Pacific Gas & Electric Company underpaid the City of Santa Rosa nearly $68,000 last year by failing to collect taxes from some customers' accounts and improperly collecting them from others.
The glitch, discovered after the utility rolled out a billing system upgrade, has taken more than a year and a half to sort out, with a settlement deal heading to the City Council Tuesday.
How long the problem has persisted is a mystery, but PG&E now thinks it's got everything straightened out.
"We believe at this point that our records are 100 percent accurate," said Brittany McKannay, spokeswoman for PG&E.
The huge utility company has about 73,000 customers in the city. Last year Santa Rosa collected $8.9 million from the tax, which has been in place since 1970 and is also paid by cable and non-cellular telephone customers.
The issue arose in January of 2011 when PG&E advised Santa Rosa finance officials that it had switched to a new high-tech system for identifying customers by their taxing district.
PG&E customers who live inside Santa Rosa city limits are supposed to pay a utility-users tax equal to 5 percent of their monthly bill. The company collects the money and turns it over to the city once a month.
Those who live outside the city, including in the dozens of county islands within city boundaries, are not supposed to pay anything.
But the utility says its new geographic information system identified hundreds of accounts — residential and commercial — that weren't being charged the tax but should have been, and hundreds more that were being charged but shouldn't have been.
The properties are spread throughout the city, including along the borders, in areas where property was annexed into the city, and near county islands, said Manny Silverio, supervisor of city revenue operations.