At Tuesday night’s meeting of the Winder City Council, a resolution passed that will allow the City to propose a new agreement for Local Option Sales Tax (LOST) distribution, end litigation over Service Delivery Strategy disputes with Barrow County, and call for a Transportation Special Option Local Sales Tax (T-SPLOST) referendum be added to the November ballot.
Winder City Council approved the Resolution unanimously with one member abstaining.
Local Option Sales Tax or LOST funds are distributed to jurisdictions based on a Certificate of Distribution that is signed by the County and local municipalities.
Historically the distribution percentages have been based exclusively upon population, which according to criteria set forth by the Georgia General Assembly, is not the only factor that should be considered.
The Georgia General Assembly has given eight criteria that should determine the distribution of the funds collected by the LOST to the municipalities.
According to Winder’s Mayor David Maynard, the Georgia General Assembly clearly states that population alone should not determine the sharing of this sales tax.
Maynard remarked, “The law states that the sales tax is intended to fund services required in commercial and downtown areas. It’s also intended to provide relief of property taxes to our homeowners.”
To reach an agreement on the LOST funds, Georgia law requires cities and counties to consider and attempt to resolve service delivery strategy issues and tax inequities for constituents.
“Our outstanding service delivery issues must be resolved in order for Winder to abide by Georgia law and provide justice to our citizens,” said Maynard.
Currently the City of Winder shares the one cent LOST with five neighboring municipalities and the County, all of which receive different percentages of the penny according to the 10-year agreement.
The most recent distribution certificate from 2012 to 2022 will expire December 31, 2022. The new agreement will need to be approved by December 30, 2022, to begin January 1, 2023. Failure to reach a timely agreement will result in the expiration of the sales tax. Loss of the sales tax will require a subsequent property tax increase or a reduction in services, or both.
City leadership attended meetings with the County and other municipalities on June 29, 2022, and July 14, 2022, to discuss the renegotiation of the LOST. An estimated $242 million would be generated by the 10-year agreement that would be in effect from 2023 through 2032.
The County recommends keeping the distribution of the LOST funds based solely on population of the unincorporated County and each municipality.
Winder Council members believe this application of the distribution doesn’t recognize the City’s daytime population, the inherent value of the City’s commercial districts, the cost of the services required to support the daytime populations in these areas and subsequent factors that align with the criteria set forth by the General Assembly’s statute which dictates LOST fund distribution.
In Tuesday night’s resolution the City Council set forth six requirements to the County that they believe will protect the interest of the citizens and utility customers in both Winder and Barrow County.
Currently millions of dollars of additional utility infrastructure is in the planning stages by Barrow County to supply water to serve high-density residential, commercial, and industrial properties which are already served by City water lines and have already been paid for by water system customers in both Winder and the unincorporated area.
Maynard said, “A new Service Delivery Strategy Agreement is vital for our residents and commercial utility customers to prevent unnecessary duplication of water services. The efforts to try and come to a satisfactory SDS agreement have been unsuccessful and has resulted in litigation and substantial cost to the City and County Citizens. It’s my job to look out for the best interest for our people and make certain that the services they are paying taxes to support are the services they are benefiting from.”
Mayor Maynard and Council went into Executive Session at 6:40 p.m. and reconvened at 7:12 p.m. putting the resolution out to the public and asking for a motion.
Maynard said, “Our council agrees it’s not right to have our residents paying a higher millage rate to Barrow County than unincorporated residents do with no added services or benefits with the proposed Service Delivery Strategy as it stands.”
To review a copy of the signed resolution, click to view the pdf below.
R-17-22 Resolution 2023 LOST Agreement
A text-only version of the Resolution is also provided below.
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE CITY OF WINDER, GEORGIA CALLING FOR ACCEPTANCE OF A NEW 2023 LOCAL OPTION SALES TAX AGREEMENT AND DISTRIBUTION CERTIFICATE WITH BARROW COUNTY, THE CITY OF WINDER AND ALL OTHER MUNICIPALITIES IN BARROW COUNTY; CALLING FOR AN END TO ALL LITIGATION OVER SERVICE DELIVERY STRATEGY DISPUTES AND AGREEMENT ON A NEW SDS AGREEMENT; CALLING FOR A T-SPLOST REFERENDUM; AND FOR OTHER PURPOSES.
