City council votes to return $7 million in uncashed fire fee checks to general fund

Judge Robert Hodges listens to a citizen speak during the $80 million City of Ocala Fire Fee lawsuit hearing at the Marion County Judicial Center in Ocala, Fla. on Tuesday, May 10, 2022. About 100 concerned citizens packed courtroom 1 for the final hearing of the lawsuit at the courthouse. [Bruce Ackerman/Ocala Gazette] 2022.

The Ocala City Council has decided to return to the city’s general fund roughly $7 million in uncashed refund checks, money that was supposed to go to Ocala Utility customers who for years had been subjected to illegal fire service fees.

The vote was not included on the agenda for the council’s May 21 meeting but came up during the city attorney’s report. The council voted to return the money to the city, with the promise that the funds be used for the city’s fire service.

According to a May 2022 court order, refund checks totaling almost $80 million in illegal taxes collected by Ocala for many years needed to be cashed by April 30, 2024 or the funds would stay with the city. As previously reported by the “Gazette,’’ city records show as of December 2023, almost 18,000 people had not cashed refund checks totaling more than $7 million.

At the May 21 meeting, City Attorney William Sexton, along with the rest of city staff, encouraged the council to let the money left over from uncashed refund checks revert back to the city.

Councilmember Jim Hilty asked about the city’s representation that they had tried their best to deliver refunds. Sexton said he would tell the judge that city staff tried their best to make sure the mail returned undeliverable was checked for alternative addresses, but that the city had otherwise complied with the order.

Derek Schroth, the attorney in the class action attorney, has asked the court to grant an extension of time for people to obtain reissued checks. An evidentiary hearing of his motion for an extension has been set for Aug. 27 at 9 a.m. before Circuit Court Judge William Hodges.

Sexton told the council that the city has a higher rate of success delivering refunds than is the case with most class action suits. That was due, he added, to the refund efforts being well-publicized and because a private investigator was involved in contacting people who were due refunds.

As previously reported by the “Gazette,” over the last six months, numerous concerns have been raised about the city’s lack of follow-up notice to people and organizations owed tens of thousands, utility customers who the city said had been sent checks but didn’t cash them.

Each time the “Gazette” would reach out to account holders on the list obtained through public records request, which included utility accounts from the Marion County Sheriff’s Office, nonprofits including Meadowbrook Church and local small businesses said they either had no record of receiving a check or their claim for a refund had been pending for months.

These account holders filed claims with Ocala after being told by the “Gazette” that their names were on the city’s list of uncashed checks and that the city believes it has no duty to notify them again before the time period for cashing the checks lapsed.

However, when the “Gazette” checked with the city about the status of these claims, Sexton said there were no pending claims. The city at this time had taken over the refund process from The Notice Company, a private company Ocala had hired to handle the notification of customers.

Attached to Schroth’s motion for an extension is a Jan. 24 letter from The Notice Company to Ocala explaining that despite getting the bulk of the refunds being issued, challenges remained, primarily related to faulty data from the city.

“The City’s data has proved to be a greater challenge than anticipated, resulting in a tremendous number of checks being returned as undeliverable and creating the need to process a vast number of claim forms submitted by customers, or their successors, who did not receive their checks as originally mailed. TNC has proceeded with the claims process constrained by the City’s requirement that claims be submitted in writing, utilizing a printed claim form, rather than utilizing an online claim form as TNC initially recommended. Adding to the challenge is the fact that claim forms, when submitted, did not include Customer Ids, so claims could not be directly validated or connected to refund amounts,” the letter read.

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Digital extra: On June 3, the city provided the “Gazette” an updated list reflecting uncashed checks, which can be viewed here:uncashed fire fee checks May 2024