After eight hours of mediation last week, the city of Dalton, Georgia, and Whitfield County apparently are no closer to finding common ground on an agreement over government services before the Oct. 31 deadline.
Without an agreed-upon strategy, Whitfield County could lose its qualified local government status — a state designation that ensures that municipalities don't duplicate services — and potentially miss out on millions in state and federal grant funds.
Dalton Mayor Dennis Mock said although the talks went well, all parties walked away from the table without an agreement after the two sides disagreed on a handful of terms.
"We agreed to leave most of the terms where they were or made small changes, but once we got to some of the heavy lifting, the mediation broke down," Mock said. "We got to an impasse we didn't think we'd get over."
Whitfield County Commission Chairwoman Lynn Laughter said the two sides are "further apart than where we were when we first started."
"It was very frustrating," Laughter said.
Former Georgia Supreme Court Justice Norman Fletcher served as mediator of the day-long negotiations. Fletcher made all parties involved sign an agreement that doesn't allow any of them to talk specifically about what was or was not agreed to.
Laughter said one proposal by the city was "the poison pill" the county couldn't agree to.
"I don't think any county commissioner in the state would have gone for it," she said.
"Of course I'm disappointed and hoped we could work it out," Mock said. "This doesn't mean I've given up hope. I'm still trying to talk with a few of the commissioners and see where the rub is."
HOW WE GOT HERE
The Dalton City Council believes city residents have paid $4 million in taxes since August 2018 that should have been paid by Whitfield County residents.
Last week's mediation focused on how local government pays for shared services such as public health services, sewer, fire service, public housing, law enforcement and dozens more.
Council members believe city residents have paid for services that are provided by the county to mostly county residents.
For at least a year, the city of Dalton has wanted to renegotiate the document known as a service delivery strategy — an agreement among municipal and county governments to fund mutual services that benefit all county residents.
It's the city's stance that Dalton "appears to be funding more than 45% of [the] county's property tax revenues despite representing 32% of [its] population."
County commissioners believe the city is asking for too much, especially after the county agreed to give up 22% of the county's local option sales tax in 2012 to the city.
That cut the county's share from about 83.2% to 69.5%.
Laughter had just been elected chairwoman of the county commission when that deal was made, and she believes the city got too much.
Now, it's asking for even more.
WHAT'S ON THE TABLE NOW
Dalton City Administrator Jason Parker sent a letter to the Times Free Press written by the city's attorney, Andrew Welch, on Tuesday that had a list of seven proposals that the city wanted out of the negotiation.
Laughter said neither she nor anyone at the county had seen the letter until it was shared with her by a Times Free Press reporter.
Parker said the letter was supposed to be sent to the county on Oct. 18 but there was a "miscommunication about the delivery of the letter."
After finally reviewing the letter, Laughter said most of the proposals were "totally unacceptable."
"This is not happening," she said. "They know that."
Laughter and the Whitfield County Commission's main beef is that the city is asking for another 10% of the county's local option sales tax, or LOST, distribution. That would increase the city's share to 45% and lower the county's to about 59%.
That distribution would be locked in for another 12 years, eliminating the need to renegotiate the LOST agreement in 2022.
Laughter estimated that distribution change would cost the county about $3.5 million a year.
The city wants to stop paying $2.2 million for three departments that city residents don't use, and instead have those costs covered by the county: the county's engineering department, the maintenance and operation of the county's Parks and Rec department and $250,000 in administrative, human resources and finance costs.
The city is also willing to take over operation of the Dalton Convention Center in 2020, but would want the county to forward its current and future hotel and motel sales tax revenue to continue funding the Convention and Visitors Bureau for tourism marketing on the county's behalf.
Laughter said that it's much easier for the city to do that than the county.
"The city gets about $1.5 or $1.6 million a year from that tax. The county only gets about $200,000," she said. "The city can pay off their deficit and have $1 million left over."
The city is also asking the county to pay half of the $4 million in delayed or deferred capital improvements from years' past.
Right now the city and county share ownership of the facility.
There is a clause in the proposal that says if the city sells the facility down the line, the county would receive a portion of the proceeds over a five-year period.
The city has also proposed to take over and provide its own building, permitting and stormwater inspections, which Laughter said she and the commissioners would be in favor of.
WHAT HAPPENS NOW?
With the Oct. 31 deadline looming, the city and county continue to negotiate while the smaller cities in Whitfield County — Tunnel Hill, Varnell and Cohutta — have all sided with Whitfield County and want to wait until 2022 to negotiate the local option sales tax agreement.
Litigation is still possible, Mock said.
Laughter said she hopes the two sides could find a solution or ask for another extension from the state.
Contact Patrick Filbin at email@example.com or 423-757-6476. Follow him on Twitter @PatrickFilbin.