used the proceeds of the 2007 sale of his home in Hesperia to buy the six parcels with Tri-Land.

But three of the six parcels were purchased before Postmus sold his home, the affidavit says.

And according to investigator Robert Schreiber, who has specialized training in white-collar crimes and has also been a licensed real estate broker for 27 years, it's unlikely there were any proceeds from the sale because Postmus had borrowed up to $299,000 against his home, which sold for $306,000.

It's important to note that, although Postmus has been charged with nine felony counts of grand theft, misuse of public funds, perjury and drug possession, he hasn't been charged with anything related to Tri-Land. Does this mean he's off the hook?

Lewis Cope, who heads the DA's Public Integrity Unit prosecuting Postmus and other former assessor officials, said his office is still investigating things that came to light during the two-year investigation of Postmus' office.

I asked Cope why Postmus wasn't charged with perjury or filing false documents, as was his former assistant Jim Erwin for failing to disclose a gift on his Statement of Economic Interests.

Erwin faces 10 felony counts because he didn't report a Rolex watch and a trip to New York he received from a developer.

Cope couldn't comment because of the ongoing investigation.

Nor could he tell me whether the matter has been referred to the Fair Political Practices Commission, which can sanction officials for failing to disclose gifts.

If Postmus did use insider knowledge to buy property he knew was likely to increase in value because of a development planned nearby, he was following in well-worn footsteps.

Former CAO Harry Mays, when he was county purchasing director, turned a tidy profit by buying six houses being sold by the county conservator and flipping them.

At a Tuesday afternoon ethics workshop, the Board of Supervisors was told the grand jury has recommended that the county ethics code be amended to bar public officials from using their offices for personal gain.

It should be a no-brainer. But some people must need reminding.

Cassie MacDuff can be reached at 951-368-9470 or cmacduff@PE.com