The 2017-18 Napa County Grand Jury took a close and critical look at the Williamson Act in its investigation of Assessor John Tuteur. The Board of Supervisors on Tuesday also probed the topic, expressing a positive view of the program in general while wanting in the future to look at more specifics.
Napa County supervisors talked about existing Williamson Act property tax breaks for agricultural land owners – including those in the heart of Napa Valley’s world-famous wine country—and made no proposals for sweeping changes.
Napa County’s $200 million general fund loses $1 million annually because of Williamson Act contracts for both vineyards and grazing land, county officials said. In return for the tax breaks, landowners under Williamson Act contracts agree to keep their land in agriculture for 10 years.
“This is a very small investment, if you will, toward protecting our agricultural heritage,” Supervisor Belia Ramos said.
Supervisor Ryan Gregory agreed.
“I see what we’re doing here as one more layer of ag protection at a relatively low cost to this county,” he said. “For me, this still makes sense.”
Supervisors Alfredo Pedroza and Ramos both said they want to make sure Williamson Act property owners comply with the minimum standards of the contracts. That will be a topic for continued discussion at a date to be announced.
The grand jury accused Tuteur of four “willful or corrupt misconduct” charges, three related the Williamson Act. This provided the backdrop to the Board of Supervisors workshop on the Williamson Act, though the grand jury accusations didn’t come up.
“Napa County contains some of the most highly valued vineyard property in the world,” the grand jury accusation papers said.
All agricultural preserve and agricultural watershed land is restricted to farming under county law without regard to the Williamson Act, the papers said. Yet the tax breaks designed to preserve agriculture lower the county’s $37 billion property tax roll by $573 million.
The grand jury calculated owners of these “high-value properties” pay about $6.3 million less per year in property taxes than they would if the program wasn’t in place. This is tax money that would otherwise go not only to the county, but local schools, cities and other agencies.
Tuteur attended the Board of Supervisor’s Williamson Act workshop. Gregory asked him about the Williamson Act’s financial effects.
Napa County has 848 Williamson Act contracts and 402 do not yield the property owners any financial benefits, Tuteur said. Those seeing no benefits all involve vineyards, he said.
That’s because Williamson Act property owners either pay taxes based on their Proposition 13-adjusted land value, like every other property owner, or based on agricultural production. In most counties, land value that includes the potential for subdivisions and other development is often the higher option.
But in Napa County, as Tuteur explained, grape production and pricing is lucrative enough that the Proposition 13 value for vineyard land is usually lower. The exception might be a year with low production or low grape prices.
Those 446 contract holders who benefit financially from the Williamson Act either own grazing land or just bought a vineyard, Tuteur said. Only the land dedicated to agriculture receives Williamson Act tax breaks, not improvements such as wineries, homes and other structures, he said.
Tuteur’s mere presence at the hearing raised questions. One grand jury accusation said he improperly advised the Board of Supervisors on Williamson Act policies in 2011, given he has ranch land that receives the tax breaks.
“I need to disclose I am a trustee and owner of parcels that are under the Willamson Act,” Tuteur told supervisors at the start of Tuesday’s session.
County Executive Officer Minh Tran said the item was informational only and no Board decision would be voted on that day. Any decisions would apply not only to Tuteur, but all Williamson Act landowners. He saw no conflict of interest in Tuteur providing information.
The grand jury accused Tuteur of not doing enough to require more Williamson Act property owners to return questionnaires to the county. These questionnaires ask for agricultural production information used to help calculate property tax rates.
Supervisors didn’t bring up the topic. A county report mentioned only that a 2009-10 state audit of the local Williamson Act program recommended the county improve the questionnaire process.
Planning, Building and Environmental Services Director David Morrison briefly referred to two “fairly minor” findings in the audit he said have since been addressed. He also noted the county in 2005 received the Stewardship Award from the state for its Williamson Act program.
The grand jury accused Tuteur of failing to look at actual or fair rental income for grazing lands. The county instead uses a minimum value established in 1969 and never updated. Tuteur has a conflict of interest because if the minimum value rose, so would his taxes, the accusation said.
A county report recommended the county continue using the income values. Tuteur said the values are apparently still reasonable.
Supervisors neither endorsed nor contradicted that idea.
Supervisor Diane Dillon noted the California Department of Conservation is no longer doing Williamson Act audits of counties. Where, she asked, does the oversight exist?
Morrison said the Department of Conservation’s interest in the audits subsided when the state stopped back-filling counties for some of the property tax losses. That happened during a state budget-cutting move during the Great Recession.
Dillon wanted to know what the Assessor’s Office, Planning, Building and Environmental Services Department and the Board of Supervisors are each responsible for regarding the Williamson Act. That information will come at a future meeting.
“Hearing the audits are not going to be happening, we need to pay closer attention to that,” she said.
May 9, 2018
Napa Valley Register
By Barry Eberling
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