published Wednesday, April 16th, 2014

Chattanooga City Council pursues counterclaim against Hamilton County school board


The City Council also unanimously voted for Councilman Chip Henderson to become the next council chairman. Yusuf Hakeem completed his one-year term Tuesday. Councilwoman Carol Berz was voted as the new vice chair person to replace Henderson.

Chattanooga officials went on the offense Tuesday in an ongoing feud between the city and Hamilton County Schools.

The City Council gave City Attorney Wade Hinton permission to take steps to recover $1.7 million they claim the county school system owes the city -- an amount that is $10 million less than what school officials say the city owes in unpaid taxes. That action could lead to the city to sue the school system in a counterclaim.

"We don't want to file a lawsuit but we do have a certain time limitation in which we can file a claim," Hinton said. "I won't file anything until it becomes apparent we won't be able to come to a resolution."

Tuesday's unanimous vote is the latest in the months-long battle between Chattanooga and the school system over millions in unpaid liquor-by-the-drink taxes. Five days ago, the school system filed a lawsuit against Chattanooga to recover $11.7 million that school officials say is due from unpaid taxes between 1998 and 2014.

School board member Jonathan Welch said in response to the city's action Tuesday that the school's debt comes nowhere close to the $11.7 or more the city owes. He also said the school system had been working to improve stormwater runoff infrastructure at its buildings to help reduce the burden that runoff water puts on the city's drainage systems.

"I don't think there's any good reason that it's gotten to this point," he said. "I don't mind paying the money, but we need to settle on the other as well. It's not exactly apples to apples."

City and schools officials had been in the midst of a 30-day working period over the back taxes.

But school officials said their decision to file the lawsuit Friday was spurred by legislation pending in Nashville and talks they said were going nowhere with the city.

After the lawsuit was filed, Mayor Andy Berke submitted the first solid offer to pay the disputed amount over the next five years, but Superintendent Rick Smith countered with a larger request.

The mayor's office balked at Smith's request concluding: "It's time to let the lawyers handle it."

Staff writer Kevin Hardy contributed to this article.

about Joy Lukachick Smith...

Joy Lukachick Smith is the city government reporter for the Chattanooga Times Free Press. Since 2009, she's covered crime and court systems in North Georgia and rural Tennessee, landed an exclusive in-prison interview with a former cop convicted of killing his wife, exposed impropriety in an FBI-led, child-sex online sting and exposed corruption in government agencies. Earlier this year, Smith won the Malcolm Law Memorial Award for Investigative Reporting. She also won first place in ...

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