Missed Deadline May Cost Milton $900,000

By / DOUG NURSE / published on: 07/24/07 / www.ajc.com

Milton may end up forfeiting $900,000 in taxes because the city missed a Jan. 1 deadline to provide the state with the documents required.

The loss of the taxes would equal 7 percent of the city's $12.6 million budget, a huge hit for a new city struggling to get on its feet.

"It would be a tremendous setback to be unable to recover this money," City Councilman Neal O'Brien said. "Not getting this money puts us in a difficult spot. I was hoping to roll back the property tax rate, but that may not be possible. It's frustrating because the voters expected us to be very frugal with limited government but equal or better services."

The taxes in question are paid to the Georgia Department of Insurance by insurance companies based on percentage of premiums on all policies. The Department of Insurance returns the money to cities and counties. City Manager Aaron Bovos depicts the missed deadline as creating an inconvenience, and believes the city eventually will get the money. However, a state Department of Insurance spokesman said the department staff and lawyers haven't determined where the money legally should go. "To my knowledge, this is the first time this has come up," said Glenn Allen, spokesman for Insurance Commissioner John Oxendine. "It could go to Fulton County, or it could be dispersed among the other cities and counties statewide."

Fulton County Deputy Finance Director Sharon Whitmore said she doesn't think the money will come to the county. She said the Department of Insurance doesn't give the cities' share of the taxes to the county. The county only receives proceeds for the population in the unincorporated parts of the county.

"I can't see them saying, 'Here's Milton's share,' " Whitmore said. "I don't think they'll do it."
Mayor Joe Lockwood declined to comment, other than to say: "I've been briefed, and our staff is looking into it and I am confident they'll find a solution."

City Councilman Bill Lusk said he felt ill when he learned of the missed deadline. "I got a sinking feeling in the pit of my stomach," Lusk said. "My first reaction was, how did this happen?"

Bovos said the missed deadline was an oversight that occurred in the frenzied days of early cityhood when city staff were wading through reams of ordinances that needed to be adopted by the City Council. Northwest Fulton County became the new city of Milton on Dec. 1.

"It just got missed," Bovos said. "The agendas had 1,100 pages. This is two paragraphs."
The new cities of Sandy Springs — where Bovos worked before he came to Milton — and Johns Creek filed their documentation before their deadlines.

There will be no immediate impact on services in Milton because the earliest the city would have received the tax would be in the 2008-2009 budget year. The city became aware of the oversight in March when finance director Carol Wolfe was talking to Department of Insurance staff about another issue, and the subject of the tax came up. According to a July 12 memorandum to the mayor and City Councilwoman Karen Thurman, Wolfe promptly sent the documents to the Department of Insurance and tried to convince the state to cut the city a break, but the answer was no.

But Bovos says the city still has an ace it can play — the General Assembly. In a public memorandum posted on the city Web site, Bovos wrote, "The worst case scenario is that we ask the State to assist us in writing legislation during the 2008 General Assembly that will allow us to recover the revenue."