COVINGTON -- City officials recently agreed to hire a consultant to guide them through arbitration if an agreement can't be reached with the county during soon-to-get-under way negotiations over the distribution of the Local Option Sales Tax.
Georgia law has changed to allow arbitration when parties can't reach an agreement during LOST negotiations. Previously, counties were allowed to divvy up the revenues based on population, even if city officials did not agree.
LOST renegotiations are required within two years of each decennial census, putting the deadline at July 1 of this year. The Board of Commissioners intends to call for renegotiations at its Feb. 21 meeting. The distribution reached during negotiations is binding for 10 years.
"We feel very confident that we would qualify for a larger percentage, but you don't know what would happen if we go to arbitration," said Randy Conner, grant writer for the city. "We would prefer to stay away from that because it is an expensive and time-consuming endeavor."
Given the change to state law, the Georgia Municipal Association is recommending cities hire a consultant before entering arbitration. The City Council gave approval to that recommendation at its Feb. 6 meeting.
Currently, 75 percent of LOST revenues go to the county, followed by Covington at 18.95 percent. The city of Porterdale receives 2.84 percent; Oxford receives 2.2 percent; Mansfield .54 percent and Newborn .47 percent. The distribution is based on population.
However, City Manager Steve Horton said the majority of revenues generated takes place in the city of Covington, resulting in more crime, trash and litter pickup, and more impact to public safety resources and roadways.
According to County Manager John Middleton, LOST collections have averaged about $870,000 per month during the current fiscal year. Should that trend continue, collections would be a little more than $10 million annually, he said.
Local governments have 60 days to renegotiate; if that fails, they are required to undergo non-binding arbitration, mediation or an alternative dispute resolution process, according to the Association County Commissioners of Georgia.
If an agreement still can't be reached, the matter can go before a Superior Court judge for binding arbitration. The involved parties can submit a "best and final offer" to the judge and the judge will approve one of the offers without modification.