Tuesday afternoon, at a LOST negotiation meeting that was cancelled by Upson County and reinstated by the City of Thomaston, with only Thomaston representatives attending, City Attorney Joel Bentley presented the city’s position on the eight criteria established by the state for determining the Local Option Sales Tax (LOST) percentage split, and stated that that if Upson County would not agree to keep the LOST split the same has it has been (55 percent for Upson County, 43 percent for Thomaston and 2 percent for Yatesville), that the City of Thomaston will seek what it feels is its fair share of the tax revenue which, Bentley stated, at a minimum would be the opposite of the current tax split.
Tuesday evening at the Upson County Board of Commissioners meeting, the board presented its tax equity study, stating its position that Thomaston is not paying its fair share for services provided by the county, and that the LOST percentage split cannot be decided until the structure of payment for service delivery is settled. The board failed to pass a resolution calling for the LOST split to remain as it is, with a motion to approve the current percentages dying for lack of a second.
In an effort to fairly present both sides of this divisive issue, the staff of The Thomaston Times has written two lengthy articles below based on the presentations made by the city and county Tuesday night. It should be noted that the majority of the city’s presentation dealt with the eight criteria established by the state for discussion of the LOST split, while the county’s presentation dealt mainly with the delivery of services to county and city residents. While they are separate, they are tied together in the LOST negotiations.
The next scheduled meeting for LOST negotiations is Tuesday, August 21, at 5 p.m., in the basement meeting room of the Thomaston-Upson Archives. The meeting is open to the public.
Thomaston claims it is not getting
its fair share of LOST revenue
LOST negotiations took a strange turn Tuesday evening, with Upson County, which already had presentation of its tax equity study and a resolution on its agenda for later Tuesday night, cancelling the LOST negotiation meeting, and the City of Thomaston, feeling that the negotiations needed to go on, reinstating the LOST meeting. As a result, only the City of Thomaston was represented at the LOST meeting. City Attorney Joel Bentley presented the city’s perspective on how sales tax revenue is received between the city and county. The presentation was based, for the most part, on the eight-point distribution criteria set by the Georgia General Assembly for the one percent Local Option Sales Tax (LOST), and the city’s position on each point.
LOST Criteria 1 : The service delivery responsibilities of each political subdivision to the population served by the political jurisdiction and served during normal business hours, conventions, trade shows, athletic events and the inherent value to a community of a central business district and the unincorporated areas of the county and the obligation of all residents of the county for the maintenance and prosperity of the central business district and the unincorporated areas of the county.
“With respect to that point,” stated Bentley, “I’d like to point out the following facts and figures:
a. Population – Unincorporated Upson County’s population is 64.91 percent of the total population. Thomaston Municipal population is 35.09 percent.
b. Population during normal business hours, which means daylight population – Upson County is 54.12 percent. Thomaston is 45.88 percent.
c. As to trade shows, athletic events, that type of thing, the combination of food service sales are 10.76 percent in the county, and 89.24 percent in the city.
d. As far as the residential digest, the residents break down as 67.33 percent in the county and 32.67 percent in the city.
e. The commercial digest, on the other hand, goes in the opposite direction – Commercial digest is 22.65 percent in the county, 77.35 percent in the City of Thomaston.
f. The industrial digest is similar – 31.69 of the industrial digest lies in the county, 68.31 lies within the city.
“These things point out one final salient fact in all this data –
g. Total employment in Upson County – 27.26 percent of the jobs are in Upson County. 72.74 percent of all jobs in this county lie within the City of Thomaston.
“We want you consider those facts when you consider how to break down the LOST split.”
LOST Criteria 2: The service delivery responsibilities of each political subdivision to the resident population of the subdivision.
“In these areas, you will see that total services provided in the county and city:
a. In the county, total services provided to residents – 40.02 percent. City – 57.98 percent.
b. All services, meaning residential and commercial – 44.73 percent to the county, 57.25 percent in the city.”
LOST Criteria 3: The existing service delivery responsibility of each political subdivision.
“You will notice that more of the services provided in the community are in the City of Thomaston than are in the county. The reason that’s important is those services cost money. There has to be a funding source for those services.”
LOST Criteria 4: The effect of a change in sales tax distribution on the ability of each political subdivision to meet its short-term and long-term debt.
“The county’s debt load as to the total load of debt is 29.13 percent. The city’s is 70.87 percent. So if there is a radical change in the LOST distribution to the detriment of the city, it will impact the city’s ability to service its debt, which will necessarily result in the city having to explore other sources of funding.”
LOST Criteria 5: The point of sale and use which generates the tax to be apportioned.
“This is perhaps the most striking,” said Bentley. “Of the retail sales trade, which is the primary focus of the 1 percent LOST dollars, 5.86 percent of that money is generated in the county. 94.14 percent is generated within the city.”
LOST Criteria 6: The existence of intergovernmental agreements among and between the political subdivisions.
