San Mateo County Supervisor David Canepa is calling for full transparency in the county Assessor’s Office as dozens of cities and schools brace for millions in revenue deductions this year after the county reached a settlement with biotech company Genentech.
The county must refund Genentech nearly $20 million stemming from incorrect property tax assessments between 2000 and 2005. The county Assessor’s Office and Genentech, which is headquartered in South San Francisco, have engaged in a long-running dispute over property tax assessments.
The county agreed to refund Genentech about $13.7 million, plus $6.2 million in interest if the full payment is made by October.
But dozens of cities, schools, and special districts that get a large chunk of funding from the county will have to bear the cost of the settlement, according to a letter from the Controller’s Office sent last month to affected bodies.
The $20 million will be refunded through revenue deductions from fall tax apportionments to these entities.
“When mistakes from decades ago result in a $20 million refund, the impact lands squarely on the budgets that serve our communities,” Canepa said in a statement. “Schools, cities and special districts shouldn’t be blindsided by more refunds years down the road.”
The Assessor’s Office said it spoke with affected cities, schools, and districts about the potential loss in revenue.
“Throughout the settlement process, the Assessor’s Office worked transparently with affected taxing entities, including school districts, to communicate potential impacts to property tax revenues,” the office said in an email.
The Board of Supervisors approved the stipulated judgement in December 2023 in a closed session meeting, according to the Assessor’s Office.
Jim Irizarry, the assistant assessor-county clerk-recorder and assistant chief elections officer, said the Board would have known at the time of its decision that tax revenue would have to be deducted from recipients like school districts.
But Canepa said he wouldn’t have voted for it if he knew that schools would be facing a reduction in revenue.
“This is a major hit to schools, cities and special districts that rely on property tax revenue to keep services running,” Canepa said. “We need full transparency from the Assessor’s Office about what happened and what additional financial exposure may still be coming.”
Schools, cities hit hardest
The San Mateo County Community College District, Sequoia Union High School District, and the San Mateo Union High School District are estimated to take hits of over $1 million each, according to the letter.
The cities of San Mateo and Redwood City are estimated be shorted over $400,000 each and Daly City is expected to not receive nearly $230,000. The town of Hillsborough and the cities of Burlingame, Menlo Park, Pacifica, and San Carlos are expected to be shorted more than $100,000 each.
The Menlo Park Fire Protection District, which provides emergency and firefighting services for Menlo Park, Atherton, East Palo Alto and some unincorporated parts of the county, is estimated to be hit with a nearly $469,000 reduction in funding.
According to the letter, there are remaining disputes over property tax assessments with Genentech for the 2006 to 2024 tax years that have yet to be settled. Thus, it is possible that there may be more refunds to the company down the road.
Canepa is also running to become the next assessor-county clerk-recorder and chief elections officer. The current officer, Mark Church, decided to not run for re-election and his term ends next January.
“It’s because of this malfeasance and because the office is not run properly,” Canepa said about his bid for the seat in an interview.
Claims for tax years 2006 to 2018 are currently under review by the county Assessment Appeals Board and are expected to be resolved within one to two years. If Genentech is successful, the potential refund is expected to be $4.5 million plus interest, according to the Controller’s Office.
The outstanding claims for tax years 2019 to 2024 are also still pending.