The first court date for Gainesville’s lawsuit with Hall County over tax distribution is Monday, and both sides have asked the judge to rule for their side.
The city filed a lawsuit in February accusing the county of breaching a 2008 intergovernmental agreement that spelled out how special purpose local option sales tax was going to be distributed to the cities in the county.
Gainesville court documents in April said the county owed it about $5.5 million, including interest and attorney fees.
City Attorney Bubba Palmour declined to comment on the hearing.
In 2008, Gainesville asked the county to accelerate payments of SPLOST VI revenues to pay for a $20.4 million public safety complex on Queen City Parkway.
The hearing is at 10 a.m. Monday at the Hall County Courthouse in Gainesville. Judge Frank Mills, a retired Supreme Court judge from Cherokee County, is hearing the case because all of the county’s judges have recused themselves.
The city has asked for the court to rule in its favor as a summary judgment. Gainesville has said it is owed 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 accounting change and the city didn’t object. The city also asked the court to order the county to continue the payments.
Hall County has asked in court documents that the judge rule in its favor because Gainesville was only entitled to 14.79 percent of collections.
SPLOST VI started in 2009 and runs until July 2015. It was originally supposed to bring in $240 million in revenue, but is expected to only collect $152 million because of the economic downturn.
Gainesville’s April court filing said the county agreed to speeded-up payments to get the city to agree to extend the collection period from five years to six years. 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.
Hall County has said Gainesville owes the county more than $185,000 because the city has already received the amount it was entitled to under the agreement. The 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.
“Both sides have filed motions and we hope for a successful outcome,” County Attorney Bill Blalock said.
Hall County stopped Gainesville’s payments in October, the court said.