Unclaimed $213,000 awaits Arkansas cities, agencies

A graph showing forgotten funds.
A graph showing forgotten funds.

Cities across the United States and in Arkansas own hundreds of thousands of dollars in forgotten money catalogued by auditors in the state.

An Arkansas Democrat-Gazette analysis of data provided by state Auditor Andrea Lea's office found that cities, fire departments and police departments have well over $213,000 in unclaimed funds sitting in state coffers. There are at least 214 accounts with $100 or more in them, according to the analysis. Of the total amount, more than $180,000 is owed to cities alone.

For the most part, the money becomes unclaimed when a person or business owes money to the government and attempts to pay it, but the money gets lost between the two parties, like when the government doesn't cash a rebate check from the electric company. The money in limbo eventually flows to the state. It's Lea's job to return the cash.

Claims are starting to come in. Lea took the stage at the Arkansas Municipal League last month and started naming individual cities.

Lea said that's standard procedure. When she speaks to smaller groups, she said, staff will run sign-in sheets through the state's database to call out the names of entities that are owed money.

"The money is theirs," she said. "It's our job to figure out how to get it back to them."

Little Rock, the No. 2 city on the list, had more than $28,000 across 16 funds in January, according to the analysis. Scott Massanelli, treasury manager for Little Rock, said Friday that the city has reclaimed $6,232, finalized paperwork for another $16,293 and is in discussions with the auditor's office about additional claims.

Little Rock has about a $200 million general-fund budget, Massanelli said.

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After a reporter called Ponca City, Okla. -- which had the largest amount of unclaimed money -- the city was able to cash a single long-lost claim for $30,000.

Marc LaBossiere, finance director of the city, said the claim dated back about a decade and appeared to be tied to an anomaly with a bid bond for the $25 million construction of the Ponca City Aquatic and Family Center.

With a struggling oil economy, the city plans to use the $30,000 to help cushion its general-fund budget of about $100 million.

"It's not earth-shaking," LaBossiere said. "But on the other hand, it was a very material item."

Part of the challenge for the auditor's office is a sometimes limited amount of information available to and provided by banks. Skot Covert, a spokesman for Lea, said Arvest Bank provided only the name and source of the funds -- but not the state -- for the Ponca City funds.

The city of Gritter, which state data show is owed $9,927, may not exist. It doesn't appear on a list of U.S. Census Bureau cities.

"Bank of America escheated this to us in 2012. It was originally a cashier's check. They did not attach any other identifying information to the report," Covert said.

"My suspicion is that because banks do not typically require information other than the name for cashier's check, they simply didn't have anything else to report to us."

He speculated that the name on the check was spelled incorrectly.

Cities make up a small share of the $280 million in unclaimed cash in Arkansas, Lea said, but the more than $180,000 owed to cities is still significant for taxpayers in those areas.

Likewise, police and fire departments, which have more than $15,000 and $18,000 in unclaimed funds, respectively, could use that money to buy needed equipment, Lea said.

The auditor's staff reviews unclaimed funds for the 75 counties annually, so there isn't much of a backlog there, Lea said.

The money gets lost for a variety of reasons.

In cities, service providers -- like electric companies -- tend to be the source of unclaimed money, Lea said.

For example, a rebate check that is never cashed would eventually become unclaimed property.

Car insurance companies -- particularly Progressive affiliates -- are the principal source of unclaimed funds for police departments.

For fire departments, Galls LLC, an equipment seller, is a major source of forgotten funds.

Some money holders aren't doing their due diligence to get the money returned, Lea said.

"They are to contact the person 120 to 60 days before they report it to us," she said. "As soon as they presume it's abandoned, they are supposed to contact the person."

In Arkansas, unclaimed money eventually becomes part of the unclaimed-property trust fund, which pays into the state's general fund.

But even if the money is used to build a road, an owner or his heirs can still claim the money, and the state would have to pay it back.

LaBossiere of Ponca City said the $30,000 Arkansas find prompted his office to check unclaimed property listings in all 50 states. The office found less than $200 in Oklahoma, but the search took less than a day.

"We do business here and there. ... People who live here sometimes move out of state," he said. "I would strongly recommend that all municipalities check the unclaimed property of their state and those adjoining states."

The state's database for unclaimed money can be found at www.claimitar.com.

Metro on 02/26/2017

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