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Hendersonville finance committee reviews county demand over unpaid adequate-facilities taxes
Summary
At its July 22, 2025, meeting the Hendersonville Finance Committee discussed a Southern County law department letter asserting the city failed to ensure adequate-facilities taxes were paid on roughly 26 properties; staff will ask the city attorney to review and the committee kept the item on next month’s agenda.
HENDERSONVILLE — The Hendersonville Finance Committee on July 22, 2025, discussed a letter from the Southern County law director that says the city failed to verify payment of adequate-facilities taxes for a series of building permits and that the county believes the city now owes the uncollected amounts.
Mayor Jamie Clary, speaking to the committee, said the city has not acted as the county’s bill collector and instead asks permit applicants to provide proof of payment before a permit is issued. “We don't actually collect their adequate facility tax for them,” Clary said, describing the current practice as requiring a receipt or verification from the applicant prior to issuing a building permit. The county’s letter, the mayor said, contends there was a gap after the county passed a resolution and before the city implemented verification; the county’s law director states the city owes amounts for permits issued in that gap.
The matter matters because the adequate-facilities tax proceeds largely fund local schools, committee members noted. Committee members said the county’s records identify about 26 properties for which the county claims the city did not verify payment. Committee members and staff asked for the county’s resolution and the specific notices the county says it sent to the city so they can confirm whether the city received timely legal notice and whether the county’s claim is legally enforceable against the city.
Alderman Gibson said he was unsure of the legal basis for the county demanding the city remit unpaid taxes and asked whether the city attorney had reviewed the claim. Clary and staff said the law director, Lance (law director), was already communicating with the county’s law director; the committee requested a formal review and asked that Lance attend the next meeting or supply written advice before the committee reconvenes on the item.
Committee members also discussed timeline concerns in the county letter. The county’s letter, as described at the meeting, gave the city 14 calendar days to remit the requested amounts but the city’s law director secured an agreement with the county audit director to extend that deadline by an additional 30 days. Committee members said they would seek copies of the county resolution that created the collection requirement and any prior notices the county says it sent to the city so the committee can evaluate whether the city was adequately notified and what, if any, legal obligation the city has to remit funds on behalf of permit holders.
No formal vote on remedies or payments was taken at the July 22 meeting. The committee directed staff to obtain the county resolution and documentation of the county’s prior notices, to continue communications between the city and the county, and to arrange for the city attorney to advise the committee at its next meeting.
