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Why Don't We Claim That Cash?

— Given the financial straits the City of San Diego has been in of late, you'd think officials would make it a priority to collect every dime that the City's owed. But a look at the state controller's database of "unclaimed properties" shows over $10,000 that belongs to the City.

These unclaimed properties are not real estate. Though the State holds unclaimed stocks, and even jewelry and rare coins, in the City's case, it's all chunks of cash, as low as $58 and as high as $933, that businesses and government entities attempted but failed to pay to the City. "We end up with the money," says Russ Lopez, director of communications for the state controller's office, "because by federal statute, every financial institution, whether it be a brokerage firm, a mortgage firm, or a utility, after a certain amount of time is required by federal law to turn over to the state any unclaimed money that they owe."

The chunks of cash belonging to the City, 50 in all as of November 9, aren't overpaid utility bills. Many are classified as vendor payments. "A vendor payment would be, the city, the state, and every county, they have vendors who do work for them, whether it be window washing, the cafeteria, or anything else. Say the city has contracts with a vendor, which is a private business, and the city pays the vendor in advance but the bill turns out to be less than was expected -- say the city wrote a check for $10,000, but the work was only $9500, then the vendor tried to return the $500. It's up to the vendor to return that money. But maybe they had the wrong address. Or maybe they didn't have an address. Or maybe they wrote it out to the 'City of San Diego' and didn't specify the department. And you know how bureaucracy is, you have to send it to the controller or the treasurer or whichever department, or the check doesn't get cashed. For tax reasons, the vendor can't really absorb that money on their own books."

So the vendor sends the money to the state controller's office, which acts, Lopez says, as "a repository for that money. We're not a bank. We don't do interest at this point, even though Controller Steve Westly did sponsor a bill to let some of that money gain interest."

The bill, SB 1752, died in a state senate committee in May 2006. Not only would it have allowed the $4.8 billion in the state controller's hands to gain 5 percent interest for its owners, it would have loosened restrictions on the controller's ability to contact the claimants on the 7.8 million accounts in the database. "As it is," Lopez says, "we are not allowed to call the City of San Diego or Mr. and Mrs. Garcia in San Diego to let them know that they have unclaimed property. But even if the restrictions were lifted, we have nearly 8 million accounts. We can't call 8 million people."

In lieu of calling, Controller Westly toured the state from October 2005 through February 2006 to promote the unclaimed properties database. At stops around the state -- including one in Little Italy on February 6, 2006 -- he told Californians to claim their money on searchthevault.com or encuentresudinero.com, the Spanish version. "The reason we did searchthevault.com is it's very easy to remember," Lopez explains. "I can say, go to searchthevault.com, rather than s-c-o, backslash, forward slash, dot, whatever it is." (When you type searchthevault.com into your browser, you end up at www.sco.ca.gov/col/ucp/index.shtml.)

The reason the legislature rejected the bill may be because they've become accustomed to having a $4.8 billion fund to borrow from. "Legislators use some of that money," Lopez says. "It has nothing to do with the controller. It's all state business, and it's out of our hands. But they have to pay it back. It's not theirs; it's the property of Californians, whether it be businesses or individuals. So anytime anyone claims property, we have to give it back."

Around 65 percent of the unclaimed monies belonging to the City are associated with real estate transactions. One of the last items on the list is $70 from Commerce Title Company. California Title Company, a local company with an office in Mission Valley, tried to refund $519.68 to the City of San Diego, judging from the datebase entry. The controller's website doesn't say when California Title attempted to make the payment, but it does give the "reported address" to which the company sent the refund: 715 Harris, which is a house in a residential neighborhood in Otay Mesa owned, according to county assessor's records, by Gerardo Alonso. It's clearly not the City of San Diego's official address. "Why somebody couldn't get the correct address for the City of San Diego, I don't know," Lopez says.

The largest amount on the list owed the City (as of November 11, 2006) is a "vendor payment" of $933 from Target Corporation. The Union-Tribune Publishing Company shows up twice, both times for refunds of $780.80. The states of Texas and Idaho failed in attempts to pay the City $100 and $691, respectively. Other names include Jack in the Box ($280), FedEx Kinko's ($549.90), and Chevron USA ($178).

