June 2017 Commission Report

“Last year we said, ‘Things can’t go on like this,’ and they didn’t, they got worse.”  Will Rogers

Annual Budget
Traditionally, each June, the Blount County Commission adopts an annual budget and sets the property tax rate for the upcoming fiscal year (FY).  A fiscal year runs from July 1 to June 30th, which is why the commission usually adopts the budget in June.  A fiscal year is denoted by the calendar year in which the fiscal year ends.  For example FY 2017 ran July 1, 2016 through June 30, 2017.  Accordingly FY 2018 runs July 1, 2017 through June 30, 2018.

The Blount County Commission approved an annual budget in June of 2016 for FY17 that was $181,267,406 (see pages 105-107).  In June of this year, the commission adopted a budget for FY18 that is $195,958,364 (see pages 534-536).

Not all of this was an actual increase.  According to the county’s Finance Director (FD), Randy Vineyard, governmental accounting standards require some expenditures to be recorded twice.  Troy Logan, the fiscal administrator for Blount County School District told me that he couldn’t think of any expenditures that were recorded twice in the school’s budget.  Upon my request, FD Vineyard provided this spread sheet outlining the use of fund balance and the monies that are being accounted for twice.

According to the numbers provided by FD Vineyard, $5,381,930 is accounted for twice.  Based on these figures, that means that the commission adopted a budget that is $9,309,028 more than what it initially approved for the previous year, when the double accounting amounts are removed.  This is a huge increase for local government that will not be sustainable in the future without either growth in tax revenues or more tax increases.

The spreadsheet shows the county using $7,087,000 of fund balances from the various funds.  Some of the increase is for nonrecurring capital expenditures.  You can read my questions and FD Vineyard’s responses related to the use of fund balances here.  Please take the time to read this as it shows that $1.1M of fund balance may be used for corporate welfare for one company.

At the Agenda Committee meeting, I asked Mayor Ed Mitchell how much this secret company would receive from local governments (City of Maryville and Blount County) and the state of Tennessee.  He only knew what the county’s contribution will be.  Thus, local elected officials walk into these types of “deals” without knowing how much public money will actually be spent.

According to FD Vineyard the county’s General Fund grew to about $15M at the end of FY16 and an estimate for the end of FY17 had not been calculated in early June.  Property tax and federal inmate revenues may have been sandbagged in FY16.  Both came in higher than projected, and you were slammed with a higher property tax rate than necessary.  Some local elected officials may feel good about having accumulated such a large General Fund, but it came about as a result of two large tax increases (sales tax and property tax) not from being good stewards with your tax dollars.

$1.85M of fund balance will be used for Information Technology (IT) updates.  This is addition to the $4.1M that has already been spent for IT improvements and huge software purchases since 2014.  This new budget brings the total to nearly $6M that has or will be spent from 2014 through the end of June in 2018.

One would think that with such large expenditures that the IT Committee would be keeping a close watch on the various IT projects but it is not.  From June 2016 through June 2017 the IT Committee only met twice and during one of those meetings it lacked a quorum.  The Mayor canceled the other two meetings that were scheduled.

Blount County taxpayers will be forced to pay $96,717 in additional salaries and benefits to four office holders beyond the state mandated minimums.  These office holders are already some of the highest paid employees in county government and have been paid nearly double or triple the average salary of a Blount County citizen.

Chromebooks lease
The commission approved a 3 year lease agreement for Chromebooks for the schools.  I voted against this because the county will be paying interest when it does not have to.  The funds are available to purchase the computers without wasting any money on interest.

Medical plan changes
The commission voted to reduce the out of pocket maximum from $4,000 to $3,000 for health care and to charge $5 for the employee only dental plan.  The dental plan for the employee only is currently free.  The cost of the dental family plan is currently the difference between the price of the premium of the employee only plan and the family plan.  The dental family plan was also increases $5 and will become the difference between the employee only premium and the family premium, plus $5.  The county will be paying $22.14 a month for employees that are enrolled in either the employee only or family dental plans. These changes will take effect January 1, 2018.  The health care plans run the calendar year, rather than the fiscal year.

Interruptions continue
Commissioner Mike Caylor continued interrupting commissioners by twice declaring a point of order.  He appears to be abusing the power to raise a point of order to stifle discussion that challenges the status quo.

Up next:
The commission will look at hiring an architectural firm to renovate and/or expand the jail.

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