Tonight's meeting of the County Commission was a regular monthly meeting - however we had been expecting to discuss our budget for the FY 2019-2020. A budget which had been drafted by the Mayor and approved by the Budget Committee for presentation to the full Commission was put before our body. There were several issues that concerned this Commissioner about the proposed budget:
Passing inaccurate budgets that do not truly and adequately address our operating costs has led to the depletion of our reserve funds and the debt situation we find our county in to date.
A vote was taken on the budget which failed 0-17. Continued budget meetings will be convened next week on Monday evening.
To My Constituents,
I hope that your summer has been filled with fun, food and family! By now, most of you have read the report in The Newsleader which describes the recent discussions of the County’s Budget Committee. As I am not assigned to this committee, I have waited to see what options are proposed before making any statement. On Monday night, July 29th, the full Commission will discuss the budget recommendations and I will report to you the details of those discussions. In the meantime, I want to provide you with some general information that is pertinent in our budget conversation:
The State of Tennessee and its counties begin their fiscal year on July 1st of each year. All budgets are due June 30th; however, the State allows a grace period to accommodate counties that have problematic issues.
Decatur County has not only missed the budget deadline, but did not even begin serious discussions of our finances for the next fiscal year until the 3rd of July.
This action – or lack of action – appears to be indicative of our attitude toward our own governance…apathy. Not only is this apathy by the government officials, but also apathy in us – the citizenship. We have developed an attitude of indifference toward our county; toward planning for our future, to growing our economy and bringing in jobs, and, even, taking responsibility to do our civic duties by participating in the governance or community affairs. We have become complacent and it has cost us industry, jobs and growth, as well as the tax base which would have been generated from such.
As the years roll by the cost of living has continued to increase but our county government has not acted in your best interest to address the escalation on an annual basis and adjust our tax rates to accommodate the additional costs. We have not insisted that our officials take action. This is the history which brought us to our current state of affairs.
So, what is the state of our county? In a word, we are bankrupt. In the documents provided by Mayor Creasy, our general fund balance was listed at $310,000; and that was a couple of weeks ago. Payrolls must be funded with this money which will leave our county flat broke within a week or two. At this point we will no longer be able to fund our general services and, one would assume, that temporary layoffs and closures will ensue.
THIS IS UNACCEPTABLE. This is negligence - by us all.
This commissioner has been very concerned about our financial state for many months. I have consistently asked how much money we really have, what our true debt is, and what is the plan for the upcoming fiscal year. Neither the Mayor nor the Commission have seemed interested to discuss these issues. At the Mayor’s request, the Commission approved a loan of $975,000 last September which was to be used to replenish our general fund after it had been depleted with repeated funding of the hospital.
We all knew that this loan was due to be repaid at the end of our fiscal year on June 30 as required by Tennessee law. Repayment of the loan plus applicable interest was to be secured by the revenues generated from the property tax collections of February 2019. This meant that most of the tax revenues we collected in February, which would be the normal monies used to fund the upcoming fiscal year, were already earmarked to be used to repay this loan; leaving us without sufficient funds to operate in the new fiscal year.
What we did not know – and still do not - was how we were going to fund our upcoming annual budget.
Being an arm of the State government, a county must comply with certain statutory rules. One of these is that a county cannot take out a loan for operating capital; it must be able to fund its operations through its appropriate tax revenues. Loans for a government entity are most often in the form of bonds. These are used to finance large capital expenditures, such as new facilities, schools, jails, courthouses, etc. The Comptroller’s office of the State must approve all major monetary actions taken by counties, such as loans or bonds, or major transfers of money from one fund type to another (i.e. highway fund to general fund, or school fund to hospital fund, etc.).
According to State officials, in a situation where a county would become bankrupt, the State would have to issue a funding bond, which is a temporary bailout. At this point, the county becomes a temporary “ward of the State” and all finances are managed by the State. Every penny spent must be approved by the State – the county government would no longer have the power to set or regulate financial decisions.
Additionally, to rectify the county’s financial position, the State will assess the budgetary needs of the county and set tax rates which will fund an appropriate budget and reserve. Counties are required to keep a percentage (no less than 10%) of their total budget in a reserve account to offset emergency spending.
Currently, our county is without sufficient funds for a budget of any amount, moreover for adequate reserves.
The state of our county is extremely perilous, and we will all feel the results of the measures to rectify it. I urge all citizens to become aware of this situation and join the Commission on Monday night to discuss our limited options.