Gainesville officials have called for a study that ensures residents of municipalities are not paying twice for local government services.

And it is possible that other cities in Hall County will join in on the effort.

Gainesville City Manager Kip Padgett asked the City Council last week if he could begin talking to city leaders throughout the county about sharing the costs of a tax equity study.

The study would analyze what county taxes are charged to residents of cities for services the cities already provide — and levy tax against their residents to do so.

Specifically in question are the taxes that city residents pay to the county government for road maintenance, engineering and planning services, said Gainesville’s administrative services director, Melody Marlowe. All are services that Gainesville provides to its residents.

Padgett said previous agreements with the county have called for a tax equity study.

“We have yet to receive that,” Padgett said last week. “... I would like to suggest that I talk with some of the other city managers in other municipalities and see if we can’t go in and share the costs to do our own tax equity study and investigate that so we can know ... what our citizens pay and what they’re being provided as far as county services.”

A 2006 agreement between Gainesville and Hall County — the same one that dedicated the county’s water system to the city — calls for each to conduct studies that ensure residents are paying fair tax and water rates.

The agreement, signed by most of the current members of the two bodies, calls for the city to study how water rates should be calculated for city and out-of-city residents.

It also calls for the county to evaluate what property taxes Gainesville residents pay to the county for services the city provides.

Currently, customers of Gainesville’s water system who live outside the city limits pay twice what residents in the city pay for water.

The city conducted its most recent water rate differential study in 2008. The study, performed by an independent consultant based in North Carolina, concluded that county residents’ water rates should be 2.13 times the rate city residents pay.

A previous study called for county residents’ rates to be 2.56 times city residents’ rates. The Gainesville City Council has kept the number at two, said Gainesville Public Utilities Director Kelly Randall.

But city officials say the county never held up its end of the bargain to conduct a tax equity study.

The county helped fund a tax equity study in 2004 in accordance with House Bill 489, which bars local governments from duplicating services, said Assistant County Administrator Phil Sutton. Another study has not been performed.

“I have not been told why the (county) wouldn’t do it,” said Gainesville Mayor Pro Tem Danny Dunagan. “They just never do it ... it’s just what they do best. They don’t honor their agreements.”

As for the 2006 agreement’s call for another tax equity study, “they slipped that in there. It doesn’t make any sense,” Sutton said.

For different reasons, the county has plans to scrap the 2006 agreement. County officials two months ago offered a replacement agreement for Gainesville officials to sign.

The proposed agreement makes no mention of the tax equity study and calls for the city to hand back over the property rights to the Cedar Creek reservoir to the county. The reservoir was an asset the city acquired in the 2006 agreement.

The city has declined to sign the new agreement.

Sutton said the only reason the county would perform a tax equity study would be to comply with House Bill 489, which would be every 10 years with the census.

He said the county uses the parameters laid out in the 2004 tax equity study each year to make payments to municipalities in the county.

The annual check is usually in the $200,000 to $300,000 range for Gainesville, Sutton said.

The check the city received for tax equity in 2009 totaled $243,000, Marlowe said.

“Each year we do that,” Sutton said. “The parameters don’t change, so why would we spend tens of thousands of dollars jointly or separately to do a tax equity study when we just did it in 2004. Those things, they just don’t change that much.”

But Oakwood City Manager Stan Brown said city officials there feel “lukewarm” about the results of the 2004 study. Though he has not discussed sharing the cost of a tax equity study with Gainesville, Brown said Oakwood would likely be interested in joining Gainesville.

“We’re very much in the preliminary discussions, but certainly it’s something that would be well-worth whatever the cost,” Brown said.

“I think all cities feel like there are certain services that they’re being doubly taxed for, so I think it’s something that’s worth looking at.”

Brown said Oakwood officials feel like they should have received more recognition for the city’s police department in the 2004 study.

“I’d like to see at least a fresh look at it,” Brown said. “... I think it would be wise to go ahead and do it while we have a little bit of time to work on it.”

Flowery Branch officials will have to consider the costs of a new tax equity study, City Manager Bill Andrew said. While he said Padgett had not formally asked Flowery Branch to share in the cost of such a study, Andrew said he had heard talk of a study over the last several months.

“Certainly, Flowery Branch is interested in people paying their fair share of taxes for services provided,” Andrew said.