Towns & Law: Key Decision Expected on Local Government Partnerships

Key Decision Expected on Local Government Partnerships

Sometime around publication of this edition of Georgia’s Cities, perhaps even before publication, a very significant Georgia Court of Appeals decision will likely be issued which could guide the future of Service Delivery Strategy negotiations throughout the state.

THE SERVICE DELIVERY STRATEGY ACT WAS passed in 1997 with a stated purpose of minimizing “inefficiencies resulting from duplication of services and competition between local governments and to provide a mechanism to resolve disputes over local government service delivery, funding equity, and land use.” In other words, the law was passed as an effort to foster partnerships and cooperation between cities and counties statewide concerning the provision of services to the people of the state. The case currently in the court system which could have a profound impact on future negotiations is City of Winder v. Barrow County. The first issue in the litigation relates to whether the services’ geography or availability is the key factor in determining whether city residents should pay for unincorporated area services. The trial court held, and the counties continue to argue, that whether a service is available to city residents is all that is needed in order to utilize city resident tax revenue to pay for such service. The city argues that

the geography and whether the service is primarily for the benefit of the unincorporated area of the county is the key factor.

Importantly, the statute states that the “strategy shall ensure that the cost of any service which a county provides primarily for the benefit of the unincorporated area of the county shall be borne by the unincorporated area residents, individuals, and property owners who receive the service.” The trial court, unfortunately, truncated and misquoted this paragraph of the Georgia code in issuing its order, leading to the current appeal.

The litigation on this issue centers on the subject of road funding and whether city residents should be responsible for the funding of county roads in the unincorporated area which are primarily for the benefit of the unincorporated area. Despite the issue being centered on roads, should the county prevail, it is possible that counties across the state could utilize such a ruling to force city residents to pay for other county services provided in the unincorporated area, even though the city provides the same service in the incorporated area.

The second issue before the Court of Appeals concerns whether the county can utilize revenue measures of any kind to fund services, so long as the county collects such revenue from the unincorporated area of the county or whether the General Assembly limited the county to only utilizing specific revenue measures detailed by statute, namely “property taxes, insurance premium taxes, assessments, or user fees.” Finally, the county has also challenged the city’s use of revenue generated from the sale of water as an “illegal tax.” Of course, water fees are not taxes because people choose to utilize the water service and purchase such water. Furthermore, the statute specifically allows counties to

“It is possible that counties across the state dispute the reasonableness could utilize such a ruling to force city residents of water and sewer rate difto pay for other county services in the ferentials but does not allow unincorporated area, even though the city counties to challenge the provides the same service in the use of the revenues by a muunincorporated area.” nicipality as an “illegal tax.” These three issues before the Georgia Court of Appeals could shape the future of Service Delivery Strategy negotiations in the near future and could potentially lead to legislation at the Georgia General Assembly. Municipal leaders are encouraged to keep abreast of updated information concerning this case in the near future.