Shelby County Commissioners set the tone for the upcoming county government budget season Monday, April 17, with approval of a refinancing of county debt with up to $120 million in bonds over time.

And the refinancing makes brighter a line between the administration of County Mayor Mark Luttrell and commissioners over the use of county surpluses.

In this case, it was the use of $20 million in the county’s debt service fund surplus or fund balance. The administration’s plan was to use $20 million from that reserve instead of issuing bonds in that amount.

But commissioners approved an amended version of the refinancing resolution that holds the $20 million in the reserve at least for now.

Commissioners said they want the county’s financial position to be more flexible. County chief administrative officer Harvey Kennedy said the administration could live with the decision but pointed out it probably adds about $1.3 million in debt service. Kennedy pitched a lower $10 million use of the reserve earlier, which was rejected by the commission.

Commissioners said they could change their mind and use the $20 million in reserves later in the budget process if warranted.

County Finance Director Wanda Richards said the county is probably 18 months from another long-term bond issue.

The county budget season is expected to include more discussion by the commission of some kind of county property tax cut. That would be separate from and after the county sets a new, lower recertified county property tax rate that takes into account the recent property reappraisal for tax purposes. Several commissioner favor such a tax roll-back and Trustee David Lenoir has said he also favors such a tax cut.

The reappraisal reflects a 10-13 percent increase in residential property values countywide and a 20 percent increase in commercial property values across the county. State law requires a resetting of the tax rate after such a reappraisal to produce the same amount of revenue the current tax rate produces. Because of that requirement, the new tax rate to generate the same amount of revenue – before any consideration of a tax cut -- is expected to drop.

Kennedy said the administration expects to have a “small” budget surplus at the end of the current fiscal year on June 30 and will have a total fund balance or reserve of around 28 percent of revenues.

Much of the discussion at Monday’s commission session across several items was about a larger share of county government contracts and spending for minority and locally-owned businesses.

Commissioners pressed for the use of more local bond counsels on county government bond issues. And the commission approved two design contracts totaling $3.2 million for planning and design work on anti-flooding projects that are part of a $60 million federal resiliency grant the county won for three of the projects across Shelby County to be built or otherwise in place by Sept. 30, 2021.

Commissioners pushed for more assurances that the administration would push for the use of minority and local subcontractors in the federally-funded projects. The federal standards require contractors to consider using minority businesses. It doesn’t require it.

And minority contractors complained Monday that they are being overlooked by the general contractors on the design work.

County Public Works Director Tom Needham pushed for passage of the two contracts after several delays in recent weeks. He said the contracts so far are a small part of the dollar amount and contracts to come in the next two and a half years.

He said minority-owned businesses are being considered and added further delays could jeopardize the federal funding.

But commissioner Van Turner said he and other commissioners would continue to push on the issue.

“We understand that you get it,” he told Needham. “From a cognitive standpoint, we are all there. I don’t want the persons who were bold enough to bring this up to be retaliated against. … Those folks are still not engaged. And we decided this two, three months ago. … We want the process to yield results.”

Some commissioners agreed on the general point but also expressed concern about the commission directing contracts to some sub contractors.

Commissioner Steve Basar specifically used the term “steering” and drew a sharp response from Turner.

“What have we been doing the last 30 years, 40 years?” he asked. “African-American and women-owned companies have not been getting the contracts. They have not been steered toward any of the disenfranchised folks. … We’ve been to a point now where we are just going to have to shut it down until we can get some progress. There’s an excuse every time.”

The commission also approved Monday the creation of a new “chief supplier diversity officer” to be appointed by the commission chairman and work within the administration’s Equal Opportunity Compliance office.

But the commission delayed creating three new full-time positions within the EOC office amid a discussion about a broader role and more independence for them and the diversity officer to report findings to the commission independent of the administration.

The three new positions were described as necessary to certify businesses bidding on county government contracts as minority or locally-owned businesses. But commissioner Willie Brooks said he saw the positions as being more analytical.

Commissioners will discuss the matter next month in the first committee sessions of the month.

In other action Monday, the commission approved a $24,000 contract with John Pruett Architects for design of a roof replacement at the Orgill Park golf course clubhouse, 9080 Bethuel Road.

And the commission approved a $23,000 federal Homeland Security grant to upgrade monitors for the county Emergency Operations Center and for a three year license for software that will allow local emergency responders to better track barge and cruise line traffic on the Mississippi River at Memphis.

The commission also voted 9-0 in favor of a resolution by commissioner David Reaves urging the state to stop evaluating teachers based on the TNReady student achievement tests, which got underway across the state this week.

Reaves, a former Shelby County Schools board member, described the testing as “onerous” and

“a punitive measure.”

“We’re losing teachers. We can’t recruit teachers,” he said. “Today, it’s being used to penalize both students and teachers.”