Despite intense negotiations and the outside help of a professional mediator, officials from Catoosa County and its two cities — Ringgold and Fort Oglethorpe — have been unable to agree on how to split the annual hefty portion of local option sales tax (LOST) dollars.

County manager Mike Helton said the one-cent sales tax on each dollar generates $8-9 million a year, which is divided between the county and two cities.

For the past 10 years, 70.6 percent (about $6.65 million) was given to the county, while 20.47 percent (about $1.9 million) went to Fort Oglethorpe and 9.47 percent (about $900,000) went to Ringgold.

State law mandates the division be re-negotiated every 10 years, generally coinciding with the federal census.

Fort Oglethorpe city manager Ron Goulart said although there are several factors to consider as a whole, there are a few key reasons the cities are asking for a larger piece of the pie.

“We provide a lot of services,” Goulart said. “The cities have grown over the past 10 years through annexation, population and business growth, and we just felt like since we really generate the majority of the sales tax, we're entitled to a little bit more to offset the cost of those services. In all due fairness, if we generate a million dollars worth of sales tax, I think we ought to get half of it and the county have the other half.”

Goulart agreed population is a valid criteria, and although the county population far outweighs the city count, he said the issue can be a little misleading.

“Before, they tried to base it mainly on population,” Goulart said. “But you have to consider daytime population. We have 40,000 people drive through here on any given weekday.”

Catoosa County has a population of about 64,000. Fort Oglethorpe maintains approximately 9,000 and Ringgold includes around 3,500.

Aside from population, Goulart also defended the proposed increase of 10-12 percentage points by reasoning that both cities have incurred a substantial amount of bond debt to help improve the sewer service, much of which is in unincorporated areas.

“We are under a burden to monitor those sewer systems and take care of the maintenance and repair of them,” Goulart said. “We have to comply with sanctions by the EPA (Environmental Protection Agency) and the Clean Water Act.”

Helton said although the most recent meeting to discuss the issue did not yield a firm agreement, it did provide some insights for both sides to see why everyone is “standing where they are” on the matter, and he hopes more discussions will take place.

“The next step would be arbitration,” Helton said. “But nowhere does it say you can't get back together and talk again, even without a mediator. The county is willing to talk more and discuss it further.”

Helton said the county is proposing an increase of about 8 percent, which would in turn lower the city rates. He said although “point of sale” and debt are deciding factors, there are eight criteria incorporated by law to determine the rates. Other criteria are service delivery responsibilities to the daytime (business) population as well as residential population, intergovernmental agreements (for example, fire and rescue) tax equity and other service delivery obligations.

According to law, if talks fail on how to divide the sales tax revenue, “baseball arbitration” would be done by an outside superior court judge, meaning a determination would be made in favor of one of the other parties, with little to no adjustments made.

“The county does a lot for the cities and we partner on a lot of projects,” Helton said. “So it gets very complicated. In my opinion, and I think in the opinion of the county, if we know there's going to be a judicial date set down the road anyway, what's the harm in trying to talk some more and try and understand each other and get closer together?”

Goulart said no decisions have been made regarding talks or court dates yet, but he felt confident all parties involved would handle it respectfully.

“We'll get it resolved,” Goulart said. “I just hope when we leave there, everybody can live with it.”