Property tax bill error: what happened, what next

Marsha Sutton
Marsha Sutton

By Marsha Sutton

Following last week’s column on the property tax bill error caused jointly by the San Dieguito Union High School District and the county of San Diego, left unsaid was how it happened and what’s in place moving forward to ensure it never happens again.

San Dieguito’s $449 million general obligation bond, which passed by a narrow margin last fall, promised a maximum tax of $25 per $100,000 in property value. But the tax bill issued to all property owners in the San Dieguito district assessed $37.50 per $100,000.

The amount that would have had to be refunded, had the county and district not managed to revise and mail corrected tax bills before the due date, would have been about $7 million.

The error on the original property tax bill, mailed last fall, was first discovered and reported in this column on Oct. 24.

Rick Schmitt, SDUHSD superintendent, explained in an interview that the bond instructions for the county as the fiscal agent called for $160 million to be transferred to the school district and $8 million in premiums to stay with the county.

Instead, the county transferred the $8 million to the district along with the $160 million, and the $8 million sat unnoticed in a special school district account for six months.

Schmitt said mistakes were acknowledged on both sides. SDUHSD should have seen the $8 million and realized it was in the wrong place, and district staff didn’t read the bond instructions properly. The county, for its part, erred by sending the $8 million to the district in the first place, and county staff should have noticed it and asked for it back, he said.

“This [$8 million] was transferred to us but should have gone into the sinking fund on the day of the closing,” SDUHSD’s associate superintendent of business services Eric Dill said, calling that “an oversight on our side where we could have caught this in advance.”

Also, when the county asked the district where the funds should be transferred to, Dill said he didn’t realize that also meant the premium.

“I believe they should have known where to transfer the funds because it was in the closing instructions,” Dill said. “But when the funds were received by us, we should have noticed that and we didn’t.

“That ultimately was how they calculated the higher amount, because the funds weren’t sitting in the county treasury for them to consider as available.”

Dill in an understatement called it “a long and complicated issue.”

Two departments at the county were involved in discussions on the issue – the auditor/controller’s office and the tax collector’s office.

“While there is clear duty to check and recheck and double-check and triple-check numbers, sometimes the processes don’t happen,” said county Treasurer/Tax Collector Dan McAllister, whose department issues property tax bills based on numbers provided by the auditor/controller.

“We’re a large organization; the school district’s a large organization,” he said. “To think that mistakes don’t sometimes get made is sadly not true.”



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