Coffee County has filed a suit against the City of Manchester asking for lost tax revenue that could amount to almost a $1 million per year for 15 years connected to the annexation of property now called the Bonnaroo Farm.
In documents filed in June in Coffee County Chancery Court, County Attorney Robert Huskey alleges that the city’s timing for the annexation during the COVID-19 pandemic will result in the loss of two sources of tax revenue from the festival, cutting the county’s related coffers from $1 million to between $30,000-$40,000 annually.
The amended complaint says that the growth plan established in accordance with state law to prepare for growth and protect rural agricultural property by regulating residential and industrial growth was not followed by its intent. The plan argues that the city annexed property “to reap the beer and sales tax revenue currently going to the county.”
The complaint says that the county and the city have a contract that “holds the county harmless” for 15 years following any annexation or new incorporation for the loss of wholesale beer and local option sales tax revenues that would have gone to the city under prior law.
The county feels that the tax statutes to assist the Department of Revenue in defining tax revenue on annexed property alone would cause a financial detriment for the county.
In comparing the situation to a marital dissolution agreement, the complaint calls the county the innocent party in the annexation and alleges it should get the tax revenue for the next 15 years.
The suit falls short of claiming the property is outside Manchester’s urban growth boundary, and the map was not included as an exhibit.
According to the County Technical Assistance Service (CTAS), the Tennessee General Assembly passed public chapter 1101 requiring coordinated planning efforts throughout the state.
The growth plan identifies three types of areas urban growth boundary, planned growth area and rural area.
“A municipality may expand its urban growth boundaries to annex a tract of land without reconvening the coordinating committee or approval from the county or any other municipality if:
(1) The tract is contiguous to a tract of land that has the same owner and has already been annexed by the municipality;
(2) The tract is being provided water and sewer services; and
(3) The owner of the tract, by notarized petition, consents to being included within the urban growth boundaries of the municipality,” T.C.A. § 6-58-118 says.