Leesburg, Ga. Representatives of the Lee County, Leesburg and Smithville governments decided at a special called joint meeting Friday to appoint two members each to a "compromise committee" that will determine how the three entities divide Local-Option Sales Tax collected in the county over the next decade.
As expected, Lee County officials offered figures that they say justify a reduction in LOST funds given to the smaller municipalities in the county. And while he prefaced his presentation by saying he'd come up with figures as a "starting point" for negotiations, County Commissioner Rick Muggridge offered a plan that called for Lee County to receive 94 percent of the 1 percent sales tax that during the 2011 fiscal year totaled $3,507,908.26, while Leesburg would get 5 percent and Smithville 1 percent.
The splits are currently Lee County 70.94 percent, Leesburg 17.5 percent and Smithville 11.56.
Smithville Mayor Jerry Myrick, who attended the meeting, said the tiny
municipality "stands to lose a lot" if a compromise is not reached.
“We’re getting peanuts already,” Myrick said. “If we don’t negotiate a bigger portion of the LOST money, it’s going to a impact our budget.”
Leesburg Mayor Jim Quinn, who said before and during the meeting that he feels the county seat actually is entitled to more than the 17 percent of LOST it now gets, said he’s counting on a “spirit of cooperation” when the representatives of the three groups meet.
“I’m OK with the process of this meeting, but I hope we’ll go into the negotiations with a true spirit of cooperation,” Quinn said. “Because the original numbers they’re presenting are scary.”
Those numbers, as Leesburg City Attorney Bert Gregory pointed out, could impact the budgets of both municipalities considerably.
“Each percentage point is equal to $35,000,” Gregory said, pointing to a figure presented by Lee Finance Director Heather Kittrell. “So every percentage (of funding) shifted to the county from Leesburg or Smithville will cut $35,000 out of their budgets.”
Lee County Attorney Jimmy Skipper prefaced the meeting by discussing LOST requirements as stipulated by state law. He told the officials that if they did not settle the matter amicably in 60 days or after a second 60-day mediation period, a judge outside the district would be appointed to mediate the matter.
Skipper also pointed out certain criteria that, according to Georgia code, should be used to determine distribution of the LOST funds, including service delivery responsibilities of each political subdivision during business hours, service delivery responsibilities to the resident population of a political subdivision, existing service delivery responsibility, the effect a change in distribution would have on subdivisions’ ability to meet short-term and long-term debt, the point of sale and use, existence of intergovernmental agreements, use of property taxes to subsidize cost of services and any coordinated plan of service delivery.
He also told those gathered: “If you don’t reach an agreement and a judge has to decide for you, there are very limited grounds for an appeal to overturn his decision. I’d say about 99 times out of 100, a judge’s decision is the final decision.”
Smithville City Attorney Tommy Coleman pointed out a provision that would allow a smaller municipality such as Smithville to designate itself an “absent city” that would allow it to automatically receive a percentage of funding equal to the percentage of the overall municipal population it had, which in Smithville’s case is slightly less than 20 percent.
“I just wanted to point that out so that calculations can be made,” he said. “If it serves (Smithville) better not to say anything, it’s an option we would consider.”
Coleman then got right to the heart of the matter by asking County Commission Chairman Ed Duffy, who moderated the meeting, if the county had come up with percentages to work with. Duffy turned that matter over the Muggridge, who used “black-and-white numbers” provided by Commissioner Bill Williams to illustrate how he reached his 94-5-1 split.
Williams, a CPA, noted that the Lee-Leesburg-Smithville population split, according to census figures, is 89.07 percent-9.12 percent-1.81 percent. Other pertinent splits included shares of property tax: 96.76 percent-2.92 percent-0.32 percent; shares of property tax digest: 93.04-5.98-0.98; and shares of total expenditures: 88.15-8.79-3.06.
“I tried to approach this starting with nothing and interpret what I read,” Muggridge said. “I changed this twice during the week based on new information, including information I read in The Herald about what y’all in Leesburg and Smithville were thinking.
“But we had to start somewhere, and that’s where I came up with these numbers.”
Duffy appointed Williams and Muggridge as the county’s representatives on a committee that will meet to discuss a possible compromise on LOST distribution, and state Rep. Ed Rynders suggested that since Commissioner Dennis Roland represents or has represented interests in Smithville and Leesburg, he should be a part of the committee as well.
The committee is tentatively expected to hold its first meeting July 9.
“I think this group came up with an appropriate way to proceed here today,” Coleman said. “This is very important, especially to a small community like Smithville. This determines how much money the city will be able to put into its budget and what ad valorem tax rates will be for the next 10 years.”