In 2018, a state requirement to renew service delivery agreements sparked a dispute locally on how residents should be taxed for city and county services. Two years later, Cherokee County and some of its cities still can’t agree on how to resolve the argument.
The state requires counties and the cities within them to approve a service delivery strategy agreement every 10 years. The agreements are designed to prevent residents from being taxed extra for a duplication of city and county services.
Those local governments without an agreement are not eligible to receive some state money for new local projects, receive state permits and or receive incentives for economic development projects.
At the center of the dispute is whether certain services provided by the county should be paid for through county-wide sources, namely the county property tax rate that’s the same for unincorporated county residents and city residents. State law requires that unincorporated residents bear the cost of any service that “provides primarily for the benefit of the unincorporated area of the county.”
The cities of Canton, Holly Springs and Woodstock, Waleska and Mountain Park, through consultant Brown Pelican Consulting, argue that their residents are overtaxed for certain county services because the cities already provide those services. The main contested services are parks and recreation, roads, and stormwater, though the cities also cite libraries and law enforcement. City officials report their residents are paying an extra $18.9 million for services primarily for those in unincorporated areas. Cherokee County, however, argues it’s the other way around: the county estimates that a surplus of unincorporated revenues and payments for city services create a net benefit of $13.2 million for municipal residents. County officials say the main contested services, parks, roads and stormwater, are things that everyone uses and should be funded county-wide.
Public facilities like parks are open to city dwellers and unincorporated residents alike. Law enforcement agencies, like fire departments, have agreements to cover shared services and emergency response.
The most recent agreement was due at the end of October 2018, and the cities and counties began discussions early that year. The previous 2008 agreement had been largely unchanged from the prior decade, the first year Georgia required them, and according to city officials, was due for an overhaul.
In July 2018, all the cities hired Brown Pelican to identify tax inequities and make recommendations for the new service delivery agreement. The consultants determined municipal residents were paying nearly $19 million for unincorporated services, and recommended creating an unincorporated “special services district” to carve out the county’s spending for those areas.
Despite negotiations, the county and cities missed an initial state deadline of Oct. 31, 2018 to reach agreement, and requested an extension from the Georgia Department of Community Affairs. The local governments received an extension through June 30, which was not submitted in time for DCA to process it, so they fell out of compliance until they submitted another extension through Oct. 31 last year, and sanctions were lifted in August.
In August, elected officials from Cherokee County, Canton, Holly Springs, Waleska and Woodstock met to begin a mediation process with Norman Fletcher, former chief justice of the Georgia Supreme Court in the first of two scheduled hearings behind closed doors. The second meeting was postponed indefinitely, though informal discussions continued between city and county representatives. Ball Ground entered into a formal agreement with the county on service delivery. In September, county officials sent terms of a proposed compromise to the other cities that went unanswered, according to last week’s Board of Commissioners resolution.
Also in September, two libraries were caught in the middle of the dispute when Sequoyah Regional Library System announced it would reduce weekend hours. Library officials said that Canton and Woodstock cut funding for R.T. Jones Memorial Library and Woodstock Public Library respectively, citing the service delivery negotiations, and since October, the Woodstock library is closed on Saturdays and the Canton library is closed on Sundays.
In October, the cities still in dispute with the county each approved an updated form outlining the services they believe should be paid only from unincorporated sources: parks and roads, as well as code enforcement, fire services, administration and stormwater. Another point of contention is the county’s debt service from the 2007 Resource Recovery Development Authority bond, which was issued to a local recycling company that failed in 2012.
The county answered in November with multiple offers: it would create an unincorporated fund, which county officials believe would be more flexible than a tax district but would provide transparency on how tax dollars are spent; the county would pay for road paving within city limits, only charging the cost of materials; the county would carve out private development stormwater and pay for it with unincorporated revenues; and it would pay for the remaining RRDA debt with unincorporated tax money. According to the county’s resolution, city officials responded in December but only to some minor issues. City and county officials held another informal meeting.
Canton City Manager Billy Peppers said the offers the county has made haven’t been enough, that there would still be tax inequities with road maintenance and stormwater. He expressed doubt that the county would follow through with its promises.
“The local government elected officials are required to sign a statement with SDS that states that the services are delivered in the manner outlined in the forms and that it is true,” Peppers said. “I don’t think our officials have that confidence at this time.”
In January, local city councils adopted a resolution calling for three public meetings to resolve service delivery, with two council members from each city and two county commissioners representing the local governments. Thursday, the county board of commissioners held a special called meeting to consider the proposal and rejected the meetings, instead favoring the closed-session mediation process begun last year.
The mayors of Canton, Holly Springs and Woodstock complained Friday that the county had rejected a more transparent process and opted for one that involves more legal fees for the county and the cities.
“We believe that the public has a right to hear how their tax dollars are spent,” Canton Mayor Bill Grant said in a statement.
Commission Chairman Harry Johnston said he was open to public meetings, but commissioners decided to continue with the closed-door mediation to avoid “political grandstanding.”
“The commissioners don’t think it would be productive,” he said.
Although the county is not formally participating in the public meetings, city officials will meet for discussions as scheduled. Johnston said he plans to attend and hopes they will bring local governments closer to resolution.
The county, as well as all of the cities in it, have been in non-compliant status with the state since November and are ineligible for certain state funding. In both Canton and Holly Springs, officials have reported that the municipalities have not received an annual Georgia Department of Transportation grant for road paving this year, and Holly Springs will instead use its own money. In Canton, a local business was prevented from benefiting from a state-funded Downtown Development Revolving Loan Fund process.
The cities’ meetings are scheduled for 6 p.m. Feb. 26 at Canton City Hall to discuss parks and recreation; 6 p.m. March 25 at Woodstock’s Chambers at City Center to discuss roads and stormwater; 6 p.m. April 22 at a location of county commissioners’ choosing to discuss sources of funds, uses of funds and special tax districts.
Canton, Holly Springs, Woodstock, Waleska and Mountain Park will consider the mediation process with the county at upcoming mayor and council meetings.