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City, county settle on tax, water deals

Mediation leads to agreements

POSTED: October 27, 2012 9:00 p.m.
 

Forsyth County and the city of Cumming joined together Friday morning to resolve some longstanding disputes.

Both governments approved agreements on a new water contract and a split of the local option sales tax, or LOST, both of which would have hit deadlines in a few days.

The city council unanimously approved both agreements.

The county commissioners voted 4-1, with Todd Levent opposed, to approve the LOST agreement, and 4-0, with Pete Amos recused, to approve the water contract.

County and city entered mediation on both issues nearly two weeks ago, intended to finalize an informal water contract deal reached in late May as the previous one expired and to meet the state required process for determining a sales tax split.

Cumming Mayor H. Ford Gravitt said in the joint meeting Friday that the mediator, former Georgia Chief Justice Norman Fletcher, said the county was receiving “a great deal from the city” on both agreements.

“This has been a long, drawn-out process,” Gravitt said. “I think the role of leadership by these two boards is having the ability to compromise, and certainly I appreciate we both have compromised. What’s in the best interest of Cumming, Georgia, is also in the best interest of Forsyth County.”

He asked the two sides to put “any hard feelings” behind them and move forward.

Forsyth County Commission Chairman Jim Boff said on the LOST split, each side had found information to justify “markedly different” percentages.

“This is simply the best way to take the unknowable elements out of the decision,” Boff said of the deal.

The 1-cent sales tax, according to the agreement, will take a “phased approach” in the distribution of the revenue, said Forsyth County Attorney Ken Jarrard.

For the first five years of the 10-year sales tax, Forsyth County and Cumming will maintain the current split in which the county receives 85 percent of the collections and the city 15 percent.

From 2018 to 2022, the split will change to 87 percent and 13 percent, according to the agreement.

The county and its cities, in this case only Cumming, must agree on a percentage split of the revenues from the 1-cent sales tax, which is often based on services provided by each government.

The two had until Saturday to reach agreement through mediation, and then the matter could go to a Superior Court judge to select one of the two proposals.

The current 10-year LOST expires at the end of year.

The water contract will also run for 10 years, with two 10-year options to renew if triggered by Forsyth County.

The previous contract expired in late May, but the two couldn’t formalize the terms into an agreement.

Months later, Gravitt set a deadline of Oct. 31 to sign a contract, or the city would stop sales of untreated water to the county.

Forsyth has a permit from the Georgia Environmental Protection Division to withdraw water from Lake Lanier, but no means to do so.

As a result, the county purchases both untreated and some treated water from Cumming.

In the new agreement, the county must buy 400 million gallons of treated water per year from the city at a cost of $2.43 per 1,000 gallons, which will be adjusted each year to the consumer price index.

The amount of the required purchase decreased from about 1.6 billion gallons per year, but the rate is the same as the start of 2012 in the previous agreement.

For untreated water, the county will pay 50 cents per 1,000 gallons for purchases within or above its permitted amount, which will be adjusted annually to the consumer price index.

The county is permitted to draw 14 million gallons per day, or mgd, on average monthly, with a 16 mgd maximum.

According to the new agreement, the city will also make available 3.5 mgd on a monthly average, with a 4.1 mgd daily maximum.

Currently, Forsyth pays about 10 cents per 1,000 gallons, but can only buy within its permitted limits, and must otherwise purchase treated water at the higher price.

The new agreement is estimated to save about $9.5 million over 10 years in operating costs when compared to the previous contract, said Tim Perkins, county director of water and sewer.

In the first few years, Perkins said the county will save about $1 million, but the savings go down over time as the cost of water increases.

“I won’t say our rates won’t have to go up,” he said, “but [this contract] won’t be the cause.”

Also, the agreement requires Forsyth County to pay about $11.4 million to Cumming as a contribution toward the prior construction of the city’s expanded intake.

In addition, the governments must cooperate in requesting permits from state or national agencies, and Forsyth County will be responsible for its own future capital upgrades, which will then be deeded to the city for maintenance.

Boff said he had hoped the county could become “water independent,” but he believes too many “regulatory hurdles” will prevent that outcome any time soon.

“I have now concluded that the most prudent and responsible approach is to secure a water agreement with the city of Cumming that accomplishes the goals of flexibility, cost savings and water security,” he said.

Along with the LOST and water agreements, the governments each approved a contract for three road projects.

The county will contribute $3.5 million to the work, which the city will manage, to: extend Lanier Parkway to Pilgrim Mill Road, improve the intersection at Bald Ridge Marina Road and Market Place Boulevard and add an eastbound lane on Kelly Mill Road from Tolbert Street to Hwy. 20.

The work must be completed by the end of 2014.

Jarrard said the agreement was “instrumental” in securing the LOST deal.

The road work deal, which passed unanimously in both the board and council, will be a benefit to the county for both traffic control and helping bring in businesses, and in turn property taxes, commissioner Todd Levent said after the meeting.

Of the water contract, Levent said it “isn’t the best deal we’d like to have,” but it won’t require the county to raise rates and is favorable to the county residents.

He cast the only opposing vote to the LOST deal, stating afterward: “I just didn’t have the same comfort level they did.”

Commissioner Patrick Bell said with both the LOST and water contract disputes, the mediator made it clear to the county that going to court would be a difficult sell.

“To think that you’re going to get the city to sell you water at cost is — forgive the pun — a pipe dream,” Bell said, summarizing the mediator’s advice. “The city had the water, and they were in the driver’s seat. Court would not be, in his mind, any benefit to any position we were trying to take.”

On the matter of the LOST split, Bell said the mediator suggested the county would need to prove “a drastic change” in services had occurred to justify a major change in the percentages received.

With only minor adjustments to the service delivery strategy, also approved unanimously Friday, he said the effect on costs to provide those services from either government will have little change.

 

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