ROCKINGHAM — Officials and legal counsel from the county government and the cities of Rockingham and Hamlet will hold the first official meeting of their mediation over the county’s alleged breach of contract in mid-January 2021.
The exact date has not yet been decided, but the parties have narrowed it down to two dates in January, according to Hamlet City Manager Matthew Christian. This proposed meeting comes after months of tension that followed the county’s decision in April to switch from a system in which sales tax revenues were distributed by the state in proportion to each local government entity’s population size to one in which revenues were distributed in proportion to their ad valorem taxes levied.
An ad valorem sales tax distribution method is typically advantageous to counties because they tend to have more industrial sites on their tax books, which means they would get a bigger piece of the total sales tax revenue “pie” under an ad valorem distribution method, while municipalities would see their portions reduced.
Of all the controversies about this decision, which the previous Board of Commissioners unanimously approved following County Manager Bryan Land’s recommendation, it was Land’s publicly stated justification for the change that put the county in legal hot water. Land cited new expenses the county had taken on from the cities due to the consolidation of 9-1-1 services at the new Emergency Services Complex — and the lack of help from the cities to cover these expenses — as a reason why this change was needed. The Daily Journal reported that the cities had signed an interlocal agreement with the county in 2015 in which the parties agreed that the new 9-1-1 Center would be “self-sufficient” and “financed by 9-1-1 fees, grants and funds provided by the county.”
Rockingham City Manager Monty Crump said that the city wants to be reimbursed for the amount of 9-1-1 expenses that they argue the county sought to recoup in making the change to ad valorem.
“We would certainly seek to be made whole,” Crump said in an interview Thursday. “They changed the sales tax formula to get money from us they said we weren’t going to be charged for.”
Crump added that mediation is an attempt to find “common ground” with the county and, he said, “if we can’t, we’ll decide whether we’ll file a lawsuit or not.”
In the weeks after the April 6 vote, all the municipalities came together to pass resolutions calling on the county to go back to the per capita distribution method and instead raise taxes in order to balance the county’s budget, but the county didn’t budge. A return to per capita is not at issue in the current mediation, and it remains to be seen whether it will be considered in the future.
Christian, when asked what the City of Hamlet’s goals for the mediation were, said the mediation is intended to “facilitate a structured conversation around the sales tax distribution change.”
“Hopefully mediation will help us recognize our different perspectives and provide a foundation for a more permanent solution,” Christian said in an email Thursday. “The sales tax distribution is a significant decision for any county, and it deserves careful consideration and meaningful engagement from various perspectives.
“I believe returning to the per capita distribution would give the entire Richmond County community an opportunity to properly evaluate this significant impact of this decision,” Christian continued.
Land did not respond to an email request for comment and a phone call to his office by press time Friday. An attempt to reach County Attorney Bill Webb Friday was unsuccessful.
Land’s full statement to the commissioners before the vote, according to the Daily Journal’s recording of the April 6 meeting, was as follows: “(The consideration of a change to ad valorem) was to offset some of the additional expenses shifted from the municipalities to the county level. It seems like more and more of those expenses are being shifted to the county. You remember, in the last year-and-a-half, two-year’s time, we’ve had the (extra-territorial jurisdiction) added on from Hamlet and Rockingham, we’ve had the 9-1-1 Emergency Services Center added on, we’ve acquired (eight emergency dispatch) employees from Hamlet and Rockingham. No contribution from the municipalities for either of these. It just seems like a trend we’re going to see more and more in future years.”
The Daily Journal reported in May of this year that Land sent an email on May 25, 2018 to then-Hamlet City Manager Jonathan Blanton asking him to consider including a contribution to the county in Hamlet’s budget for fiscal year 2019-2020 to assist in covering the salaries of the new dispatchers the county would be hiring at the 9-1-1 Center.
“I realize the the 18-19 budget is nearing completion, however, when conducting your planning for 19-20 budget year can you look (at) the possibility of providing some funding from the City of Hamlet for the 4 dispatchers that we will be acquiring soon?” Land asked Blanton. “Hamlet will realize some substantial savings not only from the elimination of these employees’ positions but also in the technology that would need to be purchase in the near future … We are looking at an increase in expenditures in year 1 in excess of $1.4 million, subsequent years will see an increase of approximately $700,000 annually.”