No progress on LOST negotiations

The 58.6 percent proposed for the county was a figure that BOC chairman Hunter Bicknell “threw out” at the Aug. 1 meeting.

However, Bicknell said on Tuesday, “I didn’t think we would be starting at the 58.6 percent, I envisioned that being an average over the 10-year period.”

“I expected that number to go up in the later years and the county would re-coup some of its funds if the economy turns around,” Bicknell added.

Bicknell said he offered the 58.6 percent based on a phase-in approach so that the cities set to lose the most money would not take a big hit in the beginning. Commerce stands to lose the most money, whatever formula is reached, because its population grew less rapidly than the rest of the county.

County manager Kevin Poe said, “My initial reaction is this won’t fly. I still say we are three to four percentage points off.”

The deadline to reach an agreement is Aug. 16.

The group discussed the issue going into mediation, and Braselton city manager Jennifer Dees, who has just experienced LOST mediation in Barrow County, recommended that the group consider hiring Deddy Gallis, Athens, as the mediator.

“He is close and I am a stickler when it comes to paying for all that mileage,” Dees said.

Jefferson Mayor Jim Joiner said, “I think we need to go ahead and hire a mediator.”

Dees advised the group that mediation is costly.

Sutton explained that the mediation cost is paid by each entity based on the final split approved by the mediator.

Bicknell instructed Poe to contact each of the county commissioners and get a consensus on a drop-dead number and get that information out to all the city representatives.

“We have your (cities’) drop-dead number, we need to get our drop-dead number and get that out to John (Ward, Jefferson city manager),” Bicknell said.

Joiner said if the matter goes to mediation the cities would start at 53 percent (as the county’s share). “We certainly won’t start at 58.6 percent,” Joiner said.

Poe said, “I’m sure the county number will be more like 70-73 percent.”

Arcade Mayor Doug Haynie pressed for settlement without mediation.

“The way I see this, we are about three percentage points off,” he said. “We need to try to settle this before it goes to mediation. The only winner in this will be the mediator.”

At the meeting on Aug 1, Joiner said the cities wanted to see the percentage based on population, as has been the practice in previous years. This would be a 60 percent-40 percent split.

But earlier this month the county proposed that it receive 63.3 percent, which is one percent more than the county is currently getting. The remaining 36.7 percent would be divided among the cities based on a formula that takes into consideration population, the tax digest and general fund expenditures.

The sales tax allocation that is currently in place was approved in 2002.

The formula used to determine what percentage of LOST revenue is negotiated after the latest census every 10 years, although the collection period continues indefinitely.

Most LOST distribution formulas are based on population – with larger cities and counties receiving bigger pieces of the sales tax revenue pie.

State law also requires that LOST distributions consider other factors, such as public services provided in an area.

LOST is different than SPLOST (Special Purpose Local Option Sales Tax).

While LOST is determined by counties and their cities for a 10-year collection period but is a perpetual tax, SPLOST is approved by voters for specific projects and funds are typically collected for four to six years.
Jefferson manager Ward said on Aug. 1, the cities had discussed the issue and agreed to propose a 53-47 percent split.

Bicknell said the county could not consider a 53 percent share.

“In the past the split has primarily been based on population, but now there are eight criteria to be considered,” he said.