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Hall says it won’t pay Gainesville any more tax revenue

County says city has gotten all it’s entitled to from ’08 agreement

POSTED: January 30, 2013 11:27 p.m.

Hall County has said no to the city of Gainesville on more special purpose tax revenue.

In a 2008 intergovernmental agreement, Hall County agreed to speed up the city’s share of the special purpose local option sales tax to help Gainesville on its bond payments for the $20.4 million public safety complex off Queen City Parkway that opened in 2010. The county said in a letter earlier this month to the city that unless SPLOST collections significantly increase, the city has gotten what it was entitled to.

The Gainesville City Council is reviewing its position on the issue, City Manager Kip Padgett said in an email.

“We’ve provided a letter to the city on the county’s position, based on the legal opinion of the county attorney,” said Randy Knighton, Hall County administrator.

In a memo dated Jan. 16, County Attorney Bill Blalock said it was “obvious” that Gainesville has “collected or substantially collected” the percentage of special purpose local option sales tax revenue spelled out in the agreement. Hall County would give $7.125 million a year to Gainesville in monthly installments of $593,750. The payouts would continue for four years, with the city receiving 14.79 percent “of total SPLOST collections,” the agreement said. The deal was signed by then-mayor and current Councilwoman Myrtle Figueras.

“Since the city has presently received what is estimated to be its total SPLOST proceeds, there will be no basis for continued SPLOST payments during the next thirty-two months remaining in the SPLOST VI collection period,” Blalock wrote.

SPLOST VI started in July 2009 and runs until June 2015. The penny tax is being collected for capital projects and the county split the revenue with the surrounding cities. The original revenue estimate was $240 million, but that was revised downward to a projection of $162 million. Melody Marlowe, Gainesville administrative services director, said the city has collected about $23.15 million in SPLOST VI revenue, which is about 14.29 percent of $162 million. If the estimate had stayed at $240 million, the city would have been owed about $35.5 million.

“We’re evaluating it (the county’s letter) to see if we’re entitled to more SPLOST revenue or not,” Mayor Pro Tem George Wangemann said.

Gainesville Mayor Danny Dunagan said the complex was completed under budget in the expected timeframe and was expected to be paid off in four years, The Times reported in June 2011. Wangemann said the city still owes about $6 million on the building, but the city’s been frugal and could pay the rest itself. He said the city and county elected officials and staff are working together well now, and he wants to see things work out right.

“That’s the point,” he said. “That it works out right.”

Blalock’s memo to Knighton said that nothing in the agreement obligates the county to pay the city more, even if the city reimburses it when the tax collection ends in two years. It would be “illegal” under the law and would violate the other agreements between the county and the cities. It could also be seen as a loan, which would also be illegal, the memo said.


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