CC Notes – August 24th 2015
All were present for the August 24th, special called meeting of the Cumberland County Board of Commissioners. This meeting was called to consider the budget for the fiscal year of 2015 – 2016. A word of warning, this is a lengthy newsletter, but I urge you to take the time to read it in its entirety. Sound bites and misinformation can be hard to address in short form, so your patience is appreciated.
After working from April through much of August, the Budget Committee presented the proposed budget to the Commission as a whole. While line items were cut in many instances, others were increased in the proposed budget. Some recurring expenses were added such as the four SRO Officers being fully funded by the County for the first time at a cost of $225,889. An approximate $625,000 increase in the state required county match to the BOE budget was also included. An adjustment in the County Wage Scale and the creation of a new Sheriff Department Wage Scale was also proposed in the budget presented. I have previously written about the reduction in income from boarding state prisoners. The reduction of state prisoners reduced County income by approximately $600,000. A contribution of $40,000 to the Chamber of Commerce was included in an attempt to start a jobs growth program. You may have seen how effective these programs have been in bringing in new industry in several surrounding counties. A new retiree health insurance benefit, which I do not support, was scheduled to cost the county over $60,000 in year one alone. All of these items impact the bottom line of the budget. In the end, the Budget Committee recommended a 10 cent property tax increase for the General Fund in order to balance the budget.
In 2006, Cumberland County established a wage scale for General Government and Sanitation Fund employees. This wage scale defined starting salaries and annual step raises for each employee based on job classification. Since the wage scale has been implemented, there have been approximately four occasions when the $600 step raises were not funded by Cumberland County. This has resulted in Cumberland County having some employees that are making less money than their counterparts in Fentress and other surrounding counties. I do not believe that Cumberland County should try to compete with Knoxville or Nashville, but I do believe we should compete with Fentress and other counties in our area. To this end, after a long, drawn out process that has been detailed in the Crossville Chronicle, the Budget Committee recommended the scale be amended by raising all steps by $1,800. All employees will also receive their normal step raise of $600 for the year. The intent was to make up for the years that step raises were not funded by the County.
There was a lot of debate in the Budget Committee meetings concerning the wages of those working in the Sheriff’s Department as well. Sheriff Casey Cox and staff, with help from members of the community, studied the wages of several counties in Tennessee to provide supporting data for a new, independent wage scale for the Sheriff’s Department. One of the controversies of this wage scale has been the savings of funds in the Sheriff’s Department budget. In the previous year’s budget, the Sheriff did save a significant amount of money, over $447,000, from the expenditure side of his budget. As previously mentioned, the income side has fallen significantly due to an intentional effort to reduce state prisoner boarding in the county jail. Since the Sheriff has pushed out State prisoners that were costing the county more than the reimbursement given by the state, the crime rate has fallen in our County. The negative to this is that while we were housing prisoners at approximately half the actual cost of incarceration, replacing state prisoners with local prisoners meant the county then had to pick up the full cost of incarceration. Taking all of this into consideration, the Sheriff’s wage scale unanimously passed the Budget Committee.
You may have read in a recent guest column in the Crossville Chronicle that the Budget Committee, and me specifically, recommended a large one-time contribution to the BOE to help pay for books and a new roof at North Cumberland Elementary, using money from the General Fund operating revenues. This is not true. A resolution on the agenda made sure that this was one-time money from fund balance, not operating revenue, to help cover these expenses. As we have discussed before, fund balance is money that was budgeted but unspent from previous budgets. Not all line items in a budget are spent out to 100 percent each year, which is a good thing, and that money falls into fund balance. These proposed one-time funds are what the County Commission uses for one-time expenses such as the BOE assistance mentioned above.
The Budget Committee sent the original proposed schools budget back to the BOE as it was very much out of balance, somewhere north of $2 million if memory serves me. When the BOE brought back a new budget, cuts had been made and the budget was out of balance by the $703,000 needed for new K-12 math books. Cumberland County is one of two or three systems in Tennessee that fund their school system at the legal minimum required by the state. There is no question that, on occasion, the BOE spends money that I disagree with – but with the system funded at the legal minimum, and with a BOE fund balance that has also dwindled to the legal minimum, purchasing the math books would have been difficult. Considering the budget before us, along with the associated BOE fund balance projections, the Budget Committee tentatively voted to give a one-time contribution, from county fund balance, for the purchase the math books. The current books are well over a decade old.
A few weeks later, the final BOE fund balance projections came out and the BOE Chief Financial Officer informed the Budget Committee that their fund balance would be approximately $600,000 more than projected. In previous BOE budget meetings, it was made clear to those in attendance that the BOE felt the two biggest needs were the math books and roof replacement at North. The roof is original to the building and has dozens of leaks that are continually patched. Given that fact, the Budget Committee voted to reduce the contribution for books to $103,000 ($703,000 – $600,000 in extra fund balance) and to contribute $356,000 for the roof replacement. This reduced the one-time BOE contribution from $703,000 down to $459,000, all of which was budgeted from county fund balance.
