Los Banos eyes back taxes, unpaid fees

tmiller@losbanosenterprise.comJune 26, 2013 

Los Banos City Council adopted a couple of resolutions Wednesday to collect money that should already be coming the city's way.

The first action hires Fresno-based MuniServices to comb through businesses' tax records, looking for money incorrectly sent out of the area.

The second will allow Merced County to collect on unpaid citations doled out by Los Banos.

Brett Harmon, MuniServices client services manager, said his firm works with 180 cities in the state and 900 nationwide. Essentially, the firm audits where the state allocates money.

"That money can end up in the wrong place sometimes," Harmon said.

The city will pay MuniServices $3,000 annually, and the company receives 25 percent of any money it finds that was misallocated. The fee is paid for 18 months from when misallocations are discovered.

Harmon said it's tricky to figure out how much money Los Banos can expect, that's why his firm charges the 25 percent fee.

The city can collect back taxes for up to nine months, Harmon said.

City Manager Steve Carrigan said the city doesn't have the number of employees necessary to carry out the sort of auditing the firm provides.

"The price is right at $3,000 a year," Carrigan said, adding that it will free up time for city staff to do other work.

"We're going to come out way ahead on this," he said.

Carrigan said the money identified by MuniServices and by righting the citations owed to the city will begin to add up.

"We want to run City Hall like a business," he said. "We're not going to just let it go; we're not going to let it slide."

According to city documents, 229 citations remain unpaid in Los Banos. That's a total of $42,850.

City Council authorized Merced County to pursue those that owe money to Los Banos. One power the county has is to put a lien on state tax returns.

Accounting and budget supervisor Sonya Williams said about half of the outstanding citation money hangs on Purple Cross Rx, a marijuana dispensary that remained in town for about six months despite daily $500 fines from police.

"We cited on a daily basis, so that might take a little longer to collect," she said.

The county will not charge Los Banos for the work, rather it will enforce a 15 percent collection fee paid by the person or business cited.

"It's not costing the city anything to use the resources," Williams said.

The county already provides a similar service for jail booking fees, and has returned $26,000 to Los Banos since June 2011.

Enterprise reporter Thaddeus Miller can be reached at (209) 388-6562 or by email at tmiller@losbanosenterprise.com.

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