The Service Delivery Strategies Act (commonly referred to as HB 489)1 requires counties and their cities to periodically revisit and revise, if necessary, their Service Delivery Strategies (SDS) agreements. A number of counties are presently or will be preparing to renegotiate SDS agreements with their cities in the near future.
While not always the case, be aware that negotiations with your cities may become very contentious—especially with regard to tax equity negotiations. While the law presumes that cities will negotiate in good faith, and that the good of the overall community would be the basis for decisionmaking, counties should not presume that cities will approach negotiations in that manner. Oftentimes, cities will view service delivery negotiations as a chance to shift service delivery burdens to counties and to generate additional revenues for themselves regardless of the impact on the community.
While the SDS law requires that legitimate claims of double taxation be resolved, you may find that your cities will exaggerate the existence or degree of double taxation in the negotiation process and demand tax credits or even cash payments to “resolve” the problems. An example is the cost of maintaining county roads in the unincorporated areas of the county. The SDS law does not require or expect that counties treat county roads as an unincorporated service, but many cities will insist on counties taxing only unincorporated residents for the cost of the county road program. In fact, the county road system, wherever it runs, serves all the residents of the county as well as travelers from other counties and states. As such, the county road system is a legitimate countywide expenditure.
The point is, in negotiating with cities, it is important to be fully educated on the issues before proceeding.
To help untangle some of the strategies that cities may undertake in the negotiation process, this report may be useful.
