Bradley County Mayor D. Gary Davis presented a possible solution to county commissioners Monday evening prior to entering executive session. He suggested the money be used to purchase an industrial park.
The money, he said, is not budgeted by the city or county, but continues to be set aside until a court decision is made.
Bradley County Trustee Mike Smith said this morning his office has set aside $689,000.
Davis said, “Let’s continue to leave it set aside to make the bond payments on buying industrial park property which we need very bad. Yes, we need it in our budget and I’m sure the city says they need it in their budget. Here is money we are collecting that the taxpayers are paying. We’ve not been spending it. We’ve not been budgeting it, so let’s offer to the city to drop the case, take the attorneys out of the picture, and let’s just continue to set this money aside to make the bond payment for industrial park property.”
But, City Manager Janice Casteel said this morning she does not know what Davis proposed to commissioners.
“I don’t know what his proposal was, but if the agreement is in perpetuity, then it is not in the best interest of city taxpayers,” she said.
Casteel feels strongly the city should stick to its commitment that the money is to be used only on capital improvement projects such as paving, equipment and capital projects. The county did not make the same commitment and is free to use its funds for salaries and routine operations.
“While an industrial park fulfills that purpose (capital improvement), I feel very strongly about keeping our commitment to the citizens,” she said. “While it is an important need today, there are and will continue to be other needs in the city.”
The dispute between the city and county arose after Cleveland residents passed a resolution on March 10, 2009, to raise the sales tax from 2.25 percent to 2.75 percent. County voters approved the increase two months later on May 14.
The following month, Bradley County sued Cleveland in Chancery Court asking that a 1967 sales tax distribution agreement between the city and county be enforced. The agreement set a formula based on the average daily attendance of city and county schools. The first 50 percent of sales tax is divided between the two school systems. Cleveland City Schools receives a third of that amount and Bradley County Schools receives two-thirds based on total enrollment.
The remaining 50 percent is distributed with two-thirds going to city government and one-third to county government.
“Two years later, the courts have been involved and we still don’t have an agreement,” Davis said Monday. “Instead of continuing the case, let’s talk to the city because it’s not in their budget and it’s not in our budget.
Casteel said she is hopeful the court will make its decision by June 30.
The city and county share the first 2.25 percent in accordance with the May 10, 1967, contract, but because there was no agreement before the resolution was passed, city officials want to distribute the remaining 50 percent of the increase based on point of sale, according to state law. In that scenario, the city collects 88 percent to the county’s 12 percent. The dispute centers around the 21 percent difference between 33 percent and 12 percent.
The city contends the two local governments issued joint resolutions in the past, but that was not the case in 2009 since county commissioners opted not to join with the city in asking for the half-cent increase.
From the county’s viewpoint, the 1967 agreement was not amended prior to increasing the sales tax in 1982. The sharing arrangement remained intact then and it should remain intact.
But, the agreement has been strained by the city’s attempt to break the agreement only to be stymied by a 1999 Chancery Court decision that upheld the sharing agreement.