The south suburban city has acknowledged the error and offered to repay the money over five years, according to a lawsuit filed Tuesday, but Pappas has demanded full payment.
Country Club Hills officials apparently have ignored the demand and, in April, approved a partial rebate to property owners.
The lawsuit, filed in Cook County Circuit Court by State's Attorney Anita Alvarez, names Country Club Hills, Mayor Dwight Welch and city Treasurer Rhonda Williams as defendants. Welch and Williams could not be reached for comment Wednesday.
The lawsuit stems from the property taxes Country Club Hills residents paid last year. The county treasurer collects the taxes and then distributes the money to municipalities, school districts and other taxing agencies. According to the lawsuit, when county officials learned that Country Club Hills had received nearly $6.6 million in revenues it did not deserve, Pappas' office notified city officials and demanded repayment.
When Pappas received no response, she notified the city again in April and demanded repayment within 30 days. Lawyers for the treasurer's office then met with representatives from Country Club Hills, and in correspondence in May, the city acknowledged it received too much money.
Country Club Hills officials have said they took out a loan in late 2010 based on incoming 2011 taxes. But when the county went to transfer the $6.6 million in taxes to the city, the treasurer apparently paid the bank holding the loan and the city, they said.
City officials argued that it was the bank that was paid twice, not the city, so the county should go after the bank. They have noted that the county continues to transfer property tax money to the city.
