The City of Santa Monica has identified a costly problem — it has received $950,000 in parking citation overpayments and has plans to refund all of it to those to whom it’s owed.

The parking citation overpayments were discovered through a review of Santa Monica’s financial systems, city officials said.

“During a meeting with our processing agent on May 30th, 2006, we became aware of a report of unclaimed overpayments,” said Candace Tysdal, acting chief financial officer for the City of Santa Monica.

“City staff in our revenue division subsequently researched the issue, reported the existence of unclaimed overpayments, and worked with our processing agent to establish a refund program.”

The city plans to launch a “proactive” program starting in October to refund money to parking violators who have overpaid.

A notice of overpayment will be sent to those who overpaid, and once the individuals confirm receipt of the notice, they will be issued a check within 30 days.

The city expects there to be 18,000 notices sent out, Tysdal said.

Officials say overpayments are generally made by people who pay a citation after the due date and, as a result, pay a second time after receiving a “balance due” notice, city staff said.

“People pay twice and don’t know that they’ve paid more than once,” said Mona Miyasato, assistant to the city manager, community relations.

Sometimes a spouse will see a “balance due” notice and pay it without realizing the ticket was already paid, she said.

Also, sometimes the Department of Motor Vehicles (DMV) collects ticket payments when someone is registering a vehicle, as the DMV can place a hold on one’s car registration if a ticket has not cleared as “paid.”

This sometimes happens after the owner has already made a late payment directly to the city, but it has not cleared on state records, Miyasato said.

She also said that when someone pays a ticket “late beyond the deadline, that’s where this confusion occurs.”

The finance department will have an increased workload starting in October, as Santa Monica is not going to add new staff to handle this situation, said Miyasato.

“They’re committed to try to do whatever it takes,” she said.

City staff members estimate that there may be as many as 400 refunds per month, totaling $20,000, which represents approximately two percent of the total citation revenue collected by Santa Monica.

“We are living up to our motto, ‘We Do The Right Thing Right,'” said Lamont Ewell, city manager. “Our staff recently discovered the unclaimed overpayments and quickly created a proactive approach to refund the money.”

“It’s the ethical and right thing to do, so that’s why we’re being proactive about it,” said Miyasato.

This refund program is new, as individuals or businesses that may have overpaid their parking citations over the last three years will be identified and receive a notice, while previously, the city refunded overpayments only after a refund was requested.

ACS, Inc. — the company that manages the city’s parking violations — is working with Santa Monica on the program, Tysdal said.

“ACS will be sending out the letters notifying individuals and businesses that an overpayment may exist,” she said.

Eighty percent of the 18,000 notices will go out to people who don’t live in Santa Monica.

“We don’t know how successful we’ll be in tracking down those people, but we’re going to try,” said Miyasato.

Miyasato noted that the City of Santa Monica is unable to collect about $2 million dollars in parking citations a year because there is no address or a wrong address on file with the license plate numbers on cars that are ticketed.

“There’s people we never can find, can never collect on,” Miyasato said.

Miyasato, Ewell and Tysdal agree that they are handling the situation properly by refunding overpayments. “We are doing the right thing right,” Tysdal said.

Starting in October, people who believe they paid their parking citation more than once will be able to access information about this new program, and how to obtain a verification form, by visiting the Web site at www.smgov.net or calling (800) 214-1526.

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