Posted: Thursday, August 22nd 2013 at 9:13pm
Hall Commissioners approve SPLOST suit settlement
By Jerry Gunn Staff
GAINESVILLE - Hall County Commissioners got the word from County Attorney Bill Blalock Thursday night that the lawsuit filed against the county by the City of Gainesville over Special Purpose Local Option Sales Tax (SPLOST) receipts appears to be almost over.
Blalock said a proposed settlement was worked out between the city and county attorneys and finance staff.
“I think we have come to terms on the settlement,” Blalock said. “I will be drafting a settlement agreement to include the terms.”
According to Blalock basically the terms are that the county will pay the city an additional nine payments totaling $5,343,750.
“We have come to terms basically by agreeing to pay the nine remaining payments which were to be made in 48 months and to immediately begin billing the city based on projections on the overage that it appears they’re going to owe us.”
Blalock said with the nine additional payments the county would pay the city $28,500,000. Based on projections the city’s share at the end of six years would be an estimated $22,500,000.
“So we have broken out over the next 24 months equal payments for the city to pay back to the county and those payments will total $250,692 a month,” Blalock told commissioners. “Those payments will accrue an re-allocation charge of 2.25 percent totaling around $800,000. So at the end of the 24 month period, or the end of the SPLOST, it’s estimated they will owe us $6,016,616 with the allocation fee added.”
Blalock recommended that the Commission pass a motion to authorize the Chairman to sign off on the settlement agreement once it is finalized and prepared for both the city and the county. That motion passed unanimously.
“I do not expect these figures will change and they appear to be a fair way to resolve our differences,” Blalock said. “Both the city and the county, once it’s executed, will dismiss their claim and their counter claim and end the litigation.”
Gainesville filed suit against the county in early February claiming the County backed out of its agreement to provide SPLOST VI funding for the $20-million Public Safety Complex on Queen City Parkway.
Mayor Danny Dunagan said the county still owed the city nearly $6-million. When he announced the law suit the Mayor said when the city built the complex it asked the county if it could get SPLOST proceeds ‘up front’ so the facility could be paid off in four years to save close to a million dollars of bond interest and the county agreed.
The county contended in its defense motion there was no breach of contract, claiming the county paid the city based on actual, not anticipated collections, which dropped because of the economy. Total projected six year SPLOST collections were anticipated to reach $240-million but dropped to a projected $152-million.
Chairman Dick Mecum said the settlement was at best a ‘wash’ and it has to go back before Judge Mills for a final approval and decision. Mills is the visiting judge who heard the case.
“We’re about to close it up,” Mecum said. “There’s been a lot of discussion between the attorneys and the finance departments and they’re about to wrap it up. Otherwise we wouldn’t be talking about a settlement agreement.”
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