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DOF Commits That Errors in July “True-Up” Billings Will Be Corrected

Delays Any Sales Tax Suspensions Until No Sooner Than September

July 23, 2012

On July 11, the League first reported that problems had arisen with the July 9 billings to successor agencies from county auditor-controllers that were based on “Exhibit 12” produced by the Department of Finance (DOF). City officials from throughout the state reported errors in the calculations made by DOF.


Some cities ultimately filed suit to prevent DOF from relying on the incorrect numbers and then directing the Board of Equalization (BOE) to suspend the city’s sales tax distribution. On July 18, the League again reported that BOE had informed DOF it could not implement any sales tax suspensions on July 18 since there was inadequate time to do so.      

DOF sent a letter to redevelopment successor agencies on July 20 to advise the agencies that DOF staff is reviewing the billing information provided to the agencies by county auditor-controllers to verify the correctness of the amounts billed. The letter has been posted on the League's website. The letter goes on to say that “[i]f we identify areas where it appears the county auditor-controller’s office used incorrect calculations, we will work with their staff to attempt to resolve the matter, and gain a full understanding of the circumstances that contributed to the differences. In cases where DOF staff concludes an error was made that modified the amount to which an Affected Taxing Entity was legally entitled, we will request a revision to the Successor Agency’s billing amount.” 

DOF also committed not to invoke its authority to interrupt the sales and use tax distribution to any agency earlier than September 2012. 

Commenting on this recent action by DOF, League Executive Director Chris McKenzie said: “the League has been sharply critical of AB 1484’s unnecessarily harsh penalties and ridiculously rushed payment schedule that led to the incorrect billings on July 9. On July 11 we urged DOF to correct the data. This new review plan makes sense because it will shed more light on the calculations and allow for their correction, if necessary. The decision to delay the objectionable sales tax distribution suspensions until no sooner than September is welcome for those who did not already pay the incorrect amount by the July 12 deadline. We urge DOF to keep moving in this direction.”

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