Decatur City Manager Peggy Merriss writes in the “Budget Message” (see page 8 ) to the City Commissioners that the city believes the Georgia Supreme Court will make a final ruling in City of Decatur et al. v. DeKalb County next month.

For the uninitiated, the HOST dispute revolves around DeKalb County cities believing that the County has unfairly distributed sales tax proceeds established under the Homestead Option and Sales and Use Tax agreement in 1997.  Four DeKalb cities – including Decatur – sued the county way back in 2000.  This will mark the third time the case has been ruled on by the Georgia Supreme Court.

Over the years, the money under contention has really added up, with Decatur stating as recently as February 2011 that it was owed over $10 million from the county in HOST money for capital improvements.

Back in February when the case was argued before the Supreme Court, some of you expressed doubt that the County could pay the City of Decatur and other DeKalb cities, tens of millions of dollars if they lost the suit.  However, the City Manger’s note says this…

Should the litigation be resolved in the City’s favor, we would anticipate receiving significant funds for capital improvements by 2013.

What would Decatur do with $10 million for capital improvements?

The Decatur City Commission is set to vote this evening on City Manager Peggy Merriss’ proposal to repurpose the remaining $3.6 million in bond funds tagged from public works to the Decatur Recreation Center and “to authorize the City Manager to develop a financing package for additional capital improvement needs.” (The City Commission is also scheduled to hold a work-session on “Capital Improvement Options” at 6:30p, prior to the city commission meeting.)

In her letter to the commission (page 19 of the materials PDF), City Manager Peggy Merriss reflected on why projects ended up costing more than the original estimates, and recommended approval of the item.

As part of each project, significant public input was included to define the needs and desires of the community.  As master plans were developed, recommendations were made to develop long-term solutions to address facility needs instead of making short-term renovations and repairs.  This resulted in investing more of the bond funds in the projects that have been completed in order to assure that we were constructing high-quality facilities and making improvements that would be an asset to the community.

…”It is recommended that the City Commission approve moving forward with financing improvements to those three facilities [Public Works, Rec Center, Fire Station #1] in order to take advantage of existing competitive construction prices and a highly favorable capital market.  In addition, if the projects are not completed, it is quite possible that costs will be incurred for significant non-budgeted maintenance activities.  By making these capital improvements at this time, we will continue to support the desirability of the City of Decatur as a well-maintained community, we will see significant improvement in energy and utility costs and current and future budget estimates indicate that based on conservative assumptions, improvements can be made without a millage rate increase.

In case you missed it, the city told the AJC last week that the way to fund these projects without a millage rate (tax) increase was to pay for it using reserve funds until the HOST issue with DeKalb was resolved, and then use that nearly $1 million a year in new sales tax revenue to pay off the bonds.

The Dunwoody Crier is reporting that DeKalb County has again won a round of the Homestead Option Sales Tax legal dispute with its cities at the Superior Court level.

The multi-million dollar tiff has been dragging on for over a decade, sustained during the present day on DeKalb’s revised claim that the original agreement between DeKalb County and its cities was “unconstitutional” because it “didn’t require the cities to perform any specific services for the county”.

In the world of legal oddities and the influence of cold-hard cash, DeKalb County is attempting to find themselves in the wrong for entering into an unconstitutional agreement with Decatur and its other cities.   Apparently any potential public image problems with repeatedly claiming you didn’t know what the heck you were doing go out the window when millions of dollars of delicious capital improvement money is at stake.

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On Monday, the Georgia Supreme Court ruled in favor of Dunwoody in one of the two outstanding HOST lawsuits pending between DeKalb County and its cities.

That very same day I wondered “What’s that mean for the other big HOST lawsuit, Decatur vs. DeKalb?

Welp, the AJC’s April Hunt was good enough to go out and look into it.

Officials in those cities were greatly encouraged by Monday’s ruling. As part of the decision, if the cities lose their challenge against the county they are entitled to the same deal as Dunwoody: a direct disbursement from the state Department of Revenue before it sends money to the county.

“It’s definitely an insurance policy for the cities,” Decatur City Manager Peggy Merriss said. “It’s very helpful to the position the cities have taken all along, that we are owed this.”

