The Commission voted to pass a resolution introduced by 4th District Commissioner J. Adam Lowe to give the city of Cleveland the $850,000 of disputed sales tax, and not appeal the case during the voting session Monday. The City Council does not meet again until Monday.
Each of the commissioners had received a copy of a memo from City Manager Janice Casteel addressed to Mayor Tom Rowland and the City Council.
“I have a real problem (with the fact) that my neighbors and I can’t sit down and work this whole thing out. It was just real discouraging to see this,” said 2nd District Commissioner Connie Wilson.
The memorandum stated if the city accepted the money it would be giving up more than $1.4 million it is entitled to in the judgment. The judgment ruled the city of Cleveland could collect its own sales tax until June 30, 2010. The memo was dated July 13, two days after the Council’s last meeting.
Lowe pointed out the letter did not represent the opinion of the City Council.
“In my mind the only opinion that matters is (the one) that is ratified by the voters,” said Lowe.
Lowe said the Commission should still pass the resolution. He said he felt that members of the City Council were ready to end the dispute.
Attorney James Logan, who represented Bradley County in the case said the understanding of the judgment had not changed.
According to Logan only part of the revenue of the 1/2 cent sales tax increase was kept in trust (this is the $850,000 figure). Logan said it was a complex issue and there were still questions about certain aspects of the case.
If the City Council votes to accept the money, the dispute will be over and the 2009 sale tax increase revenue will go to the government where the sales tax was collected. Sales tax collected within the city limits will go to the city. What is collected in the county will go to the county.
If the county is required to pay the city the additional money, an increase in property tax would be needed to get the money, according to Logan.
The county voted not to set the property tax rate because the Commission was unsure if the city would accept the offer.
Logan said his office or that of County Attorney Joe Byrd should research what the payment method to the city would have to be if they do not accept the settlement from the county. The deadline to set the tax rate is Aug. 1.
The City Council has not yet made a decision on whether to appeal the decision or not. The City may choose to appeal the decision to get a different ruling on the distribution of sales tax collected from the 1982 referendum.
The last day for either government to file an appeal is Aug. 4.
