County seeks budget advice

Wednesday, March 25, 2015

Bedford County commissioners are looking for advice about how to meet the county's needs -- such as a new jail and a new Cascade High School.

The issue of how to pay for major capital expenditures was on the minds of the county's Financial Management Committee, which met Tuesday night.

UT help

The county has asked the University of Tennessee County Technical Asssitance Service for help on long-range financial planning; CTAS officials weren't available when first asked, but County Finance Director Robert Daniel told the committee he will check back.

In the meantime, Daniel will work with County Mayor Eugene Ray to try to prepare a 10-year capital outlay plan similar to the type that's the school system has been working on in recent months.

County commissioner Linda Yockey told the committee that the commission needs information and options -- such as how much would be raised by a wheel tax, or how much increase in property tax it would take to fund a certain-sized project.

"A lot of people need a lot of things," said Ray. "It's not just jails and schools; you need money to operate every day."

Borrowing

The county would have to borrow money for either a school or a jail -- but it would then need additional revenue to make the annual payments on that debt. It was estimated that the annual payment on a $20 million bond issue would be about $2 million, the equivalent of about 30 cents on the county's property tax rate.

"As far as how we pay for it, there's not many options," said Daniel.

"Wheel tax and property tax," said Ray. "If they vote down a wheel tax, the commission can vote a property tax."

Two options

The commission really only has two options. The first is to pass a wheel tax, which is a tax on motor vehicles. If the commission were to approve a wheel tax, which must be done on two separate readings, voters would almost certainly sign a petition requiring it to be put to a referendum, as has been the case in years past.

If a wheel tax is not passed by the commission, or if it's passed by the commission and then rejected by the voters, the only other option would be to increase the property tax. Some commissioners, however, have said in the past that it would be fairer to use a wheel tax, since that would directly affect more county residents.

Start urged

Commissioner Don Gallagher, a member of the finance committee, said it would be better to get the process in motion and make incremental changes "before we hit the wall" and a crisis happens.

Commissioner Julie Sanders said the county needs CTAS's guidance to be able to know its true financial situation and debt capacity.

Apart from the question of long-range plans and capital expenses, the county's regular annual budget process is about to begin. Daniel said he'd soon be announcing budget hearings for departments and for agencies requesting the county's support.

Good, bad news

The county did get some good news on tax revenue. Current-year property tax collections and sales tax revenue are both up strongly compared to the previous fiscal year.

Prior-year property tax collections -- money received from delinquent taxpayers in payment of their older tax bills -- are down, as are circuit and chancery court collections, but the increases outweigh the decreases.

The county got some bad news last week, however, with the news that a jury has awarded a fired county jail employee $385,000 in damages. The judge's final ruling hasn't yet been issued. It looks as though the county's insurance company will pay only about $75,000 of the damages, said Ray.

Mid-year changes

In other business Tuesday night, the committee recommended routine mid-year amendments to several county budgets.

Such budget amendments shift money in order to account for unexpected revenues and/or expenses.

Longview return

The finance committee also voted to recommend that the county give the former Longview Community Club back to its trustees.

The club, which is currently inactive, gave its clubhouse and property to the county two years ago with a written agreement that the county would build a fire station there within three years. It now looks like that's not going to happen.

Club members say the abandoned facility is deteriorating and being vandalized. The property won't automatically revert to the trustees until May 2016, but the club is asking the county to go ahead and acknowledge that it doesn't plan to use the site and give it back early.

The county commission's courthouse and county property committee gave its blessing to the idea last week and referred the matter to the finance committee, which agreed Tuesday night and recommended the transfer to the full county commission.