The County also purchases capital equipment with fund balance money. This year, the capital budget was approximately $600,000 for such items as HVAC replacements, ventilators for all ambulances, four patrol cars (according to established vehicle replacement rotation), two ambulance remounts (according to rotation), window replacements, repair of a security gate at the jail, etc. Many capital requests were denied by the Budget Committee as well. It has been stated that this capital money was funded from the operating budget, which is also untrue. Capital items were funded from fund balance, as has been the normal procedure for some time. Although we do normally fund capital expenses each year, if a need arose we could put these on hold. This is a fiscally conservative approach to budgeting as it keeps the county from having to finance capital outlay notes along with the associated interest and fees. It also avoids the use of operating revenue on nonrecurring expenses, keeping the tax rate down.
With all of that as background, I will move on to the meeting notes. The evening began with a packed house in attendance for the 5:30 PM Public Hearing. The floor was opened for those in attendance to speak. Those that had previously contacted the County with a request to speak were allowed to go first with others following. Many commented about the proposed tax hike, raises, etc., just as you would imagine. When the Public Hearing ended at 6:00 PM, there was still a gentleman standing that wanted to speak. I asked the Mayor to allow the man to speak, and he granted the request after calling the special called meeting to order. With public comments finished, we moved on with the meeting.
An issue with assessed property values was brought to our attention by Finance Director Nathan Brock. The initial statement of estimated value of current property in Cumberland County based on 2015 assessments was $1,480,294,337. A clerical error made in the Assessor of Property’s Office on July 22, 2014 on a commercial property card belonging to Cumberland Properties and Investment Group, LLC was recently found and corrected. This resulted in a restatement of valuation with a new figure of $1,457,816,444. This drop in assessed value created a negative impact on the budget in the amount of $338,080. Although I am sure this was confusing to some in attendance, this was noted so that the Commission could take this figure into account when making budget calculations and decisions.
The first motion of the evening was to rearrange the voting order of the agenda by moving the resolution to set the tax rate to the last item. The thought behind the motion was that the Commission could vote on each expenditure in the other resolutions, and then fund those items that pass. The motion passed 17 – 1. I was the only dissenting vote. I voted against this resolution as I was worried that some Commissioners would agree to increase expenditures, but be unwilling to pay for those expenditures. The federal government does this all the time, but that is not, and should not, be an option for local government.
The first resolution was for a one-time contribution to the BOE for a portion of the K-12 math books and for the North Cumberland Elementary roof replacement as mentioned earlier. Up until a few hours before the meeting, I supported this resolution. I read the excellent write up by Heather Mullinix in the Crossville Chronicle concerning the special called Saturday meeting of the BOE. During that meeting, the proposed budget that came from several meetings with the Budget Committee failed on a 4 – 4 vote by the BOE. It seems that four of those at the Saturday BOE meeting understand that the budget is a process, and that compromise helps to move us forward. In reading the article, some on the BOE voted against the budget because they didn’t get everything they wanted. BOE Representative Blaylock thought the Commission was using the proposed one-time increase above minimum as a tactic to “line-item” the BOE budget. BOE Representative Bowman made several comments stating he believed the Budget Committee had approved the funds as some sort of grand political strategy that would cause the entire budget to fail. According to the Chronicle, Bowman went on to say, “I think that the reason that they offered the extra money on these resolutions is because certain individuals are trying to use us as a scapegoat to vote down full budget because they don’t want a tax increase”.
I don’t always agree with others on the Budget Committee, but I do not question their motives. I believe everyone that worked on the budget voted their conscience. There was no grand scheme or anything other than an attempt to help with books, and to put a well needed roof on a school building. In an attempt to put the scapegoat and line-item accusations to rest, I made a motion to table the resolution until the BOE could get their act together and come back to the budget committee with a more unified request. The motion also set the BOE budget to the state required minimum increase. There were some inaccurate statements during the discussion that followed. For instance, Commissioner Hyder stated that she heard the BOE did not use the money given to the BOE last year for social studies book replacement. She said that she heard only $29,000 was used, when in reality approximately $419,000 was spent on those books. When the discussion was over, the vote to table passed unanimously, removing the $459,000 contribution.
The second resolution concerned the distribution of past-due liquor-by-the-drink revenues for the BOE. This resolution ensured the money was distributed in a manner that doesn’t require the County to increase the Maintenance of Effort to the BOE. This resolution protects the county from increased expenditures caused by back pay of these revenues, and was unanimously passed.
