Money

Walker County property owners may see a 7 mill increase on bills being mailed along with annual tax bills next month,

Commissioner Shannon Whitfield, during his Sept. 14 public meeting, said this — nearly a 77 percent increase — is due to Erlanger hospital "moving forward" with a lawsuit against the county.

Erlanger sued to demand repayment of a 2011 loan made to The Hospital Authority that operated Hutcheson Medical Center — and guaranteed by the county — to keep the insolvent Fort Oglethorpe-based hospital open.

Former Commissioner Bebe Heiskell's administration unsuccessfully fought the federal lawsuit and the county has been ordered to pay Erlanger $8.7 million, plus interest and attorney fees,

"They wanted me to enter into a consent order for $180,000, which I did not feel was in the best interest of our county to do. They want to move forward with a jury trial where they can prove in court, where they are claiming that they have incurred a $180,000 in legal fees and costs to pursue the debt collection from Walker County," Whitfield said. "I refused to sign that agreement. I was looking for more of a total—global—settlement of the entire situation to offer them up a payment schedule and repayment. I have no desire to fight or litigate with Erlanger. I feel like it's been proven in court that Walker County citizens owe the money. The federal courts made that clear multiple times,"

Whitfield said his offer to pay Erlanger $625,000 every 90 days for three years —a total of $7.5 million — was rejected within an hour of its being made. Instead, he said Erlanger demands minimum payments of $1 million every 90 days for 27 months.

The difference between the county's offer and the hospital's demand is about $1.5 million.

"We have tried to continue to have dialogue, but no indications that we are getting anywhere," Whitfield said. "So, I guess they have a desire to go back to court."

To reduce the amount owed in legal fees, Whitfield said the county is willing to take its chances before a jury.

Once the dispute about attorney fees is settled, the commissioner said Erlanger has promised to pursue enforcement of the $8.7 million summary judgment.

Whitfield said this would mean up to an additional 7 mill tax rate increase imposed on the property owners of Walker County.

Rather than call this a tax increase, something which would require redoing the budget and holding a fresh round of tax and budget hearings, Whitfield has proposed assessing a fee, the Public Health Facilities and Services District, rather than a tax.

While the names differ, the amount due Erlanger is little changed. And now the argument has shifted to terms.

Walker County Tax Commissioner Carolyn Walker reports that each mill levied countywide is expected to generate $1,225,812. That would mean 7 mills, collected at one time, would bring in slightly more than $8.58 million.

Rather than hit taxpayers' pocketbooks with a one-time charge, Whitfield has asked that repayment be spread over than a year. Doing so would allow the 7 percent being broken into smaller increments and have the debt paid off within three years rather than one.

"We are hopeful we can work out some type of payment schedule and/or show the courts that we're in good faith trying to move forward and sending them money starting at the first of the year once the tax revenue comes in and hopefully they will back off of that and see that we are going to pay it, so they don't raise your taxes by 7 mills next year," Whitfield said.

A resident attending the Sept. 14 meeting then asked what a 7 mills increase would mean to a three bedroom house priced at $100,000, to which Whitfield said around $266 more on a $100,000 clear market—asset—value.

"It would definitely put a hardship on our citizens—overall—because it would almost be doubling the property taxes that are being charged from the county," Whitfield said.

One individual attending the commissioner's meeting asked if former Commissioner Heiskell—given her role in the Hutcheson Medical Center/Erlanger Hospital situation—currently has a job within the county, to which Whitfield said, "no."

As the room became quiet, Whitfield said this is a quiet group, to which one citizen jokingly replied, "Because, you are getting into our pockets." Whitfield responded by saying, "The previous administration got into your pocket, I didn't."

Assistant editor Mike O'Neal contributed to this story.

Josh O'Bryant is a general assignment reporter and covers the Walker-Catoosa County area. He can be reached at the Walker County Messenger office at 706-638-1859 and by email at jobryant@npco.com.