Shelby County Commissioners approved a three-cent reduction in the county property tax rate Monday, June 12, on the first of three readings but delayed a vote on the operating budget resolution for more discussion about how to account for a cut in the tax rate.

The proposed tax rate of $4.10 – a three-cent reduction in the certified tax rate of $4.13 approved by the state – would come from the three cents Shelby County Mayor Mark Luttrell proposed to go from debt service to a pay-as-you-go fund for smaller capital projects.

“Our position is that if it’s the will of the commission to cut the tax rate, we will find a way to do that,” county chief administrative officer Harvey Kennedy told commissioners. “But we really need those three cents worth of revenue going into the pay-as-you-go fund. We strongly recommend that you take a look at the general fund, which is where the discretionary spending is located. And consider cuts to the budget at that point.”

County finance director Wanda Richards said the three cents on the county tax rate at stake is actually 3.7 cents to go to the new fund Luttrell proposed. The three-cent figure was before the current property tax rate of $4.37 was adjusted and approved by the state at $4.13 to create the same amount of revenue for county government when the 2017 countywide property reappraisal is taken into account.

That puts the operating budget $1.6 million in the red over and above the $732,515 of red ink without the proposed tax cut.

“I’m willing to find some way we can all move together on this,” said commissioner Heidi Shafer, who proposed the tax cut last week.

Commissioners will discuss the tax rate and the operating budget in committee sessions next week before a second reading vote on the property tax rate at their June 26 meeting.

Also essential to the calculations is an estimate of what kind of surplus or fund balance county government will have at the end of the current fiscal year. Kennedy said the administration should have an estimate for the commission to consider at next week’s committee session.

There were six votes to advance the tax cut on first reading with seven needed on third reading. Commissioner Walter Bailey voted no and commissioners Willie Brooks, Reginald Milton, Eddie Jones and Van Turner abstained.

The commission approved the resolution for a capital budget of $127.1 million in the fiscal year that begins July 1. Of that amount $69.2 million will go to the seven public school districts in Shelby County based on average daily attendance with Shelby County Schools getting 80 percent.

Commission budget committee chairman Steve Basar has said that realistically all of those projects will not get done in the new fiscal year and will be held for future fiscal years. Capital or construction projects are typically done in several phases over several years.

The SCS capital funding secures the school system’s plans to build new larger Alcy and Goodlett Elementary Schools on the sites of those two existing schools and consolidate students from other nearby schools that would close in the process. The funding also sets the stage to move ahead with discussions about a new Woodstock K-12 school in north Shelby County on the site of what is now Woodstock Middle School and close Northaven and Lucy Elementary Schools in the process.

For all of the complications surrounding the tax rate calculations and budget math, the commission spent most of its time Monday debating a $1.9 million contract with Clarion Security to provide private security service at county government buildings starting with the new fiscal year.

The contract was rebid last year after commissioners found out the first contract would not be subject to percentage goals for minority and locally-owned businesses the commission established based on a disparity study.

There was a contract extension with Allied during the rebidding. Allied is the Pennsylvania-based security company that would lose the contract at the end of the current fiscal year to Clarion, a coalition of local and minority-owned security companies.

The single-year contract has options to extend the agreement with Clarion for two more years making it a $6 million contract.

The commission delayed a vote on the contract by a 7-6 vote after a lot of debate.

“This is one of the best vetted contracts of my time on the commission,” Shafer said.

Bailey questioned whether Allied guards hired by Clarion would take a cut in pay and/or benefits. The pay is about the same and the benefits are among the areas commissioners will explore in committee next week.

“These employees are on their hands and knees begging us,” Bailey said of the pay and benefits consideration. “Let’s get a consultant. We don’t know.”

Shafer said it was instead a matter of Allied executives being those “who are well placed” lobbying commissioners to keep the contract.

As the debate continued, there were several clusters of commissioners caucusing in the commission chambers.

“Are we going to have five meetings going on,” commissioner Mark Billingsley said at one point. “If we’re going to cut deals on the side of the room then it’s time for me to leave the commission.”

Commissioner George Chism said Clarion meets and exceeds the percentage goals for minority and locally-owned businesses.

“This is what we said we were going to do,” he added. “They’ve been vetted and vetted and vetted. I just don’t understand.”

But Bailey and others favoring the delay said most of the guards employed by Allied are African-American, in many cases working that job as a second or third job.

“It’s not so much about who gets the contract,’ said commission chairman Melvin Burgess. “We’ve got to look out for the well being of their families.”

Jones said Clarion had pledged to consider Allied employees with experience working county buildings with a pay bump that is equal to their pay at Allied and a week of vacation at the start for those with at least two years of experience. And Allied pledged to find other assignments for those county building guards that Clarion doesn’t hire.

“I don’t see where anybody is going to lose anything,” Jones said.

In other action Monday, the commission approved a $4 million contract with Jaycon Development Corp. for the renovation of 1060 Madison Avenue, the county forensic center until 2012 which is to become the new location of the Rape Crisis Center and the Crime Victims Center.

The commission approved a $2.3 million contract with Damon-Marcus Company for an HVAC retrofit and a replacement at Agricenter International, 7777 Walnut Grove Road.

And there is another $2 million for construction of the West Tennessee Veteran’s Home Project, a $30.1 million project with federal funding paying 65 percent of the cost, and the state another 35 percent. The $2 million in county capital funding approved Monday is part of $10.5 million local match – the rest coming from private donors and corporations.

A $344,000 contract with Castle Black Inc. approved Monday is for design and construction of a new 21,000 square foot office and storage building at the new county cemetery on Raleigh-Millington Road. The new 43 acre cemetery and the accompanying building should go into use in the spring of 2018 as the existing county cemetery on Ellis Road reaches capacity, said county public works director Tom Needham.

And the commission approved up to $540,000 for post-booking jail diversion services for the mentally ill through Alliance Healthcare Services Inc. as part of the Jericho Project. Jericho coordinates supervised community release options in Shelby County Criminal Court.