The city's redevelopment agency is being asked to repay $1.68 million in property taxes that it received in error from the county over the last seven years.
The mistake came to light when city officials last month approved a new agency debt issue that would be paid off by the property tax money.
"Some mistakes were made," said Steve Cervantes, community development director. "I think the city and the county agree we are both at fault."
City officials said they estimate the overpayment to be $1.58 million. Cervantes has recommended the city place $1.7 million in an escrow account until the dispute over the exact amount is resolved.
He said the city would like to repay the money over a number of years to lessen the burden on the agency.
The error comes on the heels of the discovery by the city that it improperly spent $556,000 from an account that can only be used for street work, and had incorrectly billed 3,000 properties outside of the city for a city park assessment.