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Douglas County Treasurer makes incorrect payments to cities and school districts

Millions of dollars were under or overpaid
Posted at 7:15 PM, May 24, 2022
and last updated 2022-05-24 20:15:37-04

OMAHA, Neb. (KMTV) — A recent audit by the state revealed that, for years, the Douglas County Treasurer's Office miscalculated millions of disbursements to certain school districts and cities.

Douglas County Treasurer John Ewing says this is a mistake that's been happening for 61 years. The treasurer's office gets money annually from OPPD, in lieu of taxes. The distribution of that money is where the mistakes were made.

Omaha Public Schools, the City of Omaha and Douglas County combined were overpaid more than $12 million in 2021 alone. Just last year, Elkhorn, Ralston and Millard Public Schools were underpaid more than $9 million and Westside School District lost out on more than $3 million.

"This was not an intentional error on our part. This was simply a mistake in interpreting the state statute," Ewing said.

What was the mistake?

Ewing says they believed the money should be proportionally distributed.

"If you look at the number of students in OPS, they have approximately 55,000 students in the City of Omaha. What we did was proportion the income based on the number of students that each of the school districts had," Ewing said.

How could this have slipped through the cracks?

Jon Cannon with the Nebraska Association of County Officials says there are various ways of calculating how the money can be distributed in a large and complex area like Douglas County.

"You're only as good as your software or your formulas. If there's something off in the formula, something is not going to get shuffled over the right way," Cannon said.

Why did this happen for so long?

"We didn't see where the formula didn't make sense and then, also, as we reviewed this, we know in 1994 there was an attempt by the Legislature to make it proportional. So we had the interpretation for 61 years that it should be proportional," Ewing said.

So what is the right formula?

Ewing says it should be based on the levee of each of these entities.

Last year, Sarpy County also miscalculated OPPD payments, which resulted in overpayments to some districts and underpayments to others. Ewing said that prompted his office to take a look at his procedures before the state auditor confirmed their suspicion.

Where do we go from here?

"We can stand to have a bit more clarity in how our laws are applied to this really narrow area of property tax law, the payment in lieu of tax," Cannon said.

Ewing doesn't know how long it will take to correct this issue and is meeting with all the school districts.

3 News Now reached out to all the school districts for a response.

Ralston Public Schools
Ralston Public Schools appreciates being able to meet with the Douglas County Treasurer’s Office this afternoon to discuss the audit findings.  RPS officials will review the information the county provided us and continue to communicate with the county to determine the next steps in the process.  It is important to us to make sure taxpayer dollars are distributed appropriately to support our students, staff, and community.

Elkhorn Public Schools

Elkhorn Public Schools is concerned about this substantial loss of revenue. Our Board of Education will review the audit findings and determine next steps to remediate the matter. We appreciate the Douglas County Assessor for meeting on short notice this afternoon given the recent announcement of the findings and for understanding the importance of this miscalculation and its impact on the Elkhorn Public Schools.

Westside Community Schools
We were made aware of these findings recently by Douglas County and we appreciate their transparency. We are now working to determine our next steps to ensure taxpayer dollars are distributed appropriately to support our students, staff, and patrons.
Westside Community Schools

City of Omaha
"The City of Omaha was just recently made aware of the alleged overpayment of the OPPD in lieu. Annually, the city manages its budget to produce a small surplus and will use this to manage this reduction in revenue. No discussion about paying back anything has yet occurred. We will review these developments in light of the recent re-interpretation of this law, our assessment of its legal accuracy, our understanding of the original intent of this law and the role that 60 years of precedence plays." - Steve Curtiss, City of Omaha Finance Director

Omaha Public Schools
“We welcome the efforts of the Auditor to ensure that, going forward, all political subdivisions are paid correctly. We will review the Auditor’s findings and continue to work with Douglas County to see what the next steps are.”

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