Taxpayers fund duplicated services when their county taxes pay for services that their city taxes already provide.
The Cobb Board of Commissioners approved an agreement this week to dole out $50 million to Cobb’s six cities over the next 10 years.
While Chairman Tim Lee said commissioners and mayors spent almost three years hammering out an initial agreement ten years ago, he said the process this time around was completed in a series of meetings over the past six months.
“They were starting from scratch for an agreement to work off of, and there was disagreement at that time over what duplication of services cost,” Lee said of the previous agreement.
The plan passed this week worked off of what commissioners agreed upon under then-Chairman Sam Olens, adjusting the amount of money cities would receive for factors such as a cost of living increase, said county finance director Jim Pehrson.
Pehrson said the county would divide the $4.5 million payment the cities will split Nov. 1 by looking at how much each contributes to the property tax digest — the total assessed value of all taxable properties.
“If (the property digest) was $100 million and Marietta was $40 million of that 100, they’d get 40 percent,” Pehrson said.
The county will add $100,000 to the amount it pays back each year, making the final payment of this agreement a $5.4 million sum to be divided among the cities.
Lee said the need for such an agreement arose from the Legislature’s passage of House Bill 489 in 1997.
The bill, Lee explained, requires the county and its municipalities to come together every 10 years to produce an agreement ensuring taxpayers aren’t paying double for public services.
Acworth Mayor Tommy Allegood said one instance of overlapping services can be observed in county and city law enforcement agencies.
“Public safety would be a great example. You have the county police and then you have city police,” Allegood said.
“Whereas county police has jurisdiction in the city and there is some service that is being received, we want to be careful it’s not a full duplication of services and charges.”
Acworth’s share of the payment will be $400,000 this year, Pehrson said.
Pehrson said deciding just how much the county owes city taxpayers for service duplication can get complicated when looking at services the cities don’t offer, but don’t always use.
He used the example of the county’s bomb squad to illustrate the dilemma.
“Do you treat it like insurance, like you’re paying a portion of the cost of having a ready unit available?” he said.
Pehrson said another possible way the county could approach the cost would be to calculate each city’s tab based on exactly how much they used the service.
He said services such as the bomb squad, which supplements services the cities offer, are not included in the reimbursements the county plans to shell out.
“If we are enhancing their services in any way, that’s not a duplication of services,” Pehrson said.
Libraries, parks and transportation are among the other public services factoring into the final sum, which will come out of the county’s general fund, he added.
Kennesaw Mayor Mark Mathews said there were “no real drastic changes” to the agreement Cobb created 10 years ago.
Kennesaw will net just over $700,000 from the total payment in November, Pehrson said.
He pointed out that the county’s duplication of services were not uniform across the cities.
“There are some cities that have their own fire (departments), like Marietta and Smyrna, but we don’t have that,” Mathews said. “Those were all considerations when the agreement was put in place.”
Utilities are also part of the potentially overlapping services that influence the size of the reimbursements, he said.
Mathews said the money from the agreement will go straight into Kennesaw’s general fund to offset the property tax revenue needed to run the city.
Other counties have dealt with H.B. 489 differently than Cobb has, he said.
He used the example of Gwinnett County, which chose to lower city taxes by the value of duplicated services, instead of paying it back later.
Mathews said a ruling at the time of the last agreement indicated the approach may not be constitutional, so the county chose to allocate the money as a flat dollar amount calculated to match what the rollback in taxes would be.
Commissioner JoAnn Birrell said the county considered population growth and the increased demand on public services when making its decision to raise the $2.5 million in annual payments the cities received under the last agreement.
Birrell said the county would ask cities for “reporting and tracking” of where their share of the payments were going under the agreement renewal in order to increase accountability.
“We are asking for some way to measure the cost of the services they’re covering that we’re reimbursing them for so we can justify and account for the $5 million a year,” she said.
Allegood said the discussions that rendered the $50 million figure went smoothly.
“It was a very easy process,” he said. “We were renewing an agreement that was already in place. There was really a consensus between all the mayors and all the commissioners.”