The problem is new bills could cripple the county, which never put any of the disputed HOST funds in escrow. It does not have the funds ready if it loses the ongoing suit with the other four cities.

The article even references the HOST hearing that the City Manager was attending when she replied in a quick note to me Monday.  That hearing – before DeKalb County Judge Mark Anthony Scott to determine HOST’s constitutionality at the Supreme Court’s direction – will result in a ruling some time later this year, according to the article.

And then what?  Why another appeal of course!

UPDATE: It’s fate!  City Manager Peggy Merriss responds to a DM inquiry on the Dunwoody HOST ruling…

I’m actually in HOST hearing right now. [City Attorney] Bryan Downs has mentioned it so hopefully it helps.

From a GA Supreme Court Press Release…

Note: This isn’t the HOST lawsuit that Decatur and three other DeKalb cities brought against DeKalb.  However, I’m currently trying to determine how this ruling might affect HOST distribution to DeKalb’s other cities, who have been fighting for 10 years for their fair share of Homestead Option Sales and Use Tax.

DEKALB COUNTY V. PERDUE ET AL. (S09A2016)

The Georgia Supreme Court has upheld as constitutional a 2007 amendment to the Homestead Option and Sales Use Tax Act (HOST). The amendment opened the door for the newly created City of Dunwoody to start receiving HOST money, sparking a lawsuit by DeKalb County against Gov. Sonny Perdue and the state Revenue Commissioner, challenging the amendment as unconstitutional.

But in today’s unanimous opinion, Chief Justice Carol Hunstein writes that the amendment “is not unconstitutional or illegal for any of the reasons set forth by appellant.”

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OK, admittedly there are a lot of things I don’t understand. One of them being the inner workings of the Georgia Supreme Court. But what’s the deal with the HOST sales tax ruling for “City of Decatur vs. DeKalb County”?

Why is it when I check out the Opinions and Summaries Page on the GA Supreme Court website, that every single date through the first court date in May have a copious series of opinions, while April 14th (the date the HOST case was heard) has just one opinion?

Why have all the April 21st and May 19th rulings already been decided, while April 14th opinions have yet to be delivered? What the heck are we waiting for?

Feeling the crunch after getting your latest property assessment from the county? ( I know I am) Well then Decatur residents, you should be following this story very closely.

DeKalb County and its cities will again do battle before the State Supreme Court today, as the dispute over the disbursement of the 1 cent sales tax continues into its 7th year.

The story behind this case is long and complicated, but exceedingly important to citizens of Decatur. The AJC article is a good summation, but I’ll hit the high points in case you don’t want to click over there.

Back in 1997, residents in DeKalb voted in favor of a 1 cent sales tax hike to ease property taxes. 20% of that $ was to be used for capital improvement and the county and its cities agreed to share it. All was dandy until the county decided it didn’t like that idea and reneged on the agreement by shortchanging the cities of their share. (Decatur is now owed nearly a half-million dollars [an inside source puts it at $8 mil!] at this point).

The cities, led by Decatur, (who else?) got ticked off and sued the county. The county argued unsuccessfully before the GA Supreme Court that they didn’t have jurisdiction to enter into the agreement in the first place ( Ha! I can see it now….”We didn’t know what the hell we were doing! Please don’t make us pay these stupid cities!”) and the cities notched a win.

However, the county REALLY didn’t want to pay up since they had already spent all that sales tax cash, so they changed tactics and again fought off the cities by arguing that the agreement was invalid because it wasn’t detailed enough. With this argument the county won the case at the lower levels…so now the cities have appealed their way back to the state Supreme Court for a second time.

Well today is the day the court hears the case. And then we wait for their decision some time in the next 6 months. Justice may be blind, but she’s also purposefully sloooww. Even then it might not be settled and again get thrown back to lower courts to iron out details. But this is a big day for DeKalb’s cities.

Let’s hope the court decides in our favor, because according to our mayor, getting this sales tax money and annexation are the only ways to decrease our ever-increasing property taxes (as it mimics growing property values). And I’m a bit skeptical of the feasibility of annexation in its current mix of residential/commercial.

Come on people!  Why do we get all worked up about a potential annexation, but no one makes a peep about $8 million we are owed!?

If the mayor posts anything regarding this dispute, I’ll make sure to link to it here.