Actions defended in sales tax lawsuit case
by DAVID DAVIS, Managing Editor
Apr 21, 2011 | 1301 views | 0 0 comments | 5 5 recommendations | email to a friend | print
Councilman David May said Wednesday morning a decision from a third party is needed to settle a sales tax disagreement between the city and county.

A lawsuit that has been pending in Chancery Court since June 2009 is scheduled to begin this afternoon. May said at a special meeting of the Cleveland City Council that if the hearing was delayed 90 days, there would be no benefit if both sides continued to negotiate and no agreement was reached.

May outlined his reasoning for voting against a previous motion to delay today’s hearing.

“I felt like the case was going to be tried in the press. It certainly has been in the last three or four days,” he said. “All of a sudden, it seems like we are right down to the last moment and we’re trying to postpone it.”

He asked the attorney representing the city: If the case goes to court, does that prevent the city and county from negotiating and getting our differences behind us?

Attorney Douglas Johnston, of Barrett Johnston LLC, Nashville, said, “Absolutely not. You have every opportunity to negotiate at any time.”

May asked if Chancellor Court Judge Jerri Bryant is likely to issue a decision on the day of the hearing.

“I’d be surprised by that, although it could happen,” Johnston said. “She has had the final papers in front of her at least a week, so she could be prepared to do that.”

He said because the dispute involves two political bodies, she’s going to want to issue a written decision.

May asked if there was still a “grace period” for negotiations.

“Sure,” Johnston said.

May said that according to the news media, “We can’t even agree why we’re in court. We say the county brought the lawsuit on their behalf against us. The county says it’s because we don’t go by a contract set in 1967, so with all due respect to the County Commission, I know you’re doing what you’ve been elected to do. You are looking after the county dollar. I feel like I’m trying to do the same.”

Cleveland Mayor Tom Rowland said there appears to be confusion among the public about the 1967 agreement between the city and county. He asked Johnston to clarify the agreement.

Johnston said the county suit called into question enforcement of the 1967 agreement. The city’s countersuit called into question the 1967 contract itself because it contains no termination clause.

“But we also raised the issue, not only the issue (of) the division of the 2009 increase, but the 1982 increase because neither one of those were covered by an amendment to the contract,” he said.

He said the agreement only covers the 1967 agreement.

Councilman Bill Estes asked if Bryant might issue a verbal opinion followed by a written decision.

Johnston said she might or might not. But if she did, it would codify the issues and help in future mediation.

At-Large Councilman Richard Banks described leaving an informal meeting between city councilmen and county commissioners on Tuesday evening with a sense of compromise.

“In my opinion, most of the people there expressed the concern that we need to look to the future and settle our differences instead of being involved in litigation,” he said. “I think the county made some overtures it might dismiss this lawsuit if we could work together on these common objectives as far as going forward with a division of the disputed funds.”

He left that meeting after telling them he would submit a motion at a special Council meeting Wednesday morning to ask Bryant for a 90-day continuance. There would be an understanding that each body have, on every meeting agenda, a discussion regarding the pending litigation and continue to negotiate.

One alternative, he said, was to proceed in court and let time answer concerns about appeals and cooperation between the two governing bodies on jointly funded projects.

Another alternative, though not a real option because of time constraints, was for the county to drop its lawsuit and the city drop its countersuit.