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Bell property tax rate second-highest in L.A. County

Homes of the same value in richer cities are taxed at a much lower rate, county tax records show. Residents are already angry about excessive salaries paid to officials.

July 30, 2010|By Kim Christensen and Paloma Esquivel, Los Angeles Times

The small working-class city of Bell not only paid officials the highest salaries in the state: Residents also pay the highest property tax rates of all but one of Los Angeles County's 88 cities, county tax records show.

The records appear to confirm complaints by Bell residents who have expressed outrage that they seemed to be paying excessive taxes at the same time the city was paying its top administrator nearly $800,000 and council members were paying themselves nearly $100,000.

"They're robbing us of our money," said Juan Madrid, 64, who has owned his tidy yellow home with peach trim on Walker Avenue for about 30 years

Like other residents of this largely immigrant city of about 39,000, he has watched as his property taxes have climbed in the last few years while the value of his home has slumped.

All county property owners pay 1% general property tax, along with special or direct assessments levied by their municipalities. The countywide average of all tax rates is 1.16%, or $11.60 for every $1,000 of assessed value.

The rate in Bell is 1.55%.

That means the owner of a home in Bell with an assessed value of $400,000 pays about $6,200 in annual property taxes. The owner of the same house in Malibu, whose rate is 1.10%, would pay just $4,400.

Bell's property tax rate is nearly 50% greater than those in such affluent enclaves as Beverly Hills, Palos Verdes Estates and Manhattan Beach, and significantly higher than just about everywhere else in the county, according to records provided by the county auditor-controller's office at The Times' request.

The only place with a higher rate than Bell's is the City of Industry — but it has only 21 residential parcels that are affected. Bell has 2,065 single-family homes and 1,568 residential rentals, according to city documents, which include 522 commercial-industrial properties in a total assessed valuation of $1.4 billion.

The Times reported earlier this week that the city had cut spending on police and community services, even as it continued to raise salaries for City Manager Robert Rizzo, Assistant City Manager Angela Spaccia and Police Chief Randy Adams to some of the highest in the nation.

Rizzo was paid $787,637 a year, Adams' salary was $457,000 and Spaccia's was $376,000. All three resigned amid public uproar after The Times reported the amounts earlier this month.

Their salaries and Bell's hefty property taxes contrast sharply with city residents' financial standing. Median household income in Bell, just southeast of Los Angeles, is $40,556 — well below the countywide average of $57,152.

The city's tax rate is due to a combination of factors, records show: among them, bond debt for municipal improvements such as a sports complex now under construction and a "retirement tax" approved by local voters in 1944 that put property owners on the hook for some of the cost of municipal employees' pensions.

Since 2006, county records show, those local taxes have doubled. So have direct assessments for trash collection, sewer maintenance and other services.

In 2005, Bell voters approved a measure that adopted a City Charter, a move that allowed council members to get around state limits on their salaries. It is unclear what bearing, if any, that had on raising property taxes.

Revenue from the tax increases went to designated funds or services and did not directly pay for administrators' salaries. But by freeing money from the city's general fund, the higher taxes appear to have made the outsized salaries more feasible for the small city.

For at least 20 years before 2007, the retirement tax — formally known as a Post-retirement Benefits Fund-Pension Obligation — had stayed at the same rate of 0.187%.

In 2007, two years after the city issued nearly $10 million in bonds to finance a loan to cover its unfunded pension liability, the City Council passed a resolution calling for a series of hikes over the next three years. The current rate is 0.277%, or half again what it was three years ago.

The council also passed a resolution that year nearly doubling assessments for services including refuse collection, which went from $14.71 a month for a single-family residence to $26.48 a month.

And this year, a 0.09% assessment kicked in to cover the $15-million debt on a sports complex that is planned to include a soccer field, baseball stadium and a gym at a projected cost of $10 million to $15 million, as well as other improvements including a library and performing arts center. Taxpayers' assessments for the improvements, which voters approved several years ago, will increase over the next two years, records show.

And that's not all.

The city's most recent comprehensive annual financial report, for the fiscal year ended June 2009, suggests the retirement tax will continue to go up. It says Bell has thus far "opted to assess below the authorized amount" it can assess to pay for pensions.

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