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Shirvani could owe thousands in California property tax

TURLOCK, Calif. -- The head of the North Dakota University System likely will have to pay thousands of dollars in uncollected taxes because of a five-year assessment error on his former home here, the Stanislaus County assessor said this week.

Dave Cogdill said the "fluke" went unnoticed by the assessor's office and wasn't the fault of Chancellor Hamid Shirvani, who was president of California State University-Stanislaus from 2005 until July 2012.

"There wasn't anything that he did or should have done that didn't take place here," he said. "It was just strictly an assessor's error internal to the office."

Shirvani's former house in this city of about 69,000 in California's Central Valley sold last month for $610,000. A Sunday article in The Modesto Bee looked into the "short sale," meaning the sale didn't raise enough to cover what he still owed on the nearly $1.2 million Bank of America loan he received in 2007.

Cogdill said research for the article found incorrect property assessments on the house since 2008 that could add up to a tax bill of more than $10,000.

The issue started with a large remodeling and expansion project that began in June 2006, just four months after Shirvani paid $664,000 to purchase the house built in 1968. The work, with a total valuation of about $280,000, added 1,509 square feet and a four-car garage.

The county reassessed the property in February 2007 at the end of the renovation, putting the value at $877,500. But home values were dropping across much of the country at the time, and Cogdill said Stanislaus County lowered assessments on Shirvani's house and many others in 2008.

After the renovation, revised details of Shirvani's home such as the new square footage, garage type and overall quality weren't updated in the house's database with the county. That meant that during the 2008 assessment lowering, the computer program that crunched the numbers based the value on the pre-renovation condition.

Cogdill said in the case of Shirvani's home, that resulted in a new assessed value of $310,000 -- about half of the correct value.

The Modesto Bee article said basic annual property taxes not including school bonds and other extras are 1 percent of the assessed value, which would add up to $8,775 per year on a house assessed at $877,500. Shirvani would have owed about $3,100 for the years his home was assessed at $310,000.

Cogdill said the county is required by law to go back a maximum of four years to collect on these unpaid taxes. He said Shirvani will almost certainly have to pay the difference for the past four years, though the assessor's office hasn't yet contacted him.

Tax bills are usually sent out Oct. 1 each year, and if Shirvani is required to pay, he would have about 60 days after receiving the bill to file an appeal.

Shirvani said he will deal with any bill he receives, and he hadn't yet been notified of any errors or underpayment.

"I've always paid my bills on time, trust me, and I'll be more than happy to with any obligation I have," he said. "But I haven't done anything wrong."

Cogdill said the county has taken steps to prevent this problem in the future, including requiring more review any time a property value drops or rises by more than 10 percent in a given year.