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Bell to repay $2.9 million in property tax overcharges [Updated]

August 13, 2010 |  2:46 pm

The city of Bell will pay back $2.9 million in property tax overcharges uncovered by auditors from the state controller's office and take immediate steps to lower property taxes to the legally allowable rate, interim City Administrator Pedro Carrillo said Friday.

The discovery was made Thursday night, Carrillo said, and city officials have been searching through records to find out if and when the City Council approved the tax hike, and if the previous city attorney provided a legal opinion supporting it.

"That is the million-dollar question for all of our investigations," Carrillo said. "On everything, we are asking, 'Who did it, why they did it and who authorized it?' "

Interim City Atty. Jamie Casso said questions of whether any city officials committed criminal wrongdoing will be handled by the Los Angeles County district attorney's office. State Atty. Gen. Jerry Brown is handling the civil investigation.

"I didn't know what to expect, but what we are finding is shocking," Casso said.

The city plans to repay the money from its $5-million reserve fund, though it is unclear what effect it will have on Bell's budget, Carrillo said. According to the state tax code, the nearly $3 million overpaid must be directed to local schools.

The City Council is expected Monday to vote on a resolution that will lower Bell's tax rate to the legal limit.

State Controller John Chiang sent a letter Friday to the Los Angeles County auditor concluding that some of the property tax levies exceed the amount allowable under the law. He examined an increase in the level of taxes being assessed to pay Bell's pension obligations in 2007.

Bell residents pay the second-highest tax rate of any city in Los Angeles County.

[Corrected at 5 p.m.: An earlier version of this post incorrectly stated that Atty. Gen. Jerry Brown was handling the criminal investigation. Brown is coordinating with the Los Angeles County district attorney's office, which will handle the criminal case.]

-- Jeff Gottlieb and Ruben Vives