CC Notes – July 31^st 2017
Budget Edition

All commissioners were in attendance for the special called meeting for adoption of the County’s new budget for the 2017 – 2018 fiscal year. The evening began with two public hearings.

At 5:00 PM a public hearing was conducted covering the proposed budget. Before I go any further, I want to take a minute to thank the Budget Committee members; Tracey Scarbrough, Tom Isham, Rebecca Stone, Terry Lowe, Wendell Wilson, Roy Turner, Sonya Rimmer, and John Patterson. I am a member and the Chairman of the committee. I also want to thank Finance Director Nathan Brock and his staff, especially Jennifer Turner, for all of their work during this process. Creating a new budget is demanding at times and they have worked diligently to fulfill requests from the committee and to answer all of our questions so we could make the best decisions possible for Cumberland County.

The budget process is long and difficult, but we managed to work together, through agreements and disagreements, and still get along and act in a professional manner. We began work on the budget back on April 20, 2017 with an all-day budget hearing. Since then we met many times (we all knew to keep our Tuesday and Thursday evenings open) and put in many hours toward completing this budget. In the end, we were able to fund some of our priorities, including pay raises on the new pay scale, while others had to be put off. The new Board of Education (BOE) minimum funding formula from the State of Tennessee required approximately $536,000 in new money to go to the schools. That alone would be about a 3.5 cent property tax increase but we managed to cover that through growth and conservative budgeting in other areas. We were able to help keep the county emergency workers safe by providing two new ambulances, four new police cars, and new portable radios. The new Animal Shelter is fully funded as a holdover from last year’s budget, $250,000 was allocated for an industrial site building pad to help bring in more jobs, and maintenance on several buildings was also funded. These and other capital items will be purchased with one time money from the General Fund Balance. The goal of the County Commission and the Budget Committee is always to create an operational budget that does not require a tax increase while still meeting the needs of the county. We were successful in accomplishing that goal, but it did require turning down all requests for new personnel, as well as many capital requests. The operating budget totaled $97.7 million. 62% is allocated to the BOE and 27% to the General Fund. The Sanitation, Highway and Debt Service funds each accounted for 3-4% of the overall budget. After a budget summary was presented to the crowd, an open call for comments was given. No one wanted to speak, and I ended the public budget hearing.

At 5:30, a public hearing was conducted concerning adopting a property tax rate that exceeds the certified property tax rate. Last year, the County Commission set a property tax rate of $1.5275. Property values in Cumberland County went up in the recent reappraisal, so by state law the property tax rate must go down to keep a net neutral income. The certified rate given to Cumberland County by the State of Tennessee after the reappraisal is $1.5053.

In December of 2016, the BOE voted to request financing for a new school at Crab Orchard for approximately $9.3 million. The original Crab Orchard Elementary School, built in 1972 with mostly wood construction, has several severe problems that necessitated the need for this request including overcrowding, bad roof and decking, ADA accessibility issues, plumbing and electrical issues, HVAC problems, and issues with being properly fire rated. Heather Mullinix wrote an excellent article covering a joint County Commission/BOE work session last December that you can find here for more background: http://www.crossville-chronicle.com/news/local_news/commission-gets-first-look-at-co-plans/article_8bb8f05c-c174-11e6-a35d-db6ab3d9daca.html. Renovations to the interior of CCHS as well as the track, field and stadium are also badly needed. Those renovations totaled just over $3 million. Both of these projects were listed as current needs of the school system in a ten year assessment given to the Budget Committee.

The Budget Committee met multiple times with BOE representatives concerning this large capital request. Gary Nelson wrote a great article with details of one of those meetings here: http://www.crossville-chronicle.com/news/local_news/budget-panel-requests-plan-from-boe/article_7285e17a-d773-11e6-9116-9f2d1b80b441.html.

In between those meetings, the Debt Service Committee met with our financial advisors in January of 2017. We discussed county debt and other issues such as bond ratings, ability to borrow, and interest rates. We also discussed the percentage of variable rated debt, which necessitates budgeting debt at a MINIMUM of 2% above the current variable rates, as well as keeping a solid fund balance. This necessity was created by previous Commissions borrowing too much money at variable and synthetic rates. Monies generated from this type of conservative budgeting have come to great use by the Commission when notes have required large payments due to market changes. As a side not, these types of loans are no longer allowed under our current Debt Policy. Amortization tables, current debt, and borrowing capacity was also discussed in our meeting with our financial advisors. When adding up all of the various factors involved, our advisors stated that we should fund new projects with new revenue and that we should not pass debt along to future commissions in the way it was done in the past. All of this also aligns with the county Debt Policy that was written during my first term in office as a County Commissioner. The policy was written to make sure that the county stays in a strong financial position, as well as to help prevent any rash decisions that would impact other commissions down the road.

After much thought and discussion, the Budget Committee voted to proceed with the Crab Orchard and CCHS projects proposed by the BOE. These projects, if passed, require a six cent property tax increase to fund, so the committee voted to request a property tax rate of $1.5653, which led to the second public hearing of the night.

These decisions are never taken lightly, but given the needs presented by the BOE, the Budget Committee voted unanimously to proceed and request the funds to do so. An article detailing some of the final meeting discussion concerning the subject was written by Gary Nelson and can be found here: http://www.crossville-chronicle.com/news/local_news/panel-oks-recommends–cent-tax-increase/article_6ffb78d2-659b-11e7-b7b2-a73670c74766.html.

Resolutions
Resolution 07-31-2017-1, fixing the tax levy in Cumberland County for the fiscal year beginning July 1, 2017 was the first item on the agenda for the special called meeting. The distribution of the proposed rate of $1.5653 was as follows:

The resolution passed 16-2 with Commissioners Terry Carter and Roy Turner voting against.

The next resolution, 07-31-2017-2, was to make the actual appropriations to the various funds, departments, institutions, offices and agencies of Cumberland County. In other words, the resolution was to approve the budget document that we have been working on since April. The resolution passed 18-0.

The third resolution was to approve appropriations to the non-profit charitable organizations for Cumberland County. Items like the senior citizens center, Rescue Squad, and Veterans Program are included in this $120,000 portion of the budget. These funds are budgeted via contract and require a separate vote. The resolution passed unanimously.

The final resolution of the special called meeting was to approve the issuance of debt not to exceed $12,350,000 for the work at Crab Orchard and CCHS. The vote to allocate funds to the project via the property tax increase was 16-2, but the vote to issue the debt was unanimous.

I plan on having the budget posted to my website, http://allenfoster.net, soon, so please check back often if you want to see it. Thank you for allowing me to serve the 4^th District and Cumberland County. If you have any questions or comments, please contact me at any time.

Sincerely

Allen Foster
Board of Commissioners
4^th District Representative
http://allenfoster.net