Time for payback; City may have to return up to $141K to state

By Brian Knox | Published Saturday, June 7, 2014

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Another local government entity will have to pay thousands of dollars in sales tax money back to the state.

On Tuesday, the Chico City Council discussed an agreement to repay the state comptroller’s office due to an overpayment of taxes by a large business over the years from 2005 to 2008. That business submitted a refund request to the comptroller’s office, and it was granted.

The exact amount Chico will have to pay back is not known, although the city has already received a bill for $66,000.

“More claims could be coming,” Clark said. “We discussed what our maximum damage would be if the comptroller awards all of the refund request. It could be another $75,000 added to the $66,000, maximum for the city.”

The council agreed to a 15-year payment plan to repay the money. Clark said payments of $500 per month will begin Oct. 1 of this year. If the $75,000 bill is received by the city, payment of up to $1,000 per month was authorized. That payment will be automatically deducted from the sales tax refund the city receives each month. Those refunds have recently been around $20,000 to $25,000 per month.

Clark said by paying the money back over the course of several years, it won’t affect any city services or projects going forward.

Chico is one of 65 jurisdictions affected by the business’ refund request. On Monday, county commissioners discussed a similar plan to pay back $639,000 to the comptroller’s office due to overpayment by the same large business, which has not been identified publicly.

The council also approved a task order with city engineer KSA Engineers Inc. to begin the permitting process to allow the city to sell its treated wastewater. In March, the city agreed to sell the wastewater to P&K Stone for a limestone quarry to be built just east of town off Farm Road 1810.

As part of the agreement, P&K will pay for any infrastructure needed to sell the wastewater, including the permitting fees. The agreement would also allow the city to sell wastewater to other companies once the infrastructure is in place.

“It’s a benefit because we’d rather see the rock quarry use wastewater for dust control and watering down the rock than use good drinking water,” Clark said.

In other business, the council decided not to change the current city ordinance banning the sale and discharge of fireworks in the city limits. The city had been asked to consider lifting the ban on selling fireworks.

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