Legal questions raised as Mulberry vote nears

An emergency hearing will be held today to determine if the referendum to create a new city in Gwinnett County should be on next Tuesday's primary election ballot.

Why it matters: If approved by voters, Mulberry would become Gwinnett's second largest city, with about 41,000 people near the Hall and Barrow county lines.

What they're saying: Resident Stephen Hughes filed a lawsuit last month to stop the May 21 referendum, arguing that the charter is unconstitutional because it does not allow for property tax collections and limits what services it can offer.

• "The voters are being led to believe that they are getting a city in which they will not have to pay a property…tax," he said in a written statement he shared on Nextdoor. "The truth is they are getting the exact opposite."

The other side: Michael Coker, a member of the Citizens for Mulberry, Inc., told Axios that "no court has ever said in Georgia that this particular type of city model was unconstitutional."

• "We believe it's just to take the measure off the ballot, to take the right of the vote away from our residents," he said.

How it works: Mulberry's charter calls for a "city-lite" form of government where it will only offer three services: planning and zoning, code enforcement and stormwater management.

Between the lines: That style of government has come under scrutiny in recent history. In 2015, a Senate study committee raised concerns about its legality.

• When a proposal to create a new city of Sharon Springs was being debated that same year, attorney Ken Jarrard penned a legal opinion for Forsyth County concluding the city-lite concept is "not authorized under Georgia law."
• Jarrard, who's not involved in the Mulberry referendum, told Axios last week he doesn't think limitations set in the charter are enforceable because the Supplementary Powers clause in the Georgia Constitution grants cities and counties the authority to use more than a dozen services.

By the numbers: According to Mulberry's feasibility study, it would generate $9.4 million in revenue through fees from stormwater management, business licenses, cable TV franchise and alcohol excise levies, rather than from property taxes.

• Operating expenses are projected to be $7.9 million.

Yes, but: While it can't take a stance on the referendum, Gwinnett County's government commissioned its own study to show it would lose $8.16 million in revenue if the city was formed.

• The county also projects Mulberry would have to annually set aside $3.2 million to maintain "aging pipes" and $7.8 million to maintain its roadways.

The fine print: Mulberry would not be eligible to receive a share of $39.1 million in sales tax revenue Gwinnett has set aside for road projects in the proposed city limits, the county contends.

The bottom line: Jarrad told Axios that if the charter is taken at face value, Gwinnett County will still "be a huge factor" in Mulberry's daily operations as it tries to figure out how to provide services that people will want and need.

• The question could then shift to who will provide those services with those limitations in place.
• "If I was a citizen, I would just want to know the answer to those questions," he said.

What we're watching: The hearing is set for 2:30pm. If Superior Court Judge Tadia Whitner moves to remove the referendum from the ballot, we'd be in largely uncharted territory — just days before voters head to the polls.