“Historically, the city and county have worked together for joint projects. Since 2008, the projects have either been terminated by the county, or the agreements have been allowed to expire without being renegotiated,” Bentley said. “By my research, there are only two current joint projects between the city and the county. There is an indefinite agreement for zoning procedures, and the joint jail facilities use agreement will continue until 2045.”
LOST Criteria 7: The use by any political subdivision of property taxes and other revenues from some taxpayers to subsidize the cost of services provided to other taxpayers of the levying subdivision.
“Total tax burden is 56.50 percent in Upson County, and 43.50 percent in the City of Thomaston. As you will note, the City of Thomaston only comprises 35 percent of the population of Upson County. Therefore, of the total tax liability, Thomaston is paying 8 percent more than the population would indicate.”
LOST Criteria 8: Any coordinated plan of county and municipal service delivery and financing.
“Regretfully, at this point, although there is, in fact, an existing comprehensive plan that is on file at the State of Georgia, these joint projects have either expired or been terminated by the county. The county takes the position that they are subsidiaries of the county government, and they levy taxes on a countywide basis without a special tax district, and provide those services without express agreement of the city.
“Those are the eight criteria. How will they affect the city and county?” asked Bentley.
“Just so you know, with respect to countywide services, the county has multiple departments which provide services almost exclusively to residents who live outside the city. For example, the Roads and Maintenance Department, based on my research on prior LOST negotiations that I’ve been able to glean from the documents that the county has provided pursuant to our Open Records request, for Roads and Maintenance from 1983 to 2001, the county spent $21,179,079. Between 2002 and 2011, the county spent $10,777,880, for a total from 1983 to 2011 of $31,952,959, out of general funds.
“I went back and looked at the last two SPLOST agreements. Under the SPLOST agreement for 2004, the county specified $3.1 million to pave 15 miles of unpaved roadway in unincorporated areas of the county. The county also set aside $4 million for repair and resurfacing of 100 miles of roads, for a total of $7.1 million out of the 2004 SPLOST.
“As for the SPLOST that was most recently voted on by the taxpayers of this community, the county set aside $485,000 for equipment, $150,000 for IT (Information Technology) for the Road Department, and $4,520,521 for roads in the county, for a total of $5,155,321. For the last two SPLOST’s, the combined totals were $12,255,321.
“Since 1983, if you count these and not counting any other SPLOST’s, the county has spend almost $44 million dollars on the Road Department and roads in the county. To the best of my knowledge and belief, not a single road owned by the City of Thomaston has ever been paved by the Road Department.
“With respect to SPLOST, the county says that it fairly and equitably split the SPLOST proceeds. While the city can negotiate, the county has the right to impose the SPLOST without agreement, as was done in 2011. This is a tax, as you shall recall from the 8th criteria, that is largely imposed through retail trade sales. Again, which 94.1 percent are generated within the city limits.
“The percentage split of the last two SPLOST’s is as follows:
“The 2004 SPLOST was estimated to generate $18 million. 21.1 percent off the top went to Upson County for countywide projects. 78.9 percent was split as follows: 65 percent to Upson County, 34 percent to the City of Thomaston, and 1 percent to the City of Yatesville. The net effect of this is 26.83 of the SPLOST money went to the City of Thomaston for projects designated exclusively by the city. The 2004 SPLOST was reached by an agreement with all parties; it was a six-year SPLOST
“The 2011 SPLOST was not reached with an agreement of all parties, and it is a five-year SPLOST. $16 million is the estimate in SPLOST funds – 20 percent off the top to Upson County for countywide projects. The remaining 80 percent was as follows: 65.94 percent to Upson County, 33.68 percent to the City of Thomaston, and 1.38 percent to the City of Yatesville.
“The bottom line is this,” said Bentley. “There are three sources of revenue subject to joint discussion or agreement between the city and the county. With respect to SPLOST, the county recently dictated the amount that the city would receive, 26.1 percent (of the total SPLOST). Despite the overwhelming evidence that the vast majority of the tax dollars are generated by retail sales within the city, and the businesses which generate this source of revenue are almost exclusively within the city. With respect to ad valorem taxes, the city pays more than its fair share of countywide ad valorem taxes, given the dearth of county services provided in the city. The city will address the funding inequity by calling for the county to enter into negotiations with respect to the service delivery strategy agreements between the city and county.
“Only in the area of LOST negotiations does the city have the opportunity to achieve true equity and taxation,” Bentley stated. “If the county is unwilling to leave the LOST split as it is and has been since its inception, the city will seek to obtain the split that it believes is justified. At a minimum, this means reversal of the current distribution.”
Upson County claims Thomaston not
not paying fair share for services
An “eye opening experience” were the words that interim District Three Commissioner Scotty Hammonds used to describe the Tax Equity Study presentation made at the Upson County Commissioners meeting Tuesday night. The study was done in relation to the LOST (Local Option Sales Tax) negotiations going on between the county, City of Thomaston and City of Yatesville. Randall Hildreth, of RJH State and Local Tax Services, offered his findings to the board which showed the county is paying more than their fair share when it comes to the services provided to citizens of Upson County.