The third resolution dealt with the approval of the revised Wage Scale for Cumberland County General Government employees. Contrary to some reports, the vote passed 12 – 6, with Commissioners Isham, Hassler, Stone, Davis, Lowe, and Farley voting against. Commissioners Gibson, Carter, Turner and Claflin declared a conflict of interest prior to their vote in favor of the motion as they are county employees.
The fourth resolution was to establish a Cumberland County Sheriff’s Department Wage Scale. This motion passed 15 – 3, with Commissioners Isham, Hassler, and Stone voting against. Commissioners Gibson and Claflin declared a conflict of interest prior to their vote in favor of the motion as they are county employees.
The fifth resolution was one to modify the Personnel Policy, granting the new welfare benefit of fully paid individual health insurance for county government retirees with 30 years of service. This was addressed in last weeks’ newsletter. I believe this is bad fiscal policy that is going to cost the county significant money. Commissioners Rimmer, Dyer, and Stone each gave solid financial reasons as to why they would vote against this new benefit. Several other commissioners mentioned that they have a conflict of interest, but would be voting in favor. I said in the meeting what I have said here earlier. I can explain and defend why I believe our County employees should be paid a fair wage, but I cannot defend this new Cadillac benefit. We have just witnessed the U.S. automotive industry fight through getting rid of these types of benefits. At the same time, the State of Tennessee has done away with this benefit as well. If it were a cost saver, or even budget neutral, public and private entities would not be shedding it.
I will vote no on this item on the merits alone if and when the time comes. At this point in the meeting, I mentioned that I had emailed the County Attorney asking two simple questions concerning this resolution. I asked him these same questions at the meeting. The first was if the County Commission Rules gives the Rules Committee the authority to make suggested changes to Personnel Policy. The answer was no. The second question I asked was in reference to Tennessee Code Annotated (TCA), the laws of our state. I mentioned that TCA 5-23 specifically spells out the process that the county must follow when creating and modifying Personnel Policy. I asked the County Attorney if that process was followed when this resolution was created. The answer was no. At that point, considering the fact that the Commission was not following the Commission rules or state law, I made a motion to table the resolution until the rules and law were followed. The vote to table was approved unanimously.
The sixth resolution was the passing of the actual budget for fiscal year 2015 – 2016 as amended during the prior votes. The resolution passed 11 – 7, with Commissioners Hyder, Isham, Hassler, Davis, Lowe, Carter, and Wilson voting against. At this point, we had an approved appropriation resolution that passed with fewer votes than the wage scales above. This caused me concern.
Finally, the seventh and final resolution on the agenda was to set the tax rate for the fiscal year. Commissioner Rimmer did some basic math and calculated that with the changes made at the meeting, five cents was now needed to keep a proper fund balance, with two of those pennies being used to create a capital fund. The proposed tax rate was:
This was possibly the hardest vote I have had to cast in all of my years of service to the county. Some think that voting to increase taxes comes easy to those in government. That may be true at higher levels of government, but I live here in Cumberland County, and my votes affect those that I see on a daily basis; family, friends, church members, and co-workers. These decisions affect my finances along with everyone else, and I do not take these choices lightly. I believe we should create a local government with as small a footprint as possible, and then we must fund it. The final vote on setting the tax rate with a five cent increase was 9 – 9, with Commissioners Scarbrough, Hyder, Isham, Hassler, Davis, Lowe, Carter, Wilson, and Farley voting against. With the vote being tied, the Mayor cast the tie breaking vote against the increase.
This is the specific reason that I voted against the motion to move this item to the bottom of the agenda. I understand the reasoning behind the motion to rearrange the agenda, but the reality is that it is easier to vote for an increase in spending than it is to actually pay for it. Of course, this didn’t end the night as the Commission is bound by state law to set a tax rate. It may be the same rate or a different rate, but a rate must be set.
At this point, several possibilities were discussed in an effort to come to some sort of agreement. A motion to recess until 6:00 PM the following day was defeated 6 – 12, with Commissioners Dyer, Scarbrough, Gibson, Carter, Wilson, Farley, Turner, Claflin, Rimmer, Geisler, Kinnunen, and I voting against.
After more discussion, Commissioner Wilson made a motion to raise the property tax rate by three cents, and to move two cents from debt service for one year only. This would create a budget that is close to balanced while leaving a reasonable fund balance. The vote was 13 – 5 in favor, with Commissioners Hyder, Isham, Hassler, Davis, and Lowe voting against. Although this is by no means a perfect solution, I voted in favor of the motion. The final tax penny allocation is as follows:
I want to thank those of you that made it to the end of this newsletter. I know there are many that take county government seriously. I am one of those as well, and I thank you for allowing me to serve the 4th District and Cumberland County. If you have any questions or comments, please contact me at any time.
Board of Commissioners
4th District Representative