VOL. 132 | NO. 118 | Wednesday, June 14, 2017
County Commission Debates 3-Cent Tax Rate Cut
By Bill Dries
Shelby County Commissioners approved a 3-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 the tax-rate cut.
The proposed tax rate of $4.10 – a 3-cent reduction in the certified tax rate of $4.13 approved by the state – would come from the 3 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 3 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 clarified that the amount is actually 3.7 cents slated to go to the new fund Luttrell proposed. It was proposed 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 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 at next week’s committee session.
There were six votes to advance the tax cut on first reading; seven will be 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 capital projects will not get done in the new fiscal year and will be held for future fiscal years. Capital or construction projects are typically completed 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 two existing school sites and consolidate students from other nearby schools that would close as part of 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.
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 nearly $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 a matter of “well placed” Allied executives lobbying commissioners to keep the contract.
As the debate continued, several clusters of commissioners began 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,” Chism 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. Allied pledged to find other assignments for county building guards that Clarion doesn’t hire.
“I don’t see where anybody is going to lose anything,” Jones said.