The Town of Bishop will receive only a small amount of sales tax revenue from the planned Dollar General on High Shoals Road at U.S. 441, not the $80,000 annually projected by town leaders in April when they annexed and rezoned land for the convenience store.
The amount of money the town will receive–less than $550 annually if company estimates of sales are correct--is exactly the same as the amount it would have received had Dollar General located outside the town limits.
The expectation that the town would gain sales tax revenue from the annexation is the result of a misreading of the intergovernmental agreements between the town and the county.
The agreement for the Local Option Sales Tax does not allocate any revenue to Bishop, and the agreement for the Special Purpose Local Option Sales Tax allocates revenue based on population.
Bishop has less than 1 percent of the county’s population.
Bishop Mayor Johnny Pritchett argued at the April 12 Town Council meeting that the $80,000 in sales tax receipts company officials said Dollar General would produce could be used by the county for existing and future needs.
|April 12 Council Meeting|
Hadden, Pritchett, Johnson, Kurtz (L-R)
Pritchett suggested the money could go toward forming a police department.
The $80,000 figure was contained in documents provided to the city by land owner Reids Ferry LLC of Madison and Teramore Development LLC of Thomasville.
Ezekiel R. Lambert III is listed as manager of Reids Ferry LLC.
Teramore Development is a preferred developer for Dollar General.
“The applicant anticipates generating over $80,000 in sales tax receipts annually,” the narrative for the zoning change states.
Pritchett was a strong advocate for Dollar General at the April 12 meeting, saying the annexation and rezone would be of value both to the town of Bishop and to the county.
Town Council Members Nedra Johnson, Drew Kurtz, and Mindy Porterfield voted in favor of the annexation and rezone, while Council Member Chuck Hadden voted against the action.
Pritchett did not vote.
Pritchett’s miscalculations of the sales tax revenue that the town would receive is the result of a basic misunderstanding of how sales tax revenues are distributed in the state and county.
The sales tax rate in the county is 7 percent on the dollar and is made up of four components.
The first component is the state tax of 4 percent.
On top of that, the county levies a Local Option Sales Tax and a Special Purpose Local Option Sales Tax, each 1 percent.
The Oconee County Board of Education also levies an Education Local Option Sales Tax, and that is 1 percent.
Based on an agreement signed in 2012, Watkinsville gets 8.63 percent of the 1 percent Local Option Sales Tax, Bogart gets 3.15 percent, and the county gets 88.22 percent.
Neither Bishop nor North High Shoals gets any revenue from the Local Option Sales Tax.
Based on the agreement for the Special Purpose Local Option Sales Tax, Watkinsville gets 8.63 percent of the revenue collected, Bogart gets 2.72 percent, North High Shoals gets 1.98 percent, and Bishop gets 0.68 percent.
Bishop’s population estimate of 274 for 2019 is 0.68 of the county’s estimated population of 40,280.
Estimation Of Revenue
If Dollar General does build the store and does generate $80,000 per year in sales tax receipts, Bishop will get $544 in Special Purpose Local Option Sales Tax revenue.
Watkinsville will get $6,904, Bogart will get $2,176, and North High Shoals will get $1,584.
The remainder of the $80,000 in sales tax revenue–$68,792--will go to the county.
Bishop will not get any revenue from the Local Option Sales Tax.
So the total annual intake will be $544, not $80,000, and Bishop would have gotten exactly the same amount–$544–even if it had not annexed the nearly 30 acres and rezoned it for Dollar General.
That is presuming that Dollar General would have been allowed by the county or any of the other three cities to build a new store.
Background On Rezone
Reids Ferry LLC and Teramore Development LLC asked for the annexation and the rezoning of just less than 30 acres that lie between downtown Bishop and High Shoals Road.
The zoning action of the Council converted a little more than two acres of the 30 for business use, but land owner Reids Ferry LLC said it plans to develop an additional 4.4 acres “at a future date.”
Teramore Development submitted a concept plan showing an 8,960-square-foot, single-story building for the Dollar General with a pitched roof facing a driveway off High Shoals Road, the only entrance to the property.
The building is surrounded on two-sides by 45 parking spaces.
The plans show the driveway extending south from the proposed building to currently undeveloped land.
Follow Up Story
I did not attend the April 12 meeting, but I did speak with Pritchett on April 21 before posting a story on April 27
about the annexation and rezone.
The Council circumvented the county’s zoning review process in annexing and rezoning the land at the request of Dollar General. I asked Pritchett why it had done so.
“Dollar General was going to walk away,” Pritchett said in explaining that action.
City Attorney Joseph Reitman had said at the April 12 Council meeting that the decision was “time sensitive.”
The eventual rezone also is at odds with the county’s land use map approved by the county and Bishop in 2018.
“A lot of us thought it was a pretty good thing–where it was going to be located,” Pritchett said.
Pritchett said he expected the Dollar General will generate $80,000 per year in sales tax revenue for the city plus additional property tax.
At the April 12 meeting, which is available for viewing on Facebook, Pritchett had said “$80,000 in taxes a year would help...It can help the Town of Bishop do stuff. I have had people tell me we want a police department.”