The city official who claims properties from the state repository, Lopez says, "has to be the individual elected or hired to handle the finances of the entity. For instance, for the State of California, it would be the state controller. In a city or a county, it would be the treasurer, the auditor, whoever it is who deals with the financial matters. They have to legally be able to accept money on behalf of the city."

In the City of San Diego, that man is Michael Vogl, revenue collections manager. He says he's aware of the $10,166. The collections staff, Vogl says, performs an annual review of the unclaimed properties database and similar databases. "They have search criteria that they use to identify everything that might be owed to the City of San Diego. Then they file individual claims. From the [controller's] website, you print out a claim form and fill that out, and generally I sign off on them. We have to sign under penalty of perjury that it is our money. Then we send those to the State. Last year, we sent about $40,000 worth of claims, and to date, we've received about $19,000 from the claims that we submitted last November and December. We are still following up on some of the other ones. I know about three months ago, we were getting a bunch of automated letters from the State saying they had received our claim and it was being processed but they were behind for a variety of reasons."

Lopez says staff and budget limitations as well as aging computer systems keep the State from returning money quickly, but he explains, "When you think about education, transportation, senior care, prescription drugs, who do you think is going to be a priority?"

Because the State returns money slowly, its list may include items for which claims have already been filed. Asked why checks aren't making it into city coffers to begin with, Vogl answers, "From what we've seen, a lot of times it is a bad address. Either a piece of the address was missing or they sent it to a department address that isn't really an address that processes payments, and who knows what happened with the payment. Sometimes you get companies that paid something three years ago to an address for the City, and that is what they have in their database as a payment address for the City. But maybe whatever they are paying now is a different payment address, so that payment doesn't get to where it is supposed to be. Most of the time, there is a process for getting that money into the right hands. But if you send a payment out to the Chollas Landfill, who knows what's going to happen to it."

The City of San Diego isn't alone among local governments in having money on the unclaimed properties list. The County of San Diego has 37 items totaling just under $23,000. The City of Carlsbad has unclaimed properties worth just over $3000.

Among San Diego celebrities, former Charger great Junior Seau has $401.57 waiting for him at the state controller's office. And ex-mayor Susan Golding has yet to claim $172.81 of "pension/retirement" money.

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— Given the financial straits the City of San Diego has been in of late, you'd think officials would make it a priority to collect every dime that the City's owed. But a look at the state controller's database of "unclaimed properties" shows over $10,000 that belongs to the City.

These unclaimed properties are not real estate. Though the State holds unclaimed stocks, and even jewelry and rare coins, in the City's case, it's all chunks of cash, as low as $58 and as high as $933, that businesses and government entities attempted but failed to pay to the City. "We end up with the money," says Russ Lopez, director of communications for the state controller's office, "because by federal statute, every financial institution, whether it be a brokerage firm, a mortgage firm, or a utility, after a certain amount of time is required by federal law to turn over to the state any unclaimed money that they owe."

The chunks of cash belonging to the City, 50 in all as of November 9, aren't overpaid utility bills. Many are classified as vendor payments. "A vendor payment would be, the city, the state, and every county, they have vendors who do work for them, whether it be window washing, the cafeteria, or anything else. Say the city has contracts with a vendor, which is a private business, and the city pays the vendor in advance but the bill turns out to be less than was expected -- say the city wrote a check for $10,000, but the work was only $9500, then the vendor tried to return the $500. It's up to the vendor to return that money. But maybe they had the wrong address. Or maybe they didn't have an address. Or maybe they wrote it out to the 'City of San Diego' and didn't specify the department. And you know how bureaucracy is, you have to send it to the controller or the treasurer or whichever department, or the check doesn't get cashed. For tax reasons, the vendor can't really absorb that money on their own books."

So the vendor sends the money to the state controller's office, which acts, Lopez says, as "a repository for that money. We're not a bank. We don't do interest at this point, even though Controller Steve Westly did sponsor a bill to let some of that money gain interest."

The bill, SB 1752, died in a state senate committee in May 2006. Not only would it have allowed the $4.8 billion in the state controller's hands to gain 5 percent interest for its owners, it would have loosened restrictions on the controller's ability to contact the claimants on the 7.8 million accounts in the database. "As it is," Lopez says, "we are not allowed to call the City of San Diego or Mr. and Mrs. Garcia in San Diego to let them know that they have unclaimed property. But even if the restrictions were lifted, we have nearly 8 million accounts. We can't call 8 million people."

