Cleveland City Councilman Richard Banks

CLEVELAND, Tenn. - In separate meetings Monday, Bradley County commissioners and Cleveland City councilmen debated the merits of Chancery Court arbitration of a dispute over $689,980 in increased sales tax revenue.

City voters who approved a half-cent sales tax increase two years ago were told the money would go for capital projects, including street paving. But the county, based on a 1967 agreement on the division of sales tax collections, sued to collect part of that fund. The city contends that money belongs solely to Cleveland.

During a commission work session Monday, Commissioner Jeff Yarber suggested creating a resolution that rescinds some resolutions passed in 2009 and 2010 dealing with about $2 million in county funding for connector work at the APD-40 Bypass and Interstate 75 interchange at exit 20.

"If the city's not going to work with us, we can use the money for other things," Yarber said.

In March, the city balked at the county's offer of putting the almost $690,000 into a joint account from which litigation costs could be deducted and the rest used for future joint capital projects.

Commission Chairman Louie Alford and Commissioner Bill Winters urged Yarber to hold off on making the idea a resolution.

"We've got a few things going now," Alford reminded Yarber. He said he hopes for further talks over the next couple of weeks as city and county officials work on other joint projects.

Winters said he wants to discuss Yarber's idea more at next week's county work session.

Yarber agreed to wait until then.

But as an April 21 hearing looms on the sales tax debate, Cleveland City Councilman Richard Banks said he wants to delay the hearing to keep the "cloud" of the sales tax controversy from interfering with talks with the county over a merger of fire department services.

Banks introduced a resolution calling for "continued cooperation between the Cleveland City Council and the Bradley County Commission on jointly-funded obligations and continued cooperation in future joint projects such as the merger of the fire departments."

Cleveland councilmen approved the resolution 3-2. Banks, Charlie McKenzie and George Poe voted in favor of the measure while David May and Avery Johnson voted against it. Councilmen Bill Estes and Bill Robertson were absent. The county now must approve the delay.

Merger talks continue Wednesday as members of a joint task force meet, and Banks said the battle over sales tax money could cause other joint efforts to falter.

He said the tax money battle could distract from officials' reaching an accord at a joint meeting of the commission and council set for May 25.

May said more damage could be done by playing out the discord "in the media," adding the quicker the dispute was settled the better.

Contact staff writer Ben Benton at 423-757-6569 or bbenton@timesfreepress.com.