L.O.S.T. in Translation: Blue Ridge Rejects County Offer in L.O.S.T. Negotiations

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Blue Ridge firmly rejected the county’s percentage offer in L.O.S.T. negotiations this week. Following the census, every ten years local governments parley percentages from sales tax revenue. As such, Fannin County, Blue Ridge, and MacCaysville started negotiations at the courthouse Tuesday to once again divvy up the tax. The process, however, started a little later than in most surrounding areas, where many near-by counties have already completed the process. Also, negotiations were not started in typical intergovernmental meetings, but in mediation, which is usually the second phase of the process.

At the beginning of Tuesday’s mediation, each party gave a brief presentation of its percentage request. Currently, the county receives 79 percent of sales tax revenue; Blue Ridge, 11.10 percent, and MacCaysville 9.9 percent. Speaking first, MacCaysvlle Attorney Alison Sosebee said her client should receive an increase, from 9.9 percent to 12 percent. Blue Ridge Mayor Donna Whitener also asked for a percentage increase, saying that Blue Ridge is the economic engine of the county, but did not give a specific number for the increase. Finally, County Commission Chairman Bill Simonds said he wanted to the percentages to remain the same as they are now.

Following the requests, Mediator Leslie Waycaster partitioned the parties into groups. The county group, with commissioners, city clerk and Attorney Lynn Doss went into executive session and the other group, including MacCaysville Mayor Thomas Seabolt, Alison Sosebee, Blue Ridge Mayor Donna Whitener, The Blue Ridge City Council and Blue Ridge Attorney David Syfan remained in open session, yet in a separate conference room. The county’s choice to enter executive session while the other groups remained in open session seemed to further exacerbate the county’s perceived transparency issues.

After some discussion, Blue Ridge Attorney David Syfan told Waycaster that Blue Ridge requests an increase to 30 percent, MacCaysville an increase to 12 percent (satisfying its initial request) and a decrease for the county to 58 percent. Syfan justified the request, saying that Blue Ridge is the financial driving force of the county. He went on to explain that 30 percent of the county’s labor force is in Blue Ridge and 25 percent of LOST revenue is due to tourism dollars and the Blue Ridge Train is one of the major tourist attractions in the county. Additionally, he noted Blue Ridge generates 70-80 percent of sales tax in the county. Chiming in, Mayor Whitener explained that approximately 95,780 people come to Blue Ridge for festivals each year. Whitener also said most businesses in the county are either located in Blue Ridge or MacCaysville, adding that Blue Ridge provides water to businesses outside city limits.

For her part, Sosebee argued 12 percent for MacCaysville was justified because the revenue generated in each city has increased in the last ten years. She said this is due to the train which leaves from Blue Ridge and makes a stop in MaCaysville. In addition to the train, she said MacCaysville’s revenue has increased due to two tubing-rafting companies that now operate within city limits. She also said the number of business licenses has increased from 167 in 2005 to 468 this year, 2012.

Waycaster brought the offer (presumably with the justifications) to the county side. With Waycaster as the emissary, the county then sent a second offer. According to the second offer, the county proposed Blue Ridge receive 12.25 percent, MacCaysville 10.25 percent, and the county receive the remaining 77.50 percent. The Blue Ridge-MacCaysville group, though, demanded documentation to justify the county’s new numbers. The county sent Waycaster back with a list of L.O.S.T. collections going back to 1999, which Waycaster said reflected a 10 percent increase. After reviewing the document, though, Sosebee said it was based on distribution, not collections.

“That’s not what each city has collected or generates,”

she said,

“They’re just saying there’s been a 10 percent increase over what has actually been distributed from 2000 to 2010.”

Some in the session quipped the list was a distraction from addressing the real issue, that Blue Ridge and MacCaysville are significant revenue generators worthy of higher percentages of tax revenue.

After the three-in-half-hour session, the county group came out of executive session and announced its offer, which had not changed from the second offer. The county said it requested Blue Ridge receive 12.25 percent, MacCaysville 10.25 percent and the county 77.5 percent. Blue Ridge rejected the offer and moved to continue negotiations at a later date

Although no set formula exists for L.O.S.T. negotiations, GMA (The Georgia Municipal Association) has established eight criteria that should be considered during the process: 1) Service delivery responsibilities compared to population served. 2) Service delivery responsibilities compared to resident population. 3) Existing service delivery responsibilities of each local government. 4) Effect of distribution change on ability to meet debt obligations. 5) Point of sale and use that generates tax. 6) Intergovernmental agreements between local governments. 7) Property/other revenues subsidize services provided to other taxpayers. 8) Any coordinated plan of county and city service delivery and financing.

During the first round of mediation, Blue Ridge and MacCaysville focused on number five, point of sale, emphasizing the two cities are the major generators of revenue for the county.

The parties have yet to schedule a second round of mediation.

FYN will follow this story as it develops.

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