Santa Monica to Refund Those who Paid Twice

By Olin Ericksen
Staff Writer

September 21 -- Think you’re getting fleeced when it comes to parking fines? You may be right. Cities across California, including Santa Monica, may owe tens of millions of dollars in parking citations paid twice over the years by visitors and residents alike.

In the past three years, 18,000 people – nearly 80 percent of them from outside Santa Monica -- paid nearly $1 million too much to Santa Monica for parking violations, City Manager Lamont Ewell revealed at a special press conference held at City Hall Wednesday.

He announced the City’s intentions to return the nearly $950,000 accrued over three years to the rightful owners, but said the problem may not just apply to Santa Monica, which discovered the double payments during an internal review.

“We will do everything we can to identify who has made the overpayments,” said Ewell, who announced the City would launch a program October 1 allowing people can ask for a refund.

Santa Monica, he said, will be “proactive,” though, looking through drivers documents to ensure a refund.

“We actually called other cities to see what they are doing, and different cities are doing things in different ways…but we internally realized this is the right thing to do,” Ewell said.

Across California -- and perhaps the nation -- cities may be gobbling up millions in fees that are not theirs, because many people were paying the same ticket twice after receiving a second notice mailed before payment was received.

“Often it may be a wife or husband may get the ticket and may not tell the other,” said Ewell, citing an example in Santa Monica.

Section 42201.6 (b) of the state vehicle code – which deals with parking penalties – states that “multiple or duplicate deposits of bail or parking penalty shall be identified by the court or agency and refunded within 30 days of identification.”

Identifying people who have paid twice was something neither Santa Monica nor its Dallas-based collection vendor, Applied Computer Services, has been doing with accuracy for many years – an oversight that has consumer advocates seeing red.

“This might be the Canary in the coal mine,” warned Doug Heller, executive director the non-profit Foundation for Consumers and Taxpayers’ Rights. “This may not just be millions, but tens of millions, owed and may end up being a scandal of much larger proportions.”

Part of the reason for the mismanagement may be the use of a third party vendor, he said.

“The problem with outsourcing government is that they are less tethered to the public,” said Heller.

A complicated and prolonged appeals process and lack of access to human operators may also frustrate any person calling the vendor to contest the double payment, he said.

“Even if someone has paid the right amount, the average citizen doesn’t want to risk having to pay even a bigger fine,” he said. “It’s a bureaucratic system designed against citizens getting the right information.”

In Santa Monica, a notice for a typical citation of $47 is received after 21 days. A second notice is then sent and a delinquent penalty is applied, pushing the fine to $97 after 35 days. After 90 days the DMV is assigned to collect the amount, which typically jumps to $121, according to City officials.

Despite the criticism, officials from Applied Computer Services, a multi-national Fortune 500 company that operates 100 call centers around the world, said they are only following orders.

“Whatever the city contract requires, we follow,” said Joel Barett, spokesperson for ACS. “It’s not our program, because the City owns the contract.”

With contracts throughout California and the world, ACS and call support vendors like it, enter into agreements with cities of all shapes and sizes.

Some of the agreements are based on flat fees for service, while others, including Santa Monica and West Hollywood, are based on a complicated formula that offers ACS some incentives to collect twice.

City officials, however, said ACS was not typically paid for the second transaction when someone paid twice.

While it doesn’t often happen, this is not the first time that a City has collected too much money.

Until the end of 2005, San Diego paid out $359,000 to those overcharged between March 1998 to June 2001 as part of a settlement in U.S. District Court, according to news reports. Despite the pay out, nearly $80,000 remains unclaimed.

And the Department of Water and Power in Washington D.C. may have overcharged as much as $17 million between 1980 and 1998, according to reports.

In Las Vegas, a claim of nearly $1 million was paid out in 2002 after the state’s unclaimed property division argued tickets should be considered unclaimed property. Though the City fought the issue, the Nevada Supreme Court ruled in favor of the unclaimed property division.

In Santa Monica, City officials will do everything they can to refund the money, Ewell said.

“The goal for us is, in keeping with the motto we’ve adopted, we are going to do the right thing right,” said Ewell, who assumed the City’s top management post in December of 2005.

Beginning October 1, the City will start sending as many as 400 refunds totaling $20,000 each month, which represents 2 percent of the total citation revenue collected by the City.

In total, the parking ticket profits represent nearly 3 percent of the total revenue for the City, or $8 million of the City’s revenue budget of $236 million, Ewell said.

Since eight of the ten people who paid the fee twice were from out of town, returning the money may be difficult, Ewell said, adding that the City may try and dig through rental car information.

If unsuccessful, the money will be returned to the general fund, he said. “But that won’t be our first option,” he said.

City staffers are working to install policies to make sure the same mistake doesn’t happen again, Ewell said.

The fact that visitors were disproportionately affected could tarnish Santa Monica’s highly touted hospitality industry, Heller said.

“The City has an obligation to treat both residents and visitors fairly,” he said.

While there may be nothing “nefarious,” a full investigation should be launched to ensure that the accounting was an honest oversight, and not government officials looking the other way, Heller said.

“Who knows how long they’ve known about this,” he said. “Not only is the City’s behavior negligent, but their irresponsibility will end up cheating the taxpayers and any legal costs that adds up in any court.”

So how did the City find out about the supposed oversight? A single City employee, Eva Uren, discovered the mistake while revamping the City’s finance department, Ewell said.

Without her, who knows how long Santa Monica may have continued overcharging parking fees.

It remains unclear how widespread the problem -- which could extend to other California and U.S. cities -- could be where the public continues to pay twice for a single parking mistake.

Beginning October 1st, individuals that believe they paid a single parking citation more than once can access the City’s website at www.smgov.net and obtain verification forms. For general information about paying parking citations, individuals can go to the City’s website at or call 1-800-214-1526.