Unsealed transcripts show the 2017-18 Napa County grand jury building its corruption or willful misconduct case against Assessor John Tuteur, with a related look at whether wealthy wine country landowners receive undeserved tax breaks.
Napa County Superior Court has unsealed transcripts of grand jury interviews with seven witnesses done on Feb. 21, Feb. 28 and March 7. Six of the witnesses came from the Assessor’s Office, including Tuteur, and one from the county Planning, Building and Environmental Services Department.
Tuteur wanted the 300 pages of grand jury transcripts unsealed so he can use them in his defense. The Napa Valley Register also asked the court to make the transcripts available so the public would have insight into proceedings involving a key, local elected official.
Grand Jury foreperson Alan Charles Dell’Ario, a local attorney who has practiced law for more than 40 years, questioned each of the witnesses while the other grand jurors listened.
One witness was appraiser Lisa Carlile, who filed the complaint against Tuteur. Dell’Ario immediately noted that Carlile had unsuccessfully applied for promotion to a supervising position in 2015, an outcome that another witness said upset her.
Dell’Ario questioned Carlile on the issue. She said she told the employees’ union she believed she has been passed over because she challenged Tuteur on some issues she didn’t think followed the letter of the law.
“I told (Tuteur) in fact when I was passed over that I felt he passed me over because I knew too much, and I said that direct thing to him at the time,” said Carlile, whose position title is an appraiser level III.
Carlile testified she told the county Human Resources Department that trying to process Williamson Act claims she didn’t feel were right created a stressful work environment. On the advice of attorneys, she then went to the state Attorney General’s Office and was told to further pursue the matter at the county level.
The Williamson Act, formally known as the California Land Preservation Act of 1965, provides tax breaks as an incentive to preserve agricultural land. A farmer can pay property tax based on what the farmland produces, as opposed to a market value that includes the potential for subdivisions and other development.
Counties can enter into Williamson Act contracts with agricultural land owners. In return for the tax break, the owners agree to preserve the farmland from development for 10 years, with the contract automatically extended annually for an additional year unless not renewed.
Dell’Ario at one point told a witness that the grand jury was struggling with Williamson Act issues. He said some Williamson Act properties are apparently not even required to have agricultural income and that county laws already protect farmland from development.
“My question then to you is what does this Williamson Act do for the citizens of Napa County that zoning doesn’t do and why should we be forgoing this tax increase?” he asked county Supervising Appraiser Jennifer Tydingco.
The county has 680 contracts covering 76,671 acres, with the grand jury saying owners receive a total tax break of about $6.3 million annually.
“I think it’s a double layer of assurance that the property won’t be developed,” Tydingco replied. “That’s my best answer.”
At another point, Tydingco said in response to Dell’Ario’s questioning that some Assessor’s Office employees disagree about the way the county handles Williamson Act contracts.
“My appraiser IIIs have voiced concern that people are getting too big of a tax break because of the ag contracts,” she said. “I’ve had one of my appraiser IIIs call it welfare for the rich.”
The Assessor’s Office sends out questionnaires to Williamson Act property owners for income-and-expense information to help calculate property value. In 2016, only 20 percent of the vineyard owners and 60 percent of the grazing land owners returned the questionnaires.
Several of the Assessor’s Office witnesses said such information is important and Tuteur hasn’t sought penalties for noncompliance. When questioned by Dell’Ario, Tuteur said the questionnaires that come in and other data is sufficient to do the job properly.
“Clearly, it would be more accurate to have everybody’s actual production rather than using the county average,” he said at one point. “But the average from a fairness and equity point of view is appropriate.”
Tuteur said that a low rate of returned questionnaires is a statewide problem.
Tuteur also testified that most of the high-value lands under Williamson Act contracts don’t see a benefit.
He told the story of wealthy person who came to Napa Valley in the late 1980s and bought vineyard land at a high price. The Williamson Act allowed his property to be taxed based on what the vineyard land produced, as opposed to that base land value, saving him money.
