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VOL. 132 | NO. 78 | Wednesday, April 19, 2017

Commission Draws Brighter Line on Surplus Use

By Bill Dries

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

Shelby County Commissioners are already making decisions that will determine the course of the budget season to come. 

(Daily News File)

The refinancing draws a line between the administration of Mayor Mark Luttrell and commissioners over the use of county surpluses.

In this case, it was the use of a $20 million surplus in the county’s debt service fund, or fund balance. The administration’s plan was to use that $20 million, but commissioners approved an amended version of the refinancing resolution that holds the $20 million in 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 had pitched a lower, $10 million use of the reserve, 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 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 comes with the recent property reappraisal. Several commissioners favor such a tax roll-back and Trustee David Lenoir has said he also favors a tax cut.

The reappraisal will increase residential property values countywide by 10 to 13 percent and raise commercial property values by about 20 percent, according to current figures. 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 – 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.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 56 295 6,392
MORTGAGES 26 180 4,035
FORECLOSURE NOTICES 2 27 694
BUILDING PERMITS 128 840 15,361
BANKRUPTCIES 31 153 3,270
BUSINESS LICENSES 7 43 1,302
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0