SOUTH PALM BEACH — An audit of South Palm Beach's financial operations will result in the town crediting residents with more than $450,000 in sewer fees.

The Palm Beach County Inspector General's review determined that South Palm Beach did not adequately inform residents in 2017 and 2018 of increases in the sewer rate as required by state law and over-billed customers by around $170,000. Town Manager Robert Kellogg said the findings prompted the town's own review that showed sewer customers had not been properly notified of higher bills in 2019 and 2020, creating an additional $285,000 in overcharges. "Although it’s not specifically cited on the [inspector general's] report, we thought the right thing to do was to refund that money to the residents as well," Kellogg said. “In the future, we will make sure we comply with that formal notice that is required.” The refunds will come in the form of credits, not cash. The plan must still be approved by the town council at its next meeting on April 13.

Remittances to owners of single-family homes, townhouses or condos with dedicated sewer connections will range from less than $25 to around $500.

Kellogg said the council publicly addressed increases to the sewer rate during past annual discussions on the town budget.

But that doesn't meet what is required by Florida Statue Chapter 180, Section 136 which states that "before a local government water or sewer utility increases any rate, charge, or fee..." customers must be notified through their utility bill.

South Palm Beach, with a population of around 1,300 people, did not do that.

Kellogg, town manager since December 2018, said that the practice probably goes back to 2006.

A large percentage of the refunds, Kellogg said, will be going to the homeowners association of the various condominiums that take up most of the town's .35 square miles.

The Barclay, a condominium with 208 residences, will get $48,466.36 in sewer credits.

Kellogg said the town has not informed residents of the credits. They will appear on bills arriving in April and October. Most residents will "pay very little" on either cycle, he said.

"I think everybody is going to be tickled to death that they’re getting some kind of stimulus check back… with this credit," Kellogg said.

The giveback means the town will collect only 15 percent of expected revenue from sewer bills this year, but Kellogg said the town was most concerned about being "transparent."

Recommendations made in the inspector general's report to "assist [South Palm Beach] in strengthening internal controls and enhance compliance" with regulatory requirements are being implemented, according to the inspector general's office.