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Gainesville asks for favorable court ruling in SPLOST dispute

POSTED: April 18, 2013 1:16 a.m.

The city of Gainesville calls Hall County’s reading of an agreement about special purpose local option tax revenue “unreasonable” in recently filed Superior Court documents.

Gainesville filed a lawsuit in February, saying the county owed it about $5.3 million in SPLOST revenue and had breached a 2008 intergovernmental agreement between the two. The city responded on April 10 to the county’s motion last month to dismiss the lawsuit.

The city also filed a motion last week asking the court to rule in its favor without a full trial.

Hall County has said it’s the city that owes the county more than $185,000 because the city received the amount it was entitled to under the agreement.

The county’s interpretation of the agreement that Gainesville is only entitled to 14.79 percent of collections would mean that the contract becomes meaningless if the future tax collection isn’t exactly what was projected then, the recent court filing said. The agreement said the city would get 14.79 percent of the total revenue, but it also said the city would get 48 months of accelerated payments, of which it got 39.

Gainesville says the county now owes $5.5 million, including interest and attorney fees. The city also claims a credit of $185,659 against the county for a payment it said the county incorrectly treated as a SPLOST V distribution. The county has said there was a state of Georgia accounting change and the city didn’t object.

Hall County agreed in 2008 to make four years of accelerated SPLOST VI payments to Gainesville of about $7.1 million a year and deduct excess funds in the last two years.

Gainesville’s April court filing said the county agreed to speeded-up payments to get Gainesville to agree to extend the collection period from five years to six years.

SPLOST VI started in 2009 and runs until July 2015. It was originally projected to collect about $240 million, but that was reduced in 2011 to $162 million and was estimated in March to bring in only $157 million. Hall County stopped Gainesville’s payments in October, the court documents said.

County Attorney Bill Blalock said the county has 30 days to respond. Discovery or a hearing could be after that, but that’s currently unclear. There are two motions, and a judge could rule on either or both, he said.

Hall County Superior Court judges have to decide for themselves whether to recuse themselves from hearing the case, City Attorney Bubba Palmour said.

“I’ll take any of our four judges because they make rulings because it’s the right decision,” Palmour said.

The city included in its filing two affidavits from Melody Marlowe, Gainesville administrative services director, and Phil Sutton, former Hall County assistant county administrator. Sutton said both then-Mayor Myrtle Figueras and Tom Oliver, former Hall County Board of Commissioners chairman, signed the letter agreeing to the accelerated payments.

Former Hall County Administrator Charlie Nix told Sutton that the city’s approval for the extra collection year depended on the 48-month accelerated schedule, Sutton’s affidavit said.

His statement also said the agreement was intended as part of the overall SPLOST revenue agreement between all the cities and the county.

Sutton and Nix were fired by some current and former county commissioners in 2011.

At the same time, the Stewart, Melvin and Frost law firm, which includes Blalock, was dropped as the county attorney.

The lawyer and the law firm were reappointed as county attorney about four months later.

Palmour said he was open to settlement discussions, but Blalock said those discussions would be premature.


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