I used that $80,000 figure in my post.
Correction Of Error
I have written many stories over the years on the Local Option Sales Tax, the Special Purpose Local Option Sales Tax, and the Education Local Option Sales Tax.
After I posted the story on April 27, I began to question Pritchett’s assertion that Bishop would receive $80,000 in sales tax revenue and my use of the figure in my story.
I contacted Justin Kirouac, county administrator, and asked him for copies of the agreements between the cities and the county over distribution of sales tax revenues.
Kirouac sent me a copy of the 2012 agreement on Local Option Sales Tax distributions and confirmed the figures I had from the resolution authorizing the Special Purpose Local Option Sales Tax approved by voters last November.
I also checked the Georgia Department of Revenue site showing distributions from the Local Option Sales Tax and confirmed that Bogart and Watkinsville get direct distributions but Bishop and North High Shoals do not.
Kirouac confirmed that the county distributes the Special Purpose Local Option Sales Tax disbursements to the cities based on the formula he had sent me.
Finally, County Attorney Daniel Haygood confirmed that Bishop gets no revenue from LOST and 0.68 percent of the county’s collected revenue from the Special Purpose Local Option Sales Tax.
Conversations With Pritchett
I contacted Pritchett by telephone on May 21 and asked him how he arrived at the $80,000 figure, given the percentages in the agreements.
Pritchett said he understood that the city would get revenue from the Special Purpose Local Option Sales Tax based on population.
Pritchett said he did not believe Local Option Sales Tax revenues were allocated based on population.
“Maybe I’m wrong,” he said.
Pritchett said he thought Bishop would get all of the Local Option Sales Tax collected and that would result in the $80,000 figure.
Seek Help Of Municipal Association
“I have to check with GMA on some stuff, and make sure Bishop gets its fair portion,” he said, referring to the Georgia Municipal Association. “I guess that is something I’ll get my attorney to check on.”
I asked Pritchett if he assumed the $80,000 figure represented Local Option Sales Tax money alone and that all of that would come to the city.
“Yea, I guess so, and I might of assumed wrong,” he said.
I contacted Pritchett again on June 4. He told me he was having health problems and had not contacted the Georgia Municipal Association.
I contacted him again on July 3. He told me he had not contacted the Municipal Association but he would be attending a meeting “next month” and would ask about it.
Both at the meeting in April and in my conversation with him in April, Pritchett said the city would gain in property tax revenue as well as gain increased sales tax revenue.
The 30 acres annexed were part of a 34-acre tract purchased by Reids Ferry in June of 2009 running from the northern border of the city to High Shoals Road.
About four of those acres were inside the city, and the remaining 30 of those acres were outside the city limits and were the subject of the rezone petition.
All of the land was zoned A-1 for agricultural use at that time, including the four acres already inside the city limits.
The Town of Bishop rezoned just a little more than two acres from the 30 acres outside the city to B-1 for business use for the Dollar General.
The remainder of the land was to remain zoned for agriculture.
Tax Appraiser Response
I contacted Oconee County Chief Appraiser Allen Skinner on June 4 and asked him to help me understand the tax implications of the annexation and rezone.
Skinner explained that nothing will change in terms of property tax assessments for 2021, since the annexation and rezone took place in 2021.
The 3.94 acre parcel that has been in the city since 2014 has been taxed as a city property in the past and will be taxed as a city property in 2021, he said.
The remaining 29.97 acre parcel will be taxed as unincorporated for 2021, he said, and will be taxed as within the city limits in 2022.
Once the Dollar General is built, the property will be assessed and taxed accordingly, he said.
Adding the 29.97-acre parcel to the city’s digest will produce some additional revenue, since it currently is not being taxed as city property.
The millage rate for Bishop at present is 1.791.
At present, the 29.97-acre property is appraised at $418,635, and its 40 percent assessed value is $167,454. Taxes are on the 40 percent assessed value.
So, if the property were added to the Bishop tax digest at its current value, it would produce $299 in new annual revenue.
Skinner estimated that a new Dollar General might be appraised at about $1 million.
If $400,000 is added to the 40 percent assessed value, the property would produce $1,016 in property tax revenue that the city was not getting before the annexation and rezone.
That $1,016, plus the $544 in sales tax revenue, or $1,560, is a rough estimate of the annual gain to Bishop from the Dollar General.
But the town did not need to annex the 29.97 acres to get the $544.
Lacy Armstrong, city clerk for Bishop, told me on July 12 that the town was still in the process of signing the plats resulting from the April annexation and rezone.
She told me that Dollar General has not yet submitted any construction plans or requests for a business license.
Meanwhile, the Golden Pantry, which is located across High Shoals Road from the site of the Dollar General, is moving along rapidly with construction following the fire that destroyed the store more than a year ago.
The new store will be just under 5,000 square feet in size, approximately 1,800 square feet larger than the old store, but will generally occupy a similar footprint of the former location, according to a news release from the company sent out on July 1.
The Dollar General is expected to be just less than 9,000-square-foot in size.
Construction of the Golden Pantry is expected to be completed by the end of the year, the news release stated.