In lieu of calling, Controller Westly toured the state from October 2005 through February 2006 to promote the unclaimed properties database. At stops around the state -- including one in Little Italy on February 6, 2006 -- he told Californians to claim their money on searchthevault.com or encuentresudinero.com, the Spanish version. "The reason we did searchthevault.com is it's very easy to remember," Lopez explains. "I can say, go to searchthevault.com, rather than s-c-o, backslash, forward slash, dot, whatever it is." (When you type searchthevault.com into your browser, you end up at www.sco.ca.gov/col/ucp/index.shtml.)

The reason the legislature rejected the bill may be because they've become accustomed to having a $4.8 billion fund to borrow from. "Legislators use some of that money," Lopez says. "It has nothing to do with the controller. It's all state business, and it's out of our hands. But they have to pay it back. It's not theirs; it's the property of Californians, whether it be businesses or individuals. So anytime anyone claims property, we have to give it back."

Around 65 percent of the unclaimed monies belonging to the City are associated with real estate transactions. One of the last items on the list is $70 from Commerce Title Company. California Title Company, a local company with an office in Mission Valley, tried to refund $519.68 to the City of San Diego, judging from the datebase entry. The controller's website doesn't say when California Title attempted to make the payment, but it does give the "reported address" to which the company sent the refund: 715 Harris, which is a house in a residential neighborhood in Otay Mesa owned, according to county assessor's records, by Gerardo Alonso. It's clearly not the City of San Diego's official address. "Why somebody couldn't get the correct address for the City of San Diego, I don't know," Lopez says.

The largest amount on the list owed the City (as of November 11, 2006) is a "vendor payment" of $933 from Target Corporation. The Union-Tribune Publishing Company shows up twice, both times for refunds of $780.80. The states of Texas and Idaho failed in attempts to pay the City $100 and $691, respectively. Other names include Jack in the Box ($280), FedEx Kinko's ($549.90), and Chevron USA ($178).

The city official who claims properties from the state repository, Lopez says, "has to be the individual elected or hired to handle the finances of the entity. For instance, for the State of California, it would be the state controller. In a city or a county, it would be the treasurer, the auditor, whoever it is who deals with the financial matters. They have to legally be able to accept money on behalf of the city."

In the City of San Diego, that man is Michael Vogl, revenue collections manager. He says he's aware of the $10,166. The collections staff, Vogl says, performs an annual review of the unclaimed properties database and similar databases. "They have search criteria that they use to identify everything that might be owed to the City of San Diego. Then they file individual claims. From the [controller's] website, you print out a claim form and fill that out, and generally I sign off on them. We have to sign under penalty of perjury that it is our money. Then we send those to the State. Last year, we sent about $40,000 worth of claims, and to date, we've received about $19,000 from the claims that we submitted last November and December. We are still following up on some of the other ones. I know about three months ago, we were getting a bunch of automated letters from the State saying they had received our claim and it was being processed but they were behind for a variety of reasons."

Lopez says staff and budget limitations as well as aging computer systems keep the State from returning money quickly, but he explains, "When you think about education, transportation, senior care, prescription drugs, who do you think is going to be a priority?"

Because the State returns money slowly, its list may include items for which claims have already been filed. Asked why checks aren't making it into city coffers to begin with, Vogl answers, "From what we've seen, a lot of times it is a bad address. Either a piece of the address was missing or they sent it to a department address that isn't really an address that processes payments, and who knows what happened with the payment. Sometimes you get companies that paid something three years ago to an address for the City, and that is what they have in their database as a payment address for the City. But maybe whatever they are paying now is a different payment address, so that payment doesn't get to where it is supposed to be. Most of the time, there is a process for getting that money into the right hands. But if you send a payment out to the Chollas Landfill, who knows what's going to happen to it."

The City of San Diego isn't alone among local governments in having money on the unclaimed properties list. The County of San Diego has 37 items totaling just under $23,000. The City of Carlsbad has unclaimed properties worth just over $3000.

Among San Diego celebrities, former Charger great Junior Seau has $401.57 waiting for him at the state controller's office. And ex-mayor Susan Golding has yet to claim $172.81 of "pension/retirement" money.

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