Sanitation district error leads to tax bill overcharge

Property owners in the Sonoma Valley generally receive their property tax bills in early October, which includes a lengthy list of percentages levied for various bonds, and direct charges for district fees such as fire districts, the health care district and the Sonoma Valley County Sanitation District.

But for the third time in seven years, said Sonoma resident Scott Pace, that sanitation district charge has been inaccurate.

“It’s gotten to the point where I record my own water use,” said Pace, a former supervising ranger for the California State Parks in Sonoma.

Now retired, the southeast Sonoma resident said there were similar overcharges on his 2013 and 2017 tax bills, so when he got his property tax bill this year he checked it over carefully.

“It was no surprise,” he said. “I was under the impression that they probably had not resolved the problem, and this just confirmed it.”

According to Barry Dugan, a spokesperson for the sanitation district through the Sonoma County Water Agency, which operates the SVCSD, it was not an isolated misfiling – far from it.

“There was incorrect billing for 3,029 of some 10,500 customers in district – some were over-billed, some were under-billed,” said Dugan.

That’s an error rate of almost one in three, most of whom were billed more than they owed on their annual tax bill, and the majority of those likely didn’t realize it.

The district found the error – which Dugan described as “an Excel formula error”— in mid-October, shortly after the property tax bills went out. It posted a correction notice on its website and on Oct. 19 sent a “property tax bill correction” notice to its customers.

Pace’s initial suspicion was that the City of Sonoma was to blame for providing inaccurate or incomplete readings of his water use during the winter months, November through February, a period of time when homeowners are rarely watering their plants or lawns so water use is largely what ends up in the sanitation district’s sewer system.

But Dugan unequivocally said the City of Sonoma was not to blame, and took responsibility for the sanitation district. “This was in no way associated with an error on the part of the City of Sonoma or the Valley of the Moon Water District,” he told the Index-Tribune. “The error was in an Excel spreadsheet formula.”

He explained that when the sanitation district gets annual water use files from the Valley of the Moon Water District and the City of Sonoma, “that data set has to be converted into a consistent format and merged into our files. After multiple reviews when we merged the files, last-minute changes were made to the billing file that ultimately resulted in those 3,000 customers receiving incorrect sewer charges on their property tax bills.”

Brad Sherwood, community and governmental affairs media contact at Sonoma Water, said, “There was no predominant area that was affected by the errors,” though many of the parcels were in the Glen Ellen-Springs area served by the Valley of the Moon Water District.

Matthew Fullner, acting director of Valley of the Moon Water District, said, “We did field a handful of calls (about five) regarding this issue.”

Although Pace initially suspected that the mistake in billing was due to the City of Sonoma supplying incorrect information, Sonoma Assistant City Manager Susan Casey told the Index-Tribune she double-checked with the Sanitation District and the Sonoma County Tax Collector, who both verified that the error was not due to mistaken data supplied by the city.

Casey conceded that the information the city did supply for the sanitation district charges were somewhat unusual this year.

“This year due to the mandated coronavirus shelter-in-place in March, the city notified SVCSD that the annual water usage data would be supplied late, so SVCSD based their calculations on a lowest-month rate for water and sewage for each customer.”

Dugan also cited the pandemic.

“One of the factors that entered into this was working remotely during COVID. We’re not making any excuses, we know errors were made and we apologize for those, but there were extraneous conditions,” said Dugan.

Regardless, the sanitation district shouldered the blame. “I understand how difficult it is to pay taxes and having this kind of error makes it more difficult,” said Dugan.

Erick Roeser, the county’s auditor-controller-treasurer-tax collector, told the Index-Tribune, “After 2020-21 tax bills were mailed, Sonoma Water staff informed my office that there were billing errors on the original levy. We worked with Sonoma Water to process 3,029 corrections, which resulted in 2,942 corrected bills and 87 refunds.”

Property owners were sent a “corrected bill” about a month after receiving their first bill, but it does not appear to call out the error, merely listing the correct charges. The corrected bill “replaces the original tax bill” and adjusts for the difference, and promises that if the bill had already been paid in full, “a refund will be issued.”

The total error, Dugan said, resulted in net refunds of $16,276 to district customers through recalculated property tax bills, a number which is adjusted for the relatively small number of underpayments that resulted from the spreadsheet error.

Sherwood confirmed there had been a similar billing issue in 2017. “This is a very complicated process for us as compared to cities (many which charge sewer fees partially based on volume). Most cities have utility billing for their retail water billing and sanitation billing. Sonoma Water is a wholesale water provider and must rely on receiving water data files from the City of Sonoma and the Valley of the Moon Water District.”

Sherwood explained that the source of both the 2020 and 2017 errors were in Excel spreadsheet incorporation of the data.

“To avoid this issue in the future, we will use a database to house the water use records and customer data, which will be programmed to print the data in the format required for the property tax roll so that no Excel spreadsheets will be involved,” said Sherwood.

“As soon as billing errors have been identified, Sonoma Water has consistently responded expeditiously to audit and correct all customer billing,” he added.

But Pace wasn’t fully convinced the problem had been taken care of, and suspected that more than 3,000 people had been affected.

“This is the third time in seven years this has happened,” said the frustrated Sonoman. “I think the Water Agency or somebody has to do an audit of the whole system — they’re going to have to go back several years, apparently.”

NOTE: An earlier version of this article incorrectly referred to the Sonoma County Tax Assessor. There is no such office.

Contact Christian at christian.kallen@sonomanews.com.