28-cent tax hike proposed

This building, which until this month housed the Tennessee Rehabilitation Center, will be the new home of Bedford County Emergency Management Agency, the local Highway Patrol Station, a local emergency command center and -- later this year -- a driver's license testing station. Scott Johnson of BCEMA said it will cost $113,000 to renovate the building. Johnson said it may be three or four months until the driver's license testing station can be opened, but he said it will be open five days a week. (T-G Photo by John I. Carney) [Click to enlarge]

Bedford County Board of Commissioners' budget and finance committee, meeting Thursday night, recommended an increase of 28 cents per $100 assessed value on the county property tax rate.

A taxpayer with a home appraised at $80,000, leading to an assessed value of $20,000, would pay $56 more each year in property taxes under the increase.

Finance committee members struggled to cut budgets but say there's no way to cut further without reducing services. They say the increase is needed just to zero out the county general fund budget, leaving it with no fund balance whatsoever. They proposed several other ideas for building up the fund balance, which is necessary for cash flow purposes. These include selling some excess property next door to Bedford County Medical Center and selling the Medical Arts Building behind BCMC.

The committee has also proposed putting the revenue from the sale of BCMC into a special trust fund. This year only, the interest on that revenue would be put into the operating budgets. In future years, that interest could be used only on capital expenses.

There is also a possibility that the 28-cent increase could be reduced by several cents because of a miscalculation. The budget of Circuit Court Clerk Thomas Smith was moved into the county general fund this year; previously, the Circuit Court Clerk had been an independent fee-funded office. Committee members found the extra expense in the budget but, responding to a question from Commissioner Wayne Tucker, could not immediately find where in the budget the corresponding revenue had been added.

"If we're showing the expense, and there's money somewhere to offset that, we need to show it as revenue," said committee member Joe Tillett.

If, in fact, Smith's revenue has been overlooked, it could add more than $250,000 to the budget.

Rate increase

The property tax increase would take the overall county property tax rate from $2.49 to $2.77. This would be only the second property tax increase since the 1980s, following a 26-cent increase two years ago.

Even with the increase, Tillett noted that Bedford County would have one of the lower property tax rates in the midstate, citing a comparison chart which was published by a Nashville newspaper. Many of the counties with higher rates than Bedford's also have wheel taxes, which Bedford County does not. However, committee member J.D. "Bo" Wilson pointed out that comparison of one county's property tax rate to another's can be misleading, since not all counties are at the same point on their cycle of property reappraisals. At the end of each cycle, a county's property tax rate is adjusted downward to account for rising property values.

The proposed tax rate breaks down as follows:

County general fund: $1.41

Highway / public works: $0.05

Debt service: $0.02

General purpose school: $1.29

All of the rate increase is in the general fund budget.

Open meetings

The finance committee's special called meeting on Thursday followed a 4 1/2-hour meeting on Wednesday for which no public notice was given.

The Wednesday meeting was intended as a consultation with an auditor from the University of Tennessee's County Technical Assistance Service. Under other circumstances, said committee members, finance committee chair Roger Brothers might have conferred with the auditor individually, but Brothers is recuperating from heart surgery and so the remaining committee members met with the auditor as a group. They said they did not realize the meeting was subject to public notice requirements because it was a study session. Actually, the Tennessee Open Meetings Act does not exempt study sessions.

But committee members didn't just confer with the auditor or study the budget on Wednesday; they apparently made decisions, and several times at Thursday's meeting they made reference to having decided some issue during the Wednesday meeting.

There are no penalties attached to the Open Meetings Act, but it could be used to challenge any decision taken as a result of the illegal meeting.

Budget cutting

Before making their tax rate recommendation, the committee considered budget requests from several different agencies which are technically separate from the county but which receive the lion's share of their funding from the county and which function as if they were county agencies.

The committee had previously decided as an austerity measure to freeze its contributions to independent non-profit groups at their 2004-2005 levels. But Extension Agent John Teague of the University of Tennessee Extension office said that would prevent his employees from receiving the same 3 percent raises as other county employees.

Volunteer Fire Services Inc. Chief Mark Thomas, who is also a county commissioner, was actually prepared -- reluctantly -- to slash his budget as previously requested by the committee. But, unbeknownst to Thomas, the committee had decided on Wednesday to give VFSI its original budget request except for a requested increase in the amount paid to each volunteer station. The payment to each station will be held steady at $12,500, not increased to $15,000 as VFSI had requested.

"It's less harmful," said Thomas, "but then again it is harmful." Thomas noted that some of the county's volunteers are personally responsible for bank notes on their local fire halls or equipment, and up until recently volunteers had to purchase their own turnout gear.

Scott Johnson of Bedford County Emergency Management Agency (formerly known as Civil Defense) said his agency will have higher utility costs at its new, larger facility. BCEMA is taking over the former Tennessee Rehabilitation Center; in addition to BCEMA's own offices and storage, the building will house the local Highway Patrol station, an emergency command center and a driver's license testing station. Johnson said it will cost the county $113,000 (after homeland security grants) to renovate the building.

Johnson said the state has told him that the new driver's license testing station will be open five days a week. The last time the county had a station, it was open only two days a week.

The committee voted to fund BCEMS, VFSI and the extension office at their requested amounts (except for the payments to the volunteer stations).

The committee also approved an increase in its contribution to Tennessee Rehabilitation Center, reflecting the cost of the new TRC facility, but that money will be repaid by the State of Tennessee in the form of rent.

Revenue

The proposed tax rate increase would simply allow the general fund budget as now proposed to break even, without any fund balance. Commissioners have said a fund balance is necessary from a business standpoint, to help cash flow and from which to draw for unexpected expenses.

Committee members have several other ideas for building up the fund balance. They would like to sell, at auction, four parcels of property on Union Street southeast of Bedford County Medical Center. The properties were bought in the last decade for future expansion of the hospital back when it was owned by the county. Two of the houses currently house BCEMA and the Highway Patrol, which are preparing to move to the old TRC facility on Railroad Avenue.

The four lots would be sold at auction. Interested auction firms, willing to do the job for a 6 1/2 percent fee, would submit their names, and the winning firm would be chosen at random.

The committee also discussed sending out a request for proposals from those interested in purchasing the Medical Arts Building behind BCMC.

The finance committee will hold its regular monthly meeting on Tuesday, and at that time will tie up several loose ends related to other county funds. The finance committee's budget and tax rate recommendations will be on the agenda for the Aug. 9 commission meeting.

The new fiscal year actually began July 1, but the county is continuing to operate at 2004-2005 spending levels until the new budgets and tax rates have been approved.