TIFTON — In a series of claims filed against City of Tifton, Tift County alleges that the city is responsible for $22.6 million in damages to the county, according to court documents.
The county claims the city has breached contracts related to the water, sewer and solid waste joint funds and that it continues to do so.
“These breaches have caused financial damage to the jointly-owned enterprise funds, for which redress is sought,” the claims state.
The county is seeking litigation costs and attorney fees, and for the court to award damages for “attorney’s fees and bad faith.”
“The City’s actions and deceit were willful, with malice, intent to injure, and exhibited an entire want of care,” the document states. “As a result, the County requests costs of litigation and attorney’s fees be awarded to prevent such future behavior.”
The documents claim City of Tifton has improperly moved millions of dollars from the joint water and sewer enterprise funds to the city’s general fund.
The claim alleges this was accomplished by a number of ways, including via a service fund, bandwidth connectivity charges, debt service charges and rebate checks from ESG Operations.
The claim alleges that City of Tifton has transferred $17.9 million out of the joint enterprise funds into the city’s general fund, by way of the service fund.
That money, the claim states, should have stayed in the joint funds “for necessary growth and infrastructure improvements.”
“By transferring these funds, the City subsidized its general fund thereby avoiding the need to raise City taxes for other City services,” the claim states. “The net effect of this conduct was to export a property tax to the unincorporated citizens, thereby avoiding the proper taxation of its own citizens.”
Documents argue that the city has “improperly charged” Tift County residents outside of the Tifton city limits disparate water and sewer rates for 13 years.
“Over this duration of time, the City has promised numerous times to equalize rates, but never has done so,” court documents state.
Those higher rates have led to unincorporated residents in Tift County being overcharged “an aggregate sum which may exceed $5,000,000,” court documents state.
The claims allege that $2.6 million was transferred through ESG rebate checks, $1.3 million through Myon debt transfers and bandwidth connectivity; and, additionally, that the county had to make $366,340 worth of repairs to county roads that the city cut up.
Rebate checks the city received from ESG should have been put back into the joint fund, the documents claim.
In 2014, specifically, the city received a rebate check of $443,991, the claim states.
“Because this money was a return of money spent out of the water and wastewater enterprise funds, the money must be deposited into the water and wastewater accounts,” the claim states.
The claims estimate that $2.66 million of ESG rebates have been diverted to the city’s general fund in the last six years.
The claim states that “bandwidth connectivity” charges from the city went into the general fund and that higher charges were laid against the water and sewer funds.
“The city used the “bandwidth connectivity” charges for the payment of CityNet debt,” the claim states.
The claim alleges that from 2011 to 2014, the city collected $2.25 million in bandwidth connectivity charges, including from the joint water, sewer and solid waste funds and the then-joint fire fund.
“Although the checks cannot be traced beyond the general fund, from 2011 to 2014, there was a subsequent debt payment on the City’s CityNet bond debt in an amount approximately equal to the bandwidth reimbursements received by the general fund,” the claim states.
Documents filed also claim that the city uses the joint water/sewer assets “to subsidize developers in exchange for the developer agreeing to annex new subdivision development.”
A counterclaim included in the filed documents answers the recent city’s request for a judge to rule in the city’s desire to split the joint water system.
The counterclaim argues the city’s proposed terminating is invalid, citing an amendment to the Water and Wastewater agreement that prohibited either entity from terminating the agreement “until both parties established water service plans that were submitted and approved by the Georgia Environmental Protection Division.”
The proposed division also “ignores 13 years of County contributions to the joint system,” the claim states.
The claim asks that the city be prohibited from terminating the joint fund and that the city put money transferred out of enterprise funds back into the fund.
In addition to seeking litigation costs and attorney fees, the county makes several requests from the court in regards to the claims, including:
• The court to rule on the city’s request to terminate the water/sewer agreement.
• The court to prevent the city from transferring money from the joint water, sewer and solid waste funds into the general or service fund until the matter is resolved.
• That the city be required to seek county approval if it wants to spend joint fund money on capital or economic extension projects.
• That the city reimburse the county for road repair expenses.
• That the city be blocked from using joint funds to incentivize annexation.
• That an “equitable accounting” be done for the water and wastewater enterprise funds and an accounting of the solid waste enterprise fund.
Reached by email, city attorney Rob Wilmot offered the following response:
“From a brief review of the Answer and Counterclaim, it appears the County agrees that the issues between the City and the County regarding water service need to be presented to the court for a decision through the Declaratory Judgement action filed by the City. The City and the County have different views on the facts and what has transpired over the years concerning the operations and improvements made to the water system and the construction of the interlocal agreement between the City and the County. The City and the County will present their respective positions concerning the operations and expenditures of the water system over the years to the court who will then decide the rights of the City and the County.
“The County has made some additional allegations which do not relate to the water issues in its counterclaim. While the City was hoping to bring a limited request before the court to resolve the issues of the water system, the allegations and claims brought by the County will obviously expand the litigation should the court determine it appropriate to address any of these claims. The City will make an appropriate response to the allegations and claims brought by the County after the City has had the opportunity to review these additional allegations and claims.”
County Attorney Tony Rowell did not immediately respond to a request for comment. The attorney’s office “will not be making any statements concerning the complaint filed with the Court Wednesday,” according to Tift County Manager Jim Carter.