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Wednesday, 25 April 2012 12:45

Swain and Graham settle county line dispute with big bucks on the hook

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After two years of lawsuits and two mediations, Swain and Graham counties have finally agreed on where to draw the county line signifying their portions of the Fontana Dam.

Fontana Dam straddles the two counties. How much of the dam lies in each county determines how much they each get in property tax money from the Tennessee Valley Authority for the dam, its hydropower equipment and generators.

Previously, the two counties split the money 50-50. However, Graham County successfully argued in 2010 that it deserved more of the money since more of the dam lies on its side of the county line. Graham then sued Swain County for taxes going back decades that TVA had paid to Swain but rightfully belonged to Graham, estimated at $15 million. Swain filed a countersuit. Leaders from the two counties used mediation to eventually find a dividing line that suited them both.

Historically, the center of the Little Tennessee River was the boundary line between counties. But the river was covered up by Fontana Lake when the dam was built, and finding that center line now has proved elusive.

In a quest for resolution, surveyors were sent out to take a look at the area and discovered an old monument marking the center of the river on the dam, giving Swain County a watertight argument for where the county split should lie.

“We did not compromise beyond that marker. That marker establishes the exact center,” said Swain County Manager Kevin King.

Unfortunately for Swain County, however, it will recoup some, but not all, the tax money it has lost to Graham. With the new, or rather old, marker as the agreed on dividing line, Swain County will gain back about three-fourths of the funding it lost last year.

Under the disputed formula, Swain County lost more than $200,000 a year from its budget — a devastating blow that might have forced the county to raise taxes or increase fees. King estimated that the county will get back about $150,000 of that.

“We are better now than we were six months ago, but we’re worst now than we were two years ago,” said Commissioner Donnie Dixon.

Commissioners in both counties have signed a joint agreement that they will forward on to the General Assembly for approval. The state legislature’s rubberstamp is a mere formality however since the counties are in agreeance.

“We’re hoping that everything is going to work out and (want to) re-establish the relationship we’ve had with Graham County,” said Commissioner David Monteith. “We need to work together on everything.”

Overall, the county commissioners were happy that an accord was reached and will avoid the county having to either hike taxes or make major budget cuts.

“We were looking at different ways to fill the gaps in the budget,” King said. “We’d have to come up with that revenue somehow.”

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