But eight years later, the man made so much money from grape production that he switched back to the base land value, Tuteur said.
“So most of the high-value lands are getting no benefit from the Williamson Act,” Tuteur said. “They are at base year value.”
But the grand jury accused him of refusing to take action to force non-complying landowners to submit the questionnaires, resulting in the county receiving less tax money than it should. As a result, the accusation said, he should be removed from office.
Another Williamson Act issue that Dell’Ario probed is how the Assessor’s Office calculates value for rangeland. The office doesn’t use up-to-date grazing income reports, but instead relies on a minimum value formula adopted by the county in 1969 and never revised.
Tuteur owns rangeland that is under a Williamson Act contract. Dell’Ario noted during the hearings that if the minimum number were to rise, so would Tuteur’s taxes.
“So is it fair to say that Mr. Tuteur has an interest in not revising this document?” Dell’Ario asked Carlile.
“Yes,” she said.
Later, Dell’Ario brought up the issue of the minimum imputed income with Tuteur. Tuteur said he believes that almost-four-decades-old number is reasonable to use when calculating rangeland value.
“Have you ever conducted or directed your staff to conduct any studies to see if that was so?” Dell’Ario asked.
“I have not,” Tuteur said.
Later, he elaborated why he has not asked the county Board of Supervisors to revise the number. The price of grazing land rents hasn’t changed much, he said.
“How would you know if you haven’t had a study done in your office?” Dell’Ario asked.
“I don’t know,” Tuteur said. “But I can tell you, being in the business, so to speak, that we have not changed rents. We have one parcel that we rent and that hasn’t changed for 15 or 20 years, nor would I suggest that I would increase that rent.”
The grand jury in its written accusation of Tuteur concluded Tuteur knowingly failed to determine the actual rental incomes for rangeland under Williamson Act contracts to assess them as required by law. This willful misconduct warrants his removal from office, the grand jury concluded.
Another accusation focuses on whether Tuteur and his family failed to pay back property taxes.
Tuteur receives rental income for a cell tower on his property. An employee in 2016 corrected an error in the property assessment involving the lease income. But Tuteur failed to pay $20,000 in back taxes for 2008 through 2015, the grand jury claims.
Tuteur told the grand jury he didn’t remember if a mistake had been made on his property.
“Your assessed valuation went up $170,000 in – whatever year that is, effective 2016. That would have caught your attention, wouldn’t it?” Dell’Ario asked.
“Well, yeah,” Tuteur replied.
Dell’Ario asked Tuteur if he knew why the higher valuation came about. Tuteur said he didn’t.
Then Dell’Ario asked if the higher assessment didn’t make Tuteur wonder if there should be a roll correction made for prior years as well.
“I didn’t – I didn’t think about it or ask about it,” Tuteur said.
The grand jury accused Tuteur of knowingly failing to discharge his duty and pay the back property taxes. Again, it said the penalty should be removal from office. The grand jury also filed a separate, civil complaint to recoup the back taxes.
The grand jury interviews were apparently grueling at times.
For example, Dell’Ario led Chief Appraiser Richard Anderson through a session delving into various minutia of appraising. The conversation turned to an employee who is not an appraiser and who Anderson agreed doesn’t know much about appraising.
“I’m questioning whether I do after today,” Anderson joked as the questioning wrapped up.
“Well, I apologize about that,” Dell’Ario said.
At another point, Dell’Ario addressed the other grand jurors about the importance of their task.
“I hope you appreciate I have some – have to exercise some legal judgment here because if we do return an accusation, then this record will be available to the accused and these proceedings will likely to be scrutinized to see that we did it properly,” Dell’Ario told the other grand jurors.
In a press release, Tuteur expressed satisfaction that Napa County Superior Court Judge Mark Boessenecker released the grand jury transcripts without redaction of witness and grand juror names.
“I am pleased by the judge’s action, which now allows me to proceed to show that the accusation was unfounded,” Tuteur said.
May 7, 2018
Napa Valley Register
By Barry Eberling
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