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Official: Bigger share for city
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Forsyth County News

Other action

Also at a work session Tuesday, Forsyth County commissioners:

• Reviewed separate water proposals for treated and untreated water to be sent to the city of Cumming, with final approval set for May 4. Commissioners Brian Tam and Patrick Bell opposed the measures.

• Decided not to proceed with a proposal to place a private cell tower on county property at Sawnee Mountain Park.

• Approved a contract to buy a 1.27-acre property on Mars Hill Road adjacent to the planned Fowler Park. The county will pay $53,000, with money coming from its $100 million parks, recreation and green space bond.

• Extended through the end of 2011 the social services committee, which works with the county to enhance public awareness, funding and communication with local organizations.

• Note: All votes were 5-0 unless otherwise noted.

-- Alyssa LaRenzie

According to one Forsyth County commissioner, the city of Cumming is getting a higher percentage of sales tax money than expected.

Current 1-cent sales tax projections show the revenue from the voter-approved initiative will reach about $130 million, Forsyth County Commissioner Brian Tam said.

The projections, which reflect the sluggish economy, are about $30 million below the initial estimated minimum over the full five years of the program.

By Tam’s calculations, the lower amount means Cumming will receive a higher percentage of the money — as much as 14 percent, or $18.1 million, when all figures are considered — than either side had proposed.

While that doesn’t translate into more overall money for the city than projected, Tam brought up the sales tax percentage situation Tuesday during discussion of a water proposal. A previous water contract situation landed in litigation.

In particular, he cited the $10 million the county gave Cumming for an aquatic center and $2.5 million for city construction projects as part of the 2008 settlement. The lump sums were paid up front.

But Commissioners Jim Harrell and Charles Laughinghouse view the figures from the settlement differently.

“You can take the numbers and do whatever you want with them,” Harrell said. “The $10 million that we had for the aquatic center was used exactly for that purpose. The neat thing is now the city has to operate it.”

The sales tax negotiations of 2007-08 were contentious.

As in the past, the city and the county had to divide the money from the special purpose local option sales tax, commonly known as SPLOST.

But municipal leaders felt the city should receive more than a population-based cut of 4.29 percent, or about $12 million, that could only have been used to build a parking deck.

The city received 15 percent of the revenue from the previous sales tax.

Voters overwhelmingly approved the sales tax extension in February 2008 as the governments headed to court.

The eventual settlement, which a judge deemed necessary to preserve the tax, gave the city 4.29 percent of tax revenues as they come in, plus the $12.5 million for the aquatic center and other projects.

At the time, projections showed the tax could take in between $160 million and $275 million.

By Tam’s math, that would have given the city anywhere from about 12.1 to 8.8 percent of the total money, when the $12.5 million is included, with the percentage falling as the collections went up.

With the current projection, the city stands to receive closer to 14 percent, or $18.1 million, of the $130 million total when all figures are considered.

As Tam sees it, the city’s 4.29 percent share of the projected $130 million in sales tax funding will amount to about $5.6 million. When added with the $12.5 million, the city’s share becomes about $18.1 million.

By comparison, if the tax program had brought in $275 million, the city stood to receive $24.3 million, or 8.8 percent. At $160 million, the city would have received $19.4 million, or 12.1 percent.

“That’s not at all what we expected,” Tam said. “But the reason we got there is because we wouldn’t negotiate.”

Harrell doesn’t add up the numbers in the same fashion, saying the county had planned to build an aquatic center anyway.

By not including the $10 million aquatic center figure, for example, it appears the city would receive about 6.2 percent, or $8.1 million, of the projected $130 million in total sales tax revenue, based on current projections.

Laughinghouse, who chairs the commission, said the settlement allowed a compromise so the sales tax could move forward.

“As far as I’m concerned, we could have appealed and we could still be fighting that out in court,” he said, adding that the settlement has worked out “fine.”

The city had some money for an aquatic center left over from a previous sales tax collection, he said, but needed additional funding to move ahead with the project.

From his standpoint, the $10 million — which came from the county’s voter-approved, $100 million parks, recreation and green space bond — also wasn’t included in his interpretation of the city’s share.

The $12.5 million aside, Tam said that a state law allows a sales tax to be extended from five to six years when entities enter into an intergovernmental agreement.

If the city and county had negotiated an amount outside of court, he said, the county would have been able to issue bonds on the extra year projection of $26 million and use that money on several proposed projects.

County commissioners held a special meeting in February to repriortize and eliminate projects, since the expected revenue likely will fall well short of expectations.

The county plans to use its sales tax funding almost entirely for road improvement projects.

“By refusing to negotiate with [the city], it cost a year of SPLOST, money up front and money in the long run,” Tam said.