The city of Galt will receive $144,000 after the California Supreme Court ordered Sacramento County to pay its cities money it improperly withheld.
Counties collect property tax revenue and then distribute shares to cities and schools after taking out administrative fees for doing so.
But in an unanimous decision handed down Monday, the state's top court decided Sacramento County, like others in California, improperly charged administrative fees on education money that is exempt from such fees under state law.
Now they must pay up. Statewide, the ruling means a difference of about $40 million a year for cities, according to the League of California Cities.
"That's good for us," City Manager Jason Behrmann said. "I feel good about it. I'm glad it worked out."
Galt had been waiting for the ruling, and on Monday will formally be seeking a refund from the county, according to Behrmann.
He said Sacramento County has held the cities' money in an escrow account. In Galt, it will go into the general fund to be used for public safety, community development and administration personnel costs.
Last year, several cities opted to settle with Sacramento County and split the amounts being challenged. Folsom, for example, split its $700,000 in question, Behrmann said. They won't be getting the full fees back retroactively.
Galt, instead, decided to file a lawsuit against Sacramento County to collect all of its administrative fees dating back to 2006.
"We felt it was not the right thing to do," Behrmann said of the county's proposed settlement. "We didn't want to give the county money that wasn't theirs."
It is not clear whether Lodi was part of the Supreme Court lawsuit, but its property tax administrative fees would likely be two to three times the amount of Galt's, according to Behrmann.
The ruling will put an additional $30,000 annually back into Galt coffers since Sacramento County can no longer collect the fee in question.
Contact reporter Jennifer Bonnett at email@example.com.