The Dunwoody City Council voted July 11 to defer entering into agreements with DeKalb County over its upcoming decision to possibly place a 1 percent Special Land Option Sales Tax and Equalized Homestead Option Sales Tax on the November ballot.

The county is asking municipalities to enter into intergovernmental agreements (IGAs) that outlines how money will be distributed if the E-HOST and SPLOST referendums are put on the ballot and approved. The county also is asking municipalities to approve a resolution to request the county call for a vote on the sales tax.

Councilmember Jim Riticher said he did not want to “go on record approving” the tax increase measures before the Board of Commissioners voted July 19 to put the referendum on the ballot.

Currently, the Board of Commissioners is split 3-3, according to Commissioner Nancy Jester, whose district includes Dunwoody.

The tax would be levied for five years unless all of the cities and county enter into an IGA to extend it to six years, explained Public Works Director Michael Smith. The council did approve unanimously at the July 11 meeting to spend 100 percent of any SPLOST funds received on transportation projects, such as paving, sidewalks, multi-use paths and intersection improvements. Smith said the city would receive approximately $7 million a year from SPLOST.

Should the commission approve putting SPLOST and E-HOST on the ballot on July 19, the City Council can call a special meeting or vote at its next meeting in two weeks to approve the IGA and resolution to ensure the city receives funding, said Councilmember Doug Thompson.

“I do not want to insinuate [by approving the IGA] that we would vote in favor of this” before the Board of Commissioners votes on it, Thompson said.

Mayor Denis Shortal disagreed and wanted to approve both measures.

“I just hope we don’t miss the boat. There’s no guarantee they [the county] will let us vote [at a later date],” Shortal said.

Brookhaven City Council voted to approve the resolution and IGA at its July 12 meeting. The city’s attorney and city manager said the city would receive no money if it did not support the referendums because the city is so young.

The Georgia General Assembly approved last session House Bill 215, which allows DeKalb County residents to decide through a referendum to adopt a SPLOST to fund capital projects, and to reform the existing Homestead Option Sales Tax (HOST) to create an E-HOST that would provide additional property tax relief to taxpayers.

SPLOST is a 1 percent sales tax. 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 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.

“This [SPLOST] takes DeKalb from 7 cents sales tax to 8 cents … and next year MARTA may be coming and asking for another one or two cents,” she said at the July 11 meeting.

For every $1 in SPLOST funding, Dunwoody receives about 7.5 cents, she said. But 75 cents of every dollar goes to the county for a “wasteful list” of projects, she said.

HOST is a 1 percent sales tax that generates approximately $100 million a year for the county. That money is currently split 80 percent for homeowner tax relief and 20 percent for capital projects. The E-HOST referendum would revise the spending to have 100 percent of the funding go to property tax relief.

Both E-HOST and SPLOST must be approved by voters for them to be enacted.

UPDATE July 16: A special called meeting of the Dunwoody City Council to reconsider SPLOST and E-HOST support is set for Monday, July 18, at 8 a.m. at City Hall. Dunwoody is the only city in DeKalb that has not voted to approve support for SPLOST/E-HOST.

From Councilmember John Heneghan’s blog on the special called meeting:

[SPLOST] & EHOST is a complex tax subject involving a raise in sales tax to offset homeowners taxes. The City of Dunwoody was told this measure might negatively affect a tax property freeze currently in effect and we are the last municipality to approve the County proposal needed for a six year deal. The City Council deferred the matter at our last meeting and based on what I currently know, I am still not in favor of this IGA and doubt that the City will approve.

The special meeting was called for Monday 8 am in order to try to understand all sides of issue prior to DeKalb County meeting on Tuesday. I believe we will have County and State representation at the meeting to raise various points both pro and con. The DeKalb Board of Commissioners could still go forward with a five year sales tax increase without Dunwoody’s approval but by all accounts the Commission is still deadlocked at 3 to 3.

Councilmember Terry Nall said he has learned from Bill Floyd, managing director of the DeKalb Municipal Association, that House Bill 596, which was designed to keep a property tax freeze in place, was approved last session with incorrect language and the county property tax freeze will be voided if the E-HOST and SPLOST referendums are passed. He issued this statement July 16:

Now that we have clear confirmation of erroneous legislative language (in HB 596) that makes our homestead property tax freeze disappear if the eHOST /SPLOST referendum passes, we should all be working to stop the referendum from being called by [the DeKalb Board of Commissioners] rather than spending our time on changing the distribution formula via an IGA.

We cannot rely on a promised legislative fix in January and simply hope it can be retroactive. The stakes for our citizens are too high to take this risk.

In my personal view, any city approving and/or encouraging the SPLOST resolution and companion IGA at this point, especially with the new information on HB 596 now known and confirmed, is putting its citizens last, not first.

Dyana Bagby

Dyana Bagby is a staff writer for Reporter Newspapers and Atlanta Intown.