Services that are provided to citizens in Upson County and all of its’ municipalities are outlined in the Service Delivery Strategy Agreement which Hildreth noted includes four primary areas: utilities, public safety, justice and health and human services. All together there are 25 services outlined in the agreement and 23 of those are funded by the county through the general fund. The city does or is suppose to pay a portion of those services, however Hildreth stated they are either not being paid, or not paying enough to make a difference. He continued by saying there is no reason for the governments to not have had a discussion about service delivery because everything they need to reference is in the previous agreement; also that until the services are discussed, no agreement on the LOST allocations can be made. Chairman Maurice Raines had noted earlier in the evening that the City of Thomaston had wanted to approve a resolution for the LOST percentages to stay the same without discussing service delivery at a recent LOST meeting.
“LOST and Service Delivery are intimately tied together; you can’t have one without the other,” said Hildreth. “To agree upon percentages without having a discussion about service delivery is irresponsible… Everything we need to begin discussions is right here. I understand about their (the city of Thomaston) need for the financials, but this is the base-line of what we need to be talking about.”
One of the main discrepancies that Hildreth pointed out was in reference to the intergovernmental agreements involving utilities, general buildings and sharing of space. Administrative offices for the City of Thomaston and Upson County are located in the Government Complex (R. E. Lee) and the space is equally split 50-50 between the two entities. However, it has come to light that while they occupy an equal share, the city is only paying 30 percent of the utilities; leaving 70 percent to be paid by the county. Upson County also is responsible for the maintenance and upkeep of the facilities with no financial help from the city.
The next issue that was addressed dealt with the Building and Zoning department, in which the space, vehicles and funding is provided by the county. The department is used by both governments and Hildreth’s study shows that the majority of home and building inspections are done within the city limits. The service is provided by county employees, yet the fees collected all go to the City of Thomaston.
Thirdly, when it comes to public safety Upson County funds the E-911, Emergency Management Services and the upkeep of the weather sirens. Hildreth pointed out that the county also covers weekend and holiday calls for all services due to the fact that the city forwards all calls to the county on those days. However, the largest discrepancy comes from a budget item in 2010 for the Upson County Jail. City inmates are housed at the county jail and the city is supposed to reimburse the county for inmate meals, which did not happen in 2010 though, leaving $20,000 to never be paid to the county.
Finally, the court system was looked at, in which the county provides capitol, infrastructure and staffing needs for the entire community. Hildreth’s study took a block sample of cases from the Superior Court to determine where the crimes originated by tracing back to the arresting officer. He found that 40 percent of the crimes committed occurred in the city limits; however the cost was deferred to the county.
“In all of our findings what we saw was that the money coming in from the City of Thomaston was nowhere close to covering the expenditures covered by Upson County on behalf of all citizens in the county,” said Hildreth.
He also noted that when his study looked at the percentage allocations for the 2011 SPLOST, too much money was being given to the city. The original split based on population was 65.94 percent county, 32.68 percent city and 1.38 percent City of Yatesville. But after revising the population numbers to show the county includes everyone inside the limits of Upson County instead of just the unincorporated areas, Hildreth found that the county had been shorted a little over $1 million; leaving the split to be 74 percent county, 25 percent City of Thomaston and 1 percent City of Yatesville .
After the presentation was over, Chairman Raines spoke about the LOST negotiations and how they have been going.
“Let me begin by saying that I find it unfortunate and regrettable that our relationship with the City of Thomaston has been lowered to what it is today. However, it is not entirely any of our faults; the state designed this process in such a way that causes governments to become adversaries when essential funding is threatened to be taken from them. The County of Upson has tried in good faith to work with both Thomaston and Yatesville to provide leadership and services to all citizens. However, for the last few months, and the better part of my first term in office, these efforts have been met by resistance. And while this process continues to present the county with challenges, it is our duty and our obligation to act in the best interest of Upson County tax payers without regard to where they live. The intended outcome of the negotiations is not to “win” or to “beat” the city; but to secure enough funding from sales tax to continue to offer the services that Upson County citizens deserve. Much of the squabbling that has occurred in our recent meetings would have never been necessary if the requests for informal meetings that were offered to the city had been accepted. On many occasions, the county manager, other administrative staff and I have reached out to city officials on a myriad of issues and I pledge to continue to practice this in the future. I refuse to let this or any matter stand between local elected officials.”
The final order of business on the agenda was the adoption of a resolution to approve the LOST percentages, however the motion made by Commissioner Biggs died due to a lack of a second. Commissioner Hammonds stated that after reviewing the study presented that night he did not see how the board could move without addressing the service issues. Therefore, the county will go back into negotiations with the City of Thomaston to try to reach an agreement.