WHEREAS, the Mayor and Council of the City of Winder, Georgia has determined that it is in furtherance of public good that the City of Winder, Georgia (the "City''), enter into an equitable Local Option Sales Tax ("LOST") Agreement and Distribution Certificate with Barrow County and its municipalities; and
WHEREAS, the City was notified by Barrow County of the commencement of LOST negotiations on June 29, 2022; and
WHEREAS, the City attended the meetings on June 29, 2022 and July 14, 2022 and communicated a will to reach an agreement based on the eight criteria to be considered for a LOST Agreement as set forth by the General Assembly of Georgia in State law code section 48-8-89; and
WHEREAS, the City understands that the Barrow County Operations Manager is recommending a LOST Distribution Certificate based solely on the population of the unincorporated County and each municipality without any consideration being given to those criteria set forth by State law, but the City is uncertain of the position of the Board of Commissioners on this issue; and
WHEREAS, the City has sought to protect the interests of its citizens and the interest of all County citizens and utility customers during the lengthy negotiations for a new Service Delivery Strategy ("SOS") Agreement by seeking to prevent unnecessary duplication of services and infrastructure within Barrow County; and
WHEREAS, a primary dispute in the SOS negotiations has been the attempt by Barrow County to restrict the City's use of the City's water system revenues which, if successful, will result in almost doubling the City property taxes paid by Winder citizens with no corresponding benefit to residents outside the City; and
WHEREAS, Barrow County is recently making efforts to spend millions of dollars to install unnecessary water lines to serve high-density residential, commercial and industrial properties which are already served by City water lines, and which have already been paid for by Winder water system customers; and
WHEREAS, Barrow County insists that City residents must help pay to build and maintain roads in the unincorporated County and in the City limits, even though unincorporated area County residents pay nothing to build and maintain City streets; and
WHEREAS, the City has continued these efforts to resist Barrow County's actions in related litigation filed by Barrow County against the City over the SOS issues resulting in substantial cost to both City and County citizens; and
WHEREAS, the City believes it is in the public's best interest to end future litigation costs to the citizens of both the City and County and to customers of both the City's and the County's utility systems; and
WHEREAS, the City believes it is in the public interest to give the voters of Barrow County the opportunity to vote on whether to fund road services with a Transportation Special Purpose Local Option Sales Tax ("T-SPLOST") in order to generate sufficient revenue to improve the road systems throughout Barrow County and all of the Cities in Barrow County; and
WHEREAS, the City believes it to be in the best interest of all the citizens of Barrow County that the City and County resolve these issues in a comprehensive manner so that both governments can move forward and work together to create a better community for all of Barrow County; and
WHEREAS, the City hereby indicates its official intent to agree a to new L.O.S.T. Agreement and Distribution Certificate and a new SOS Agreement consistent with the following conditions of this Resolution;
NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the City, and it is hereby resolved by authority of the same, as follows:
- The City will execute a L.O.S.T. Distribution Certificate between Barrow County, the City of Winder, and all other Cities in Barrow County beginning January 1, 2023 and ending December 31, 2032, provided Barrow County agree to and carry out the conditions set forth in sections two through six below:
- Upon execution of the LOST Distribution Certificate, Barrow County shall dismiss all litigation against the City of Winder related to Service Delivery Strategy Act issues and shall agree to not challenge either the City of Winder's current water and sewer rates or the City of Winder's right to transfer funds from its Enterprise Funds into any other fund of the City.
- Barrow County and the Barrow County Water and Sewerage Authority shall agree to serve only the parcels of land that are currently being served by their respective water systems based on the most recent SOS Water Service Area Map adjusted only for parcel clarification.
- Barrow County shall agree to create a Special Service District consisting of the area within the unincorporated County to provide road construction and right of way maintenance in the District and fund those services solely from property taxes, insurance premium taxes, assessments, or user fees collected in such Special Service District or T-SPLOST revenues, and relieve all municipal citizens from funding those services within the unincorporated areas of the County.
- Barrow County shall, simultaneously upon executing the new LOST Distribution Certificate, execute a new SOS Agreement consistent with the terms of this Resolution; and
- Barrow County shall, simultaneously upon executing the new LOST Distribution Certificate, call for a T-SPLOST Referendum to be placed on the November 2022 elections ballot.
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