Dunwoody City Council leaves SPLOST, E-HOST deferral vote as is

A special called meeting on Monday, July 18, by the Dunwoody City Council resulted in essentially no action and questions why the meeting was called in the first place.

Mayor Denis Shortal called for the meeting late Friday to reconsider the council’s  vote last week to defer action on entering into an intergovernmental agreement with DeKalb County on its proposed Special Purpose Local Option Sales Tax referendum and also approving a resolution supporting an E-HOST referendum.

The council deferred their actions to wait until after the DeKalb County Board of Commissioners voted on Tuesday, July 19, whether or not to put the sales tax initiatives on the November ballot. Reportedly, commissioners are deadlocked 3-3.

Over the weekend, local legislators and council members learned that should the SPLOST bill be put on the November ballot and approved, the current freeze on the county’s homestead tax exemptions would likely be voided.

State Sen. Fran Millar spoke at the July 18 meeting and took responsibility for the bad language of HB 596, a bill that was intended to keep the freeze in place and approved by legislators in the last session.

“I’m as much to blame as anyone … about why we have this mess, for lack of a better term,” Millar told the council.

But Millar said he was bothered by the decision to call the special Monday meeting in the first place after the council already voted to defer its vote on SPLOST and E-HOST. The E-HOST referendum would put 100 percent of its revenue toward property tax relief, rather than the current 80 percent.

“In light of what has happened in the last few weeks, you should be careful about your notices … and to get the word out better,” Millar told council members.

Millar also pointed out that he and DeKalb Commissioner Nancy Jester, who represents Dunwoody, have informed the council about problems with SPLOST and the council should not be reconsidering its vote because members heard a similar message from the DeKalb Municipal Association.

“Your commissioner who represents you asked you to do this [defer] and your state senator asked you to do the same thing … and then all of a sudden Bill Floyd [director] of the DeKalb Municipal Association says the same thing and it’s like Moses from the mountain,” Millar said.

Jester, who opposes the SPLOST, told the City Council, “I think you got it right at your last meeting.

“You showed you were not going to be bulled into a resolution and agreement … even without this freeze issue,” she said.

All the other cities in DeKalb voted to approve the IGA and resolution, she said.

“I’m glad you showed independence at your last meeting,” Jester said. “I think that is in the best interest for the citizens of Dunwoody, for the citizens of [DeKalb] District 1 and for the entire county.”

City Finance Director Chris Pike said HB 596 “has thrown a lot of confusion into the mix” about SPLOST.

The language in the bill can be changed so a tax freeze is left in place, he said, but that would have to take place next year.

He also explained that even without Dunwoody entering into an IGA with DeKalb County, the county can ask for a SPLOST referendum be put on the November ballot. Four votes of the Board of Commissioners are needed to do so.

However, if the Board of Commissioners is successful in getting a SPLOST on the ballot at its Tuesday meeting and Dunwoody does not have an IGA in place, the money the city would receive from the SPLOST would be based on 2010 U.S. Census figures rather than more current ones.

“Financially, it would be more costly [to the city] without an IGA,” Pike said. “If you have the IGA when the county calls for a vote, financially speaking, Dunwoody fares better.”

Pike said the City Council could again do what it has already done – defer its vote and insist the county pass the IGA first. The county is reportedly split 3-3 on supporting a SPLOST; a fourth vote in favor is needed for it to be put on the ballot.

Shortal worried a fourth vote in favor of SPLOST will happen, putting the penny sales tax on the ballot. He also argued that the city is putting itself at risk of losing more than a million dollars a year by not supporting the IGA.

“As we sit here, if there is a fourth vote that comes up on the Board of Commissioners and [SPLOST] gets on the ballot, it’ll pass. Then either way, the tax freeze goes away,” he said.

“If we don’t pass the IGA, the computations for SPLOST money goes back to 2010 Census figures. If we do pass, it goes to … the highest population between 2010 and 2015,” he said. Shortal said that savings for most homeowners in Dunwoody totals about $460 a year.

Millar told him that $470 a year will be lost because of property tax increases caused by the property tax freeze being voided.

“I’m telling you, if this SPLOST goes on the ballot, there’s a good chance the freeze is dead,” Millar said. “The city may win, but the taxpayers will lose.”

The council approved a motion by Councilmember Lynn Deutsch to ask Shortal send a letter to the Board of Commissioners asking the board to withdraw its request to put SPLOST on the November ballot at this time and to work with the legislature and cities to resolve tax issues.

Shortal made a motion to defer voting on authorizing the E-HOST and SPLOST resolution, but it died for a lack of a second because the council had already voted during its last regular meeting to do so.

Councilmember Terry Nall, who was not at the meeting, issued a statement.

“City Council already made the right decision last Monday. The new information on HB 596 about the wording error of the property tax freeze simply solidified our prior decision,” he said.

“Today’s special called meeting was unnecessary and should not have been called.”

SPLOST, a 1 percent sales tax, would be levied for five years unless all of the cities and county enter into an IGA to extend it to six years. The city would receive approximately $7 million a year from SPLOST if the sales tax is approved by voters.

The revenue from a SPLOST is to be used for capital improvement projects, such as transportation improvements, road resurfacing, facility improvements and new or expanded parks.

Jester told the City Council last week she is opposing the measures because, for one, she doesn’t support the county’s desire to spend $40 million of SPLOST funds to help finance a new government center that Interim CEO Lee May has said he wants built near the DeKalb Jail on Memorial Drive.

SPLOST funds would also be used to pave more than 400 miles of county roads.

SPLOST would generate $544 million for the county over five years, according to DeKalb County. Capital funding for Dunwoody over five years with SPLOST funds would be nearly $38.5 million. The City Council has voted to use all of its SPLOST funds for paving and transportation projects.