'Historic': Cobb County and Cities Enter Mediation

MARIETTA — For the first time since Service Delivery Strategy Agreements became state law in 1997, Cobb County and six of its cities have been forced to enter a formal mediation process.

Mediation began Wednesday morning at the Marietta Hilton, following opening statements from the attorneys representing the county and the cities, as well as the mediator, Cobb Superior Court Senior Judge Grant Brantley.

“Today, we need to remember that words matter. We want something from each other. That something is resolution,” Brantley said. “... Mediation rules require that the parties mediate in good faith. I’m confident that everybody is here in good faith, and they all want to be a part of the solution and not the problem.”

SDS agreements

SDS Agreements, also known as 489 agreements, are required to be submitted to and approved by the Georgia Department of Community Affairs every 10 years to keep local governments in good standing in the state’s eyes.

The agreements outline what services the county and each of its cities provide to citizens and, in the past, have set a dollar amount that the county owes the cities to reimburse them for those services.

Acworth Mayor Tommy Allegood told the MDJ in April that the first agreement, made in 2004, had the cities splitting $2.5 million each year, for 10 years. He said the second agreement, made in 2014, had the cities splitting $5 million a year, for 10 years.

What changed?

But this year, the county hired a consultant that it said found residents of the cities that were not being “double taxed,” as the cities have claimed. Instead, by the county’s calculation, residents of the unincorporated areas of the county have been footing the bill for all their services, and then some.

According to a presentation given by Ken Jarrard, the attorney representing the county in the mediation, the cities said the current tax inequity is $31,239,954. The county found that number to be negative $3,550,955.

“In plain speech that means that (the cities) maintain that there is $31 million of payment that they shouldn’t have to pay,” he said. “Whereas, according to the county’s SDS report, it’s actually a swing the other way … meaning the county’s unincorporated (citizens) are subsidizing county wide services. That’s almost a $36 million swing … We have some work to do today.”

What are duplicate services?

In his opening statement, Jarrard said that the cities and the county have different understandings of what duplicate services are.

Using the example of parks, Jarrard said if the county decided they would have one park per 5,000 residents, but the cities chose to increase that level of service to one park per 1,500 residents, that wouldn’t count as duplicate services.

“That’s not duplication. That’s the ability of the county to provide one base level of service and another jurisdiction to provide an enhanced level of service,” he said.

Andrew Welch — the lawyer representing Acworth, Austell, Kennesaw, Marietta, Powder Springs and Smyrna — said that parks and road services are some of the main points of contention among the county and the cities.

Police, code enforcement, stormwater management and planning, zoning and development services are points that the county and the cities have made more progress on reaching an agreement on, Welch said.

Consequences

Welch warned that if an agreement is not approved by the state by Cobb’s Oct. 31 deadline, the consequences would be dire.

Both the county and the cities would face state sanctions that would prevent them from being able to receive state grants and permits for things like road improvements, water and sewer systems, community development projects and even police radars.

State funding to the county for public safety, housing, parks and recreation, code and zoning enforcement, infrastructure and transportation, water and sewer service would be cut off.

“When they say state administered, they mean any and all federal funds that passes through one of (the state’s) agencies,” Welch said. “These sanctions are automatic. The law says that they start the next day (after a failed deadline).”

He said while a judge can issue an order to hold sanctions, as has been done in Fulton County, that is not an outcome the cities would support.

“We saw what happened in Fulton County ... There’s been an order holding sanctions (for) almost 20 years. And the parties haven’t negotiated ... the SDS agreement for that period of time. Sanctions are, frankly, the last measure you have statutorily to ensure a resolution is reached,” Welch said.

He said the county would also have the power to create special service districts (SSDs) in lieu of an agreement, which would use property taxes, insurance premium taxes, assessments or user fees levied on unincorporated citizens to fund services provided to those residents.

In an April post on the county’s website, the county said this practice is common.

“(Special service districts) would divide the county’s general fund into different funds. This would carve out the cities so their taxpayers would not be taxed for services available only to those in the unincorporated area (e.g., the Police Department and Community Development). Service Districts are common in many counties, and Cobb County already does this with its Fire Fund,” the post reads.

Welch said according to his teams calculations, the implementation of service districts could bring a net tax increase of 2 mills on unincorporated citizens, if all services are incorporated into the SSDs.

“A net increase to unincorporated residents would be 2 mills ... it depends on what services are to be negotiated to be included in the SSD. This is, going back to our list (of services), including all of the items in our list,” Welch said.

Jarrard said a perhaps more perilous consequence will be fractured relationships among elected officials in the county.

“The biggest (consequence) that I see with respect to the failure of negotiations ... is the deterioration of relationships,” he said. “... The informality of government that we all enjoy, to be able to place a call and say ‘Can we do this?’ ‘Absolutely.’ ... Relationships is the grease that keep the wheels of government efficiency turning.”

What does this mean for Mableton?

Mableton is the only city not formally involved in the mediation since it is still in its transitional phase. Cobb’s newest city will need to be incorporated into the SDS agreement by June 2025, when that transitional period ends.

City Manager Bill Tanks and city of Mableton attorney Emilia Walker-Ashby attended the public parts of mediation to “show support” to both the county and the cities and observe the process.

Tanks said as it stands, Mableton plans to offer planning and zoning, code enforcement and sanitation and solid waste services.

But, he said, the services Mableton offers may depend on the outcome of the mediation.

“This could very well affect what services we may have to or (not have) to,” Tanks said. “... Let’s say they have a bad decision, and let’s say the county says they don’t want to provide any services — not saying they would say that ... but whatever happens today may very well determine how we go into negotiations (next year).”

‘Do your jobs’

Before the mediation began, Allegood — who has been the Lake City’s mayor since 2002 — reflected on the unprecedented nature of the mediation.

“What’s so different this time is that Sam Olens in 2004, and Tim Lee, the chairman in 2014, it was just really easy to reach a consensus. The cities agreed, the county agreed ... It hasn’t been so easy this time,” Allegood said. “...This is historic. This is a historic meeting this morning.”

Cobb Chairwoman Lisa Cupid said she did not have a minimum or a limit in mind for what the county may offer to its cities, but that she was confident an agreement would be reached through mediation.

“I stand by the agreement that we come up with that helps us move forward,” Cupid said. “... “There’s always a silver lining when you bring people together ... I’m optimistic.”

Mediation is expected to continue Thursday, at 9:30 a.m. at 500 Powder Springs Street in Marietta.

No part of the mediation will be open to the public until a resolution is made and voted on. If the parties fail to make an agreement, Brantley will create a written report detailing the failure that will be made public.

“I do not want to make that report,” Brantley said.

From there, the county and the cities will have to enter litigation, something Welch said would benefit no one but the lawyers.

“Arguing with a lawyer is like wrestling with a pig in the mud. After a few minutes you realize the pig loves it,” he said. “... I would prefer that you, as leaders, do your jobs that you’ve been elected to do and charged to do by the constituents of Cobb County and your respective cities, and that is to reach a resolution.”