City makes offer to settle dispute with county; letter reached Chattanooga, Tennessee, media before commissioners

Published 1:08 pm Wednesday, October 23, 2019

DALTON, Ga. — City of Dalton officials sent an email letter to the Whitfield County Board of Commissioners Tuesday afternoon outlining a proposed settlement of their service delivery agreement negotiations. The letter arrived about an hour after county Board of Commissioners Chairman Lynn Laughter says she received a call from a Chattanooga reporter asking about the letter.

“(The reporter) was asking about how the mediation (last Thursday ) went, and then he said, ‘What do you think about the letter?’ and I said, ‘What letter?'” said Laughter. “He said the proposal that (City of Dalton special counsel) Andy Welch sent y’all last Friday. I didn’t have it. I called (County Attorney) Robert Smalley, he didn’t have it. (County Administrator) Mark Gibson didn’t have it. We received a letter from (the reporter).”

City Administrator Jason Parker said Tuesday night “what we intended was for our legal counsel to send it to the county’s legal counsel by email Friday afternoon and then make a hand delivery Monday afternoon. When I heard from Lynn that she had received a letter from a reporter I was surprised that the county had not received it. I apologized to Chairman Laughter about that. It was not our intention for the letter to be delivered to someone else before the county. We did not execute our plan as quickly as we intended.”

Parker said the reporter interviewed Mayor Dennis Mock earlier Tuesday when Mock told the reporter the city had sent the county a letter “laying out a proposal to settle the service delivery agreement.”

“The reporter contacted me requesting a copy of the letter,” Parker said.

Parker said he has not had a chance to speak to Welch, a McDonough attorney, about why the letter was not delivered as intended.

Laughter said Parker sent her a text “saying basically ‘sorry about the mix-up.'”

Under state law, cities and counties must negotiate a new service delivery agreement every 10 years, spelling out which services the governments will provide and how they will be funded. The agreements are aimed at reducing duplication of services. Without an agreement, the county, the City of Dalton and the other cities in the county become ineligible for state grants and other funding and permits.

The current service delivery agreement is actually 39 separate agreements between the cities and the county, covering everything from ambulance service to historic preservation to zoning. It expires on Oct. 31 and if it is not recertified, Whitfield County, Dalton, Cohutta, Tunnel Hill and Varnell become ineligible for state grants and other funding and for state-issued permits.

Representatives of the governments met for almost eight hours on Thursday in mediation but failed to reach an agreement.

The letter proposes that:

• The city will drop its request that the county fund the county’s Public Works Department solely from property tax revenue and other funds from a special tax district that excludes the City of Dalton.

• The county will transfer 10 percentage points of its Local Option Sales Tax (LOST) revenue to the city. That would give the city 45% of LOST funds and cost the county about $1.6 million a year. The LOST is a 1% sales tax collected on most goods sold in the county that local governments use to fund their operations. The letter proposes that this deal would be locked in for 12 years, eliminating the need to renegotiate the LOST agreement in 2022. Cities and counties typically renegotiate their LOST agreements after the results of the census are in, which would be in 2022.

• The city will take over the Dalton Convention Center in 2020, and the county will pay the city a one-time payment of $2 million for its share of deferred maintenance.

• The Dalton Area Convention & Visitors Bureau will be operated under the convention center and the county will dedicate all of its current and future hotel/motel tax revenue each year to fund the agency.

• Starting in 2020, the county will fund at least $2.2 million of its budget from property taxes and other revenue generated in a new special tax district that would be identical to the three existing special tax districts that exclude the City of Dalton. The existing special tax districts are for the fire department, the landfill and services the city and county share such as the library. The letter said that the $2.2 million will offset the costs to the city of services it does not receive or will no longer receive from the county, including the county engineer’s department, the county Parks and Recreation Department and administrative, human resources and finance expenses for services not received by the city.

• The city will provide its own building, permitting and stormwater inspection service.

“I’m proud of the terms that we are offering,” said council member Annalee Harlan. “It’s an equitable offer. We are trying to be as fair as possible.”

For the past several weeks, commissioners have said that the issues the city officials wanted to discuss were properly part of the LOST agreement, not the service delivery agreement, and offered to reopen negotiations for that agreement. City Council members, in turn, said this was not about the LOST agreement and they were not trying to renegotiate that agreement.

But Laughter noted that one of the major parts of the letter is a request for a bigger share of LOST money.

“What they want is LOST,” she said. “I am having such difficulty trying to figure out why the city is even doing this. In 2012 when the last LOST was negotiated, the county was getting 83.24 percent of LOST. That is down to 61.556. That’s three-and-a-half million dollars. The city really won in that negotiation, and the county lost. They won on making us create a special tax district to fund the fire department, our share of the library and the landfill.”

Asked if this was about the LOST all along, Mock said, “Absolutely not.”

“In the process of negotiations and mediation, we came to believe we could kill two birds with one stone and take care of that (the LOST),” he said. “We thought that was one of the county’s wishes, but apparently, it was not one of the county’s wishes.”

Mock said city officials also thought that having the city take over the convention center was one of the county’s wishes.

“We thought that if we could find reasonable terms we would put that in there as well,” he said.

Laughter said commissioners have not yet had time to discuss the letter and its proposals. But she indicated she will not agree to giving the city 10 percentage points more in the LOST agreement or to its request for control of the convention center.

“I’ll give it to them but I’m not going to pay them to take it,” she said.

Mock said city officials are “still open to negotiations on all those points.”

“Nothing is off the table,” he said. “If they can come back with a better plan, we would consider it. But we haven’t seen it yet. It’s in our best interest to keep plugging away at this.”

Mock said he hopes to have an agreement before Oct. 31.

“We’ve just got to get back together and find out what they want and how we can make our proposal more palatable,” he said.