COVINGTON, Ga. — Area municipalities’ leaders want to be sure they’re getting the most out of the Local Option Sales Tax (LOST) agreement currently in place with the Newton County government, and they’re hiring a consultant firm to help make that happen.
The LOST is a joint county and municipal local option sales tax. If voters approve, the sales and use tax of 1% may be imposed on the purchase, sale, rental, storage, use or consumption of tangible personal property and related services in addition to state taxes.
Per the last LOST agreement struck between Newton County and its municipalities in 2012, the county government receives 75% of tax revenue while Covington receives 18.47%. Oxford gets 3.02%; Porterdale gets 2.05%. Mansfield, Newborn and Social Circle receive less than 1%.
Negotiations for the distribution of LOST revenue are due in 2022. Before those negotiations begin, Covington and other municipalities want to make sure they’re getting their fair share. In order to ensure this happens, the municipalities are entering a joint agreement to hire SDS Consultants to analyze the current distribution terms and determine what changes, if any, should be sought out.
“We will potentially be entering into an agreement with all of the cities in the area to use a consultant to look to see if we can maximize LOST dollars,” City Manager Scott Andrews said during the Covington City Council meeting July 19. “And that is the short summary.”
The total contract cost to hire SDS Consultants is $33,600, Andrews said, but each municipality will be helping cover the cost. Since the city of Covington is much larger than the other municipalities, it would be covering a larger portion of the bill, Andrews said — just under $20,000.
Because it will cost the city under $20,000, it does not require a vote of approval from the city council, but Andrews believed discussion with the city council was necessary “for sake of transparency.”
Social Circle opted to join the agreement during its July 20 meeting. Oxford’s mayor and city council discussed the agreement during its work session July 19 and is expected to hold a vote at its meeting Aug. 2. At the time of publication, it was unclear when remaining municipalities would discuss or vote on joining the agreement.
In years past, the tax has played a key role in the city of Covington’s budgeting process, exceeding $2 million in revenue each year since 2018. For the recently adopted FY2021-22 budget, the city expects up to $3 million in LOST revenue over the next fiscal year.
“It represents significant revenue to us,” Mayor Steve Horton said.
The revenue is typically placed in the city’s General Fund, and there are no specific requirements for how the revenue is to be used, Horton said.
Since 2020, the Newton County government has received more than $10.4 million each year. Per the county’s proposed FY2021-22 budget, they anticipate nearly $11.8 million this fiscal year.
In other business, the council:
• Approved a resolution unanimously to receive a GDOT contract for Coronavirus Response and Relief Supplemental Appropriation Act to provide reimbursements for costs and expenses up to $13,000 in federal funds. No local match was required.
• Approved a resolution 5-1 (Councilman Anthony Henderson opposed) to allow the city staff to apply for a grant from the American Rescue Plan Act in the amount of $32,000 for the Covington Municipal Airport.
• Approved a budget amendment unanimously for a sole source bid to purchase a new fire truck for the fire department from Pierce, through Ten-8 Fire & Safety LLC, in the amount of $600,500. After analyzing different payment options, it was determined paying for the truck outright would save the city approximately $122,000 in interest. The new truck was needed after the circuit board in the 24-year-old truck it is replacing went out.
• Unanimously approved lowering speed limits on Nelson Drive and Bridewell Lane to 25 mph.
• Appointed Councilwoman Hawnethia Williams as voting delegate for he 2021 GMA Annual Convention.
• Appointed Bailey Dickinson to be flag bearer for the Parade of Flags at the 2021 GMA Annual Convention.
• Removed discussion of code enforcement concerns from the agenda to be held during a future work session.