Henry County SPLOST III
Special Purpose
Local Option Sales
Tax
SPLOST III Minutes | Proposed Meeting Schedule | Developing a SPLOST List
Developing A SPLOST Project List
Excerpts from A Guide for County Officials by the Association of
County Commissioners of Georgia
There are two ways for a county to develop a project list for the referendum that includes the cities:
The first method is by entering into an intergovernmental agreement between the county government and enough cities to represent at least 50% of the county’s municipal population.
The second method applies when the county and cities are unable to reach an agreement under specifications and requirements of Georgia law. In this case the county may elect to distribute revenues to the cities based on population.
Several factors determine the length of time that a SPLOST may be imposed. In general, the tax may be levied for five years. If the county and qualified municipalities enter into an intergovernmental agreement, the tax may be imposed for six years. If no intergovernmental agreement exists and a Level One project is included, then the tax must run: (1) for five years, if the estimated cost of all Level One projects is less than 24 months of estimated revenues; or, (2) for six years, if the estimated cost of all Level One projects equals more than 24 months of estimated revenues. Once the tax terminates, it can be immediately continued without a gap in collections if a referendum is timely held in which the voters approve the new SPLOST.
Level One Projects:
Level One projects are capital projects for the use and benefit of the citizens of the entire county needed to implement state mandated county responsibilities. The law specifically limits Level One projects to the following:
• A courthouse;
• An administrative building for elected officials or constitutional officers;
• A county or regional jail, correctional institution, or detention facility;
• A county health department facility; and
• Any combination of the foregoing.
The board of commissioners can place as many Level One projects as it deems appropriate on the SPLOST ballot. Collectively, these Level One projects may consume up to 100 percent of the total estimated SPLOST revenues.
In addition to constructing new facilities, the Level One category allows for renovations to existing facilities, debt repayment on existing facilities, and capital equipment needed to furnish or equip facilities.
Level Two Projects:
Level Two projects are capital projects (other than the Level One projects described above) that, in the discretion of the board of commissioners, are accessible to all county residents or benefit the citizens of the entire county.
Unlike the Level One projects, if the commissioners decide to allocate SPLOST proceeds to one or more Level Two projects, no more than 20 percent of the total estimated SPLOST revenues may be allocated to Level Two projects off the top. Nonetheless, additional SPLOST proceeds may be applied to these projects, but those proceeds would have to come from the county’s prorated population share described in Step 4 below. Funding allocated to Level Two projects, like funding for Level One projects may be used for building and renovating existing facilities, repaying debt on existing facilities, and equipping and furnishing facilities.
Allocate Remaining Proceeds Based on Population
After the county has allocated the appropriate amount of funds to Level One or Level Two projects, the remaining SPLOST proceeds must be allocated between the county and the qualified municipalities as follows:
• As specified in an intergovernmental agreement [O.C.G.A. § 48-8-115 (b)(2)(B)(i)], or
• To the county and each municipality pro rata based on population with the county’s share of the SPLOST proceeds equal to the ratio of the unincorporated population of the county relative to the total county population. Each qualified municipality is allocated a share of the proceeds equal to the ratio of the municipality’s population relative to the total county population [O.C.G.A. § 48-8-115 (b)(2)(B)(ii)].
Population Estimates - Although the SPLOST law does not specify the basis for determining population, the only accepted population figures officially recognized by the state are the decennial census figures compiled by the U.S. Bureau of Census.
Municipal Shares Not Guaranteed - Depending on the allocation method selected, not all qualified municipalities are guaranteed a share of the SPLOST funds. Examples:
• If the board of commissioners proposes to fund one or more Level One county projects using SPLOST, and the Level One projects would consume 100 percent of the estimated SPLOST revenues, no qualified municipality would receive SPLOST funds.
• If the board of commissioners negotiates an intergovernmental contract to determine the distribution of SPLOST funds, the agreement is effective so long as the agreement is between the county and one or more qualified municipalities representing 50 percent or more of the municipal population in the county. As such, one or more qualified municipalities may not be included in the intergovernmental agreement and would not be entitled to share in the SPLOST funds.
What happens if a municipality refuses to give the county any projects to be included on the SPLOST ballot?
As discussed in the previous question, if a qualified municipality that is entitled to SPLOST revenues refuses to specify any SPLOST project to be included on the ballot, it is reasonable to assume the county would have the discretion to select a project on behalf of the non-participating municipality.
By way of suggestion, in the absence of any guidance from the municipality, the county may want to specify road, street and bridge improvements to the municipal road system since it is broad enough to give the municipality flexibility on how and when the funds are spent within the municipality.
If there is no intergovernmental agreement, can the county refuse to include a particular municipal project or type of municipal project in the resolution calling for the SPLOST
If a qualified municipality proposes a SPLOST project that the county considers ineligible, frivolous or harmful to the successful passage of the referendum, the county should try to work with the municipality to select another project that is acceptable or, at least, eligible. If that fails, there is no express authority for the county to reject a municipal project regardless of its merits or eligibility. However, given that the county has sole responsibility for adopting the SPLOST resolution, and given that municipalities are guaranteed a share of the revenues but not specific projects, it is reasonable to infer from the law that counties, in exercising their fiduciary responsibilities to all the citizens of the county, have the discretion to delete ineligible projects and substitute other municipal capital outlay projects in lieu of the ineligible projects.
EXCLUSIVE USE / SEPARATE ACCOUNTS
SPLOST proceeds must be used by the county and any qualified municipalities exclusively for the purposes specified in the resolution calling for the imposition of the tax. Proceeds must be kept in separate accounts from other funds of the county and municipalities and cannot in any manner be commingled with other county or municipal funds prior to their expenditure [O.C.G.A. § 48-8-121(a)].
Annual Reporting - Prior to December 31st of each year, the county and each municipality receiving SPLOST funds must publish a non-technical report in a local newspaper of general circulation that includes the following information on each approved project:
• The original estimated cost;
• The current estimated cost if different from the original estimated cost;
• The amounts expended in prior years; and
• The amounts expended in the current year.
The annual report must also include a statement of what corrective action the local government intends to implement for each project that is under funded or behind schedule and a statement of any surplus funds which have not been expended for a project [O.C.G.A. § 48-8-122].
The county is not responsible for reporting information on municipal projects. The report may be published at anytime during the calendar year and in the form determined by the local government issuing the report. Road, street, and bridge projects can be reported collectively and do not have to be broken down by specific project.
Documents under review by the SPLOST Oversight Committee:
Note the attached figures indicating revenue estimates and projections prepared by Morgan Keegan & Company, bonding agent for Henry County.
MK-1: Sales Tax Collections Cash Flows
MK-2: Conservative SPLOST Projections
MK-3: Aggressive SPLOST Projections
Note the attached figure indicating the costing basis for specific types of capital projects.
CP-1: Cost Estimates