The Ringgold City Council has declined to help fund part of the Costco Wholesale development on Cloud Springs Road, at least for now.
On Monday, the City Council voted not to participate in the funding system that Catoosa County leaders had set up to pay for the project. Ringgold Mayor Joe Barger said Council members acted on advice from city attorney Jim Bisson.
Mr. Bisson told the group it might not be legal to move sales tax funds to contribute to site preparation as planned in an intergovernmental agreement that Catoosa County commissioners approved Friday, Mr. Barger said.
Under the agreement, Ringgold, Fort Oglethorpe and Catoosa County were to contribute money equal to each entity's expected share of the sales and property tax each would receive from Costco. The money would go toward paying off the $4.5 million loan needed to prepare the warehouse club's site.
Mr. Bisson could not be reached for comment Wednesday afternoon.
Mr. Barger said the vote was not a reflection of the Ringgold council's opinion on the forthcoming Costco.
"Nobody's against the development coming in. That's not the issue," he said.
Catoosa County Attorney Chad Young said he had discussed the system with Mr. Bisson and the two have a difference of opinion in how sales tax funds can be used. He said he was surprised by Monday's vote.
Mr. Young said that, even if the city cannot move the money directly from the sales tax pot, it certainly could transfer the money from its general fund after the sales tax is absorbed into the budget.
"It's something that can be worked out," Mr. Young said.
Because the Costco will be in Fort Oglethorpe, Ringgold would receive a only small percentage of the local option sales tax it generates and no property tax, so its contribution to the development would be small, Mr. Young said.
He said even if Ringgold completely opted out of the agreement, it would not kill the deal but would place "a little more of a burden" on the county and Fort Oglethorpe.
"It's not going to hold up the project," he said.
Mr. Barger said the laws may need to be changed or clarified in order to allow such funding in the future.
"The legislators need to be talked to, and I'm willing to do it," he said.