Real estate firm reimburses state $68,000 after overcharging the Department of Corrections for years

MADISON - A Madison landlord overcharged the state $68,000 for utilities over nine years but rectified the situation after a whistleblower raised the issue with state auditors.

MIG Commercial Real Estate reimbursed taxpayers on Tuesday, Department of Corrections spokeswoman Clare Hendricks said. The firm was not required to pay interest or penalties because the overbilling was determined to have been a mistake, not an intentional act, she said.

Starting in July 2010, the Department of Corrections began paying for electricity it didn’t use at its headquarters on Madison’s east side. The state was billed for all utilities, including for electricity used by two cell towers on top of the building.

Department of Corrections officials were not aware they were being charged for the electricity used by the cell towers until someone contacted the Legislative Audit Bureau about the issue, Hendricks said. The department sought documents from MIG and determined it was owed reimbursement.

Hendricks described MIG as “responsive and transparent.”

“Since this situation was rectified quickly and MIG stated they have sent us payment, the DOC felt it inappropriate to charge interest at this time," Hendricks said by email.

Bradley Hutter, MIG's president and CEO, said the lease did not spell out how to handle utilities for the cell towers and MIG failed to give the state credit for their use of electricity. The company promptly issued a reimbursement when it learned of the issue, he said.

"It was an administrative oversight," he said.

The state renewed its lease with MIG for the Department of Corrections headquarters in July.

Contact Patrick Marley at patrick.marley@jrn.com. Follow him on Twitter at @patrickdmarley.