Nebraska school district sues another for alleged misallocation of millions due to ‘bad math’

One Nebraska school district is suing another in an attempt to expedite recovery of millions of dollars in misallocated property tax funds. 

Auditors discovered that the wrong formula had been utilized in distributing funds from the Omaha Power District to various entities, including Westside Community Schools, Omaha Public Schools, Douglas County, and the City of Omaha. It resulted in several districts being overpaid millions of dollars, while others were underpaid millions – in some cases for decades. 

Westside Superintendent Mike Lucas wrote in a letter posted online that Westside is attempting “to secure $10 million+ of lost revenue that was overpaid to the City of Omaha, Douglas County, and Omaha Public Schools.”

In response to the discovery, Westside is suing neighboring Omaha Public Schools, hoping to “expedite a solution and recover the money due to Westside and improperly paid to OPS over the course of multiple years,” according to the letter. 

“Efforts and amicable inquiries to Omaha Public Schools leadership to resolve this situation have been ignored,” Westside’s attorney Mike Croyle said, according to a WOWT 6 News report. 

In contrast, both the city and the county have been responsive to Westside’s attempts to collect the funds it is owed, with the city of Omaha having set aside $4 million to pay back what is owed. 

Auditors discovered the same faulty formula in use in Sarpy County. The erroneous distribution of funds resulted in the termination of the former Sarpy County Treasurer, Brian Zuger. According to the same report, the “scrutiny revealed that the same mistakes were happening in Douglas County, too, where officials recalculated the way those payments had been determined for the last 60 years.” 

However, Douglas County Treasurer John Ewing says that “his office followed the same protocol that had been used for the previous 61 years,” according to another report. 

Omaha Public Schools has also taken legal action, but against the Sarpy County treasurer. 

Districts underpaid by the Douglas County treasurer as a result of the utilization of the formula also include Elkhorn Public Schools and Ralston Public Schools.