Georgia court affirms $30.1 million Chatham fire-charge refund

The Supreme Court of Georgia has upheld a judgment requiring Chatham County to refund $26,852,778.90 in fire-protection charges, plus $3,274,595.33 in prejudgment interest, to a certified class of property owners. The combined award is about $30.1 million.

In its Oct. 14 decision in Chatham County v. Smith, the court ruled that the county’s mandatory charge was a tax, not a fee, and was unauthorized under the law governing the collections. The judgment covers charges collected from July 1, 2022, through June 30, 2024, in a special fire-service area in unincorporated Chatham County.

The class action was brought by property owners Damon L. and Sebrell E. Smith. The court affirmed both the class certification and the superior court’s summary judgment in their favor. The county had appealed.

Two formulas charged for fire protection

The county used different formulas in the two fiscal years covered by the case. For the year beginning July 1, 2022, the charge included $100 per parcel plus an amount based on the size of structures on the property. The structure charge had 11 brackets, ranging from $75 for structures under 500 square feet to $10,000 for structures of at least 50,000 square feet.

For the year beginning July 1, 2023, the county revised the formula. It charged $100 for vacant or unimproved parcels and 14 cents per square foot for burnable structures, with a $100 minimum.

The ordinance also authorized a late charge of the greater of $25 or 10% of the amount due, collection costs and collection of judgments, including through liens. For each day of a violation, it allowed a fine of up to $500, up to 50 hours of community service, or both.

The court focused on how the charge operated, rather than the county’s label for it. It said the amount was mandatory and based on property ownership and structure size, not on a payer’s actual use of fire protection or the burden that payer placed on the service. The charge also did not give payers a special benefit unavailable to others: fire protection was generally available in the service area regardless of whether a property owner paid.

The ruling is limited to Chatham County’s charge

Chatham County argued that state law allowed the charge as a fee for a special district and that some owners could receive fire protection from another provider. The court rejected the county’s position, concluding that the charge was not proportional to property value, was not an ad valorem tax and did not qualify as an authorized way to fund the services under the former statute applicable to the collections.

The court did not decide the broader question of whether Georgia’s Constitution independently requires such charges to be ad valorem. Its ruling addresses the Chatham County charge and does not decide the legality of every local-government service fee.

The opinion says the county took over fire protection in the district in June 2024, changed the charge and incorporated it into the district’s millage rate. The affirmed judgment establishes the class’s entitlement to the specified refunds and interest; it does not establish that payments have been distributed.

The Atlanta Journal-Constitution reported that local governments were reviewing other fees and quoted an Association County Commissioners of Georgia deputy director who said similar fire charges could be affected. That is an assessment about possible scrutiny, not a ruling on another government’s fee.

The court’s posted opinion remains subject to a timely motion for reconsideration under Supreme Court Rule 27 and editorial revisions before final publication. The opinion does not establish whether a reconsideration motion has been filed.