A routine audit of Santa Rosa property tax revenues recently revealed that a clerical error caused the county tax collector to shortchange the city's redevelopment agency by $600,000 over the past four years.
The error was discovered late last year by a Fresno-based company called MuniServices, which helps the city double check that it is getting all the tax revenue it deserves from the county.
The company works on a contingency basis, getting 25 percent of whatever it recovers for the city, which is normally very little.
But last year the contractor hit paydirt when it uncovered a significant error in the tax rolls relating to a downtown hotel.
"This is probably the biggest one that's ever popped up," Bruce McConnell, outgoing interim chief financial officer, told the city's redevelopment agency board Monday.
The $600,000 discovery will result in about a $157,000 finder's fee for the company this year, plus another $37,000 for each of the next two years, for a total payout of $231,000, according to city staff.
The rates are typical for the industry, McConnell said.
The company found the county had not updated the tax code for the Courtyard by Marriott Hotel in Railroad Square to reflect that it had become part of the sprawling Gateways redevelopment district in 2006.
The county acknowledged the error, fixed it and restored the money to the city's redevelopment agency in January, said Pam Johnson, assistant tax collector.
"Basically, it was missed and so it wasn't included in the calculations," Johnson said.