What is the BID
Commercial and nonprofit landowners in the district will pay an annual assessment of 9 cents per square foot, of either the lot or building size, whichever is greater, plus $4.95 per linear foot of lot frontage. Residential property owners with townhouses or condominiums would pay a flat annual fee of $150 per unit.
The Hamilton County Commission's rescission of its agreement to collect the fee for Chattanooga's long-disputed Business Improvement District has created tension between the city and the county trustee.
County Trustee Bill Hullander appeared before the Hamilton County Commission on Wednesday to plead for the county and city to reach a new agreement on the collection of back taxes that the city verbally revoked after the BID agreement was reversed by the commission last week.
In the BID collection agreement passed in early August, the commission agreed to allow the trustee to collect around $1 million annually from the 196 property owners within the district designed to contribute toward safety and visual improvements to central Chattanooga, but that was reversed last week as commission members grew increasingly concerned about legal ramifications after a lawsuit was filed against the city to nullify the BID.
According to Hullander, this agreement also allowed the county to eliminate redundant fees for city residents who owe property back taxes.
"As you remember, I came to you weeks ago and told you that the city had asked me about doing the BID collections and I said basically I'm not interested in that, but I'd like to make a package deal," Hullander told the commission on Wednesday. "So the city and I agreed to that."
In this "package deal," Hullander says he agreed to collect the controversial BID fee on property tax bills and the city agreed to allow the county to exclusively assess back tax fees from residents in the city, which would cut down on redundant fines for residents.
Buildings inside the Business Improvement District are seen April 16, 2019, in Chattanooga.According to the trustee, the agreement would levee a single fee that includes late fees, mailing fees, title search costs and other fees. Those fees are currently applied twice - once by each government body. The governments would then split the 10% legal fee 7-3 between the city and county, saving those who owe back taxes hundreds of dollars and providing about $60,000 to the county to cover collection expenses.
"My proposal to the city is to let us handle everything, eliminate a lot of problems, let these people pay only one time. We will put it in the paper, we'll do the title search, we'll do whatever needs to be done," Hullander said. "And of that 10%, we'll give [the city] 7% and we're only going to keep 3%."
The trustee later added that in negotiating a similar agreement over the past two years, he originally requested the keep 6% for the county and give the city 4%. Most recently, the city asked for 8%, leaving the city 2%.
Hullander's pitch did not center on revenue, but rather leaned on the commission to support county residents in need.
"It's about helping poor people - I wish you could see some of them who are in bad shape already [before they pay back tax fees]," Hullander said. "This is what we're wanting to fix. Whether it can be fixed or not, I don't know."
Hullander said that after the "big surprise" last week when the county reversed the BID agreement, the city attorney said the "deal is off."
Hullander said most people who fall behind on taxes do so because of hardship and shared the story of a 90-year-old woman who gets just $9,600 in income annually and was kicked off of the tax-relief program for falling behind on last year's taxes. She will be subject to the redundant fees when she goes to the clerk and master's office, he said.
At the meeting, Hullander offered to pay out of pocket to host a lunch meeting between the city council, county commission, city treasurer's office, both attorneys and both mayors to discuss the back tax issue. County Attorney Rheubin Taylor said a meeting was possible, but that the issue probably "starts" with Chattanooga Mayor Andy Berke.
The trustee's plan was met with positive feedback by commissioners.
"That sounds like a really benevolent plan, Bill, and I appreciate you bringing it to us," District 8 Commissioner Tim Boyd said. "There are times when lots of us have financial issues, and I appreciate you looking into this as much as you have. I was certainly unaware of it."
Still, Hullander said he "dropped the ball" by not better explaining the two fee collection agreements to the commissioners.
District 6 Commissioner David Sharpe asked if the issue would go away if the commission were to reinstate the agreement, to which Hullander said he believed it would. For the county to reconsider a passed resolution, the prevailing side (those against doing the collection), would have to bring it back to the commission.
Hullander also said he had a meeting with a council member on Tuesday to plead for them to maintain the back tax agreement.
"I told him, 'Sir, this stuff has gotten out of control. It's not about me. It's not about the commission. It's not about you. It's about the people,'" Hullander said. "But I don't know what the city is going to do."
Hullander did not identify the council member to whom he spoke, but he did refer to the council member with male pronouns including "he" and "sir."
Of the seven male council members, only two were immediately available for comment Wednesday.
District 7 Councilman Erskine Oglesby, who serves as chairman of the city council, a River City Company board member and co-sponsor of the resolution to form the BID, said he was not familiar enough with the situation between the city and Hullander to feel comfortable commenting.
District 4 Councilman Darrin Ledford, who had been in conversation with the county about the earlier version of the agreement, told the Times Free Press that the two bodies should meet to discuss the tax collection issue.
"I believe the goal of government should be to work together in providing the utmost of services," Ledford wrote in a text message late Wednesday. "I welcome a joint meeting to discuss the best options for taxpayers and to see their best interests served outside of any political battles."
City Attorney Phil Noblett was not immediately available for comment.
The city council will vote on allowing the treasurer to assess the BID fee Tuesday.
Contact Sarah Grace Taylor at 423-757-6416 or at staylor@timesfreepress.com. Follow her on Twitter @_sarahgtaylor.