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VOL. 132 | NO. 128 | Wednesday, June 28, 2017

County Budget Vote Delayed But Government Continues To Operate

By Bill Dries

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Shelby County government’s fiscal year begins Saturday, July 1, but the county won’t have a new operating budget at least until July 10.

That’s when the Shelby County Commission meets in special session to take up an estimated $13 million in amendments various commissioners are proposing to the budget proposal of county mayor Mark Luttrell.

The commission passed a continuing resolution Monday, June 26, after voting to delay a final budget vote until July 10, which could come after hours of debate on amendments.

The continuing resolution formalizes what would happen anyway – county government continues to operate on July 1 at funding levels in the current fiscal year.

“This is safer and cleaner,” county chief administrative officer Harvey Kennedy said of the resolution. “It’s a belt and suspenders. We would not shut down county government.”

Continuation budgets into the first month of the fiscal year are not unusual. County government’s property tax revenues don’t start rolling in at the outset of the fiscal year and the county uses its reserves or fund balance for cash flow until the tax money starts to come in.

Meanwhile, the commission approved Monday the second of three readings on a $4.10 county property tax rate that the commission can’t make a final decision on until July anyway under the county charter.

Budget amendments could have some impact on that property tax rate.

The $4.10 rate proposed by commissioner Heidi Shafer is a 3- to 4-cent cut in the certified tax rate of $4.13. The $4.13 rate generates the same amount of revenue for county government as the current $4.37 rate, taking into account the 2017 countywide reappraisal of property. The overall value of residential and commercial property in that reappraisal increased, leading to a lower property tax rate.

“There’s about a 10-cent spread that is pretty significant,” Luttrell said of the proposed $4.10 rate to what would be a tax hike of 7 cents if all amendments are approved and no other line items are reduced.

“I think we are ripe for a compromise,” Luttrell added. “We are willing to compromise.”

The administration hopes to preserve a shift in the property tax rate out of debt service to a pay-as-you-go fund to pay for more capital projects without incurring debt from financing those construction and renovation projects with bonds.

“By any means possible, we want the current obligations to be supported by current revenue,” said county finance director Wanda Richards. “It’s a best practice that we’ve tried to adhere to.”

But some commissioners want to instead reduce the tax rate – after years of talking about a possible tax cut – or at least keep the revenue fluid for uses other than establishing a pay-as-you-go fund.

Kennedy also added another dollar figure to the discussion Monday, estimating a $5 million to $9 million budget surplus when the current fiscal year ends Friday.

The commission never got beyond that Monday on the budget. Some commissioners came prepared for a lengthy debate and votes on budget amendments and some of those commissioners won’t be able to attend the July 10 special meeting.

“If there are certain things we need to take care of, we can just amend the (new) budget,” argued commissioner David Reaves, who is among those who can’t make the special meeting.

“Maybe that’s part of the strategy,” he wondered aloud. “We won’t be here. We won’t be able to argue.”

The centerpiece of Monday’s meeting was passage of a resolution that puts the commission on record as opposing an end to the Justice Department memorandum governing conditions at Memphis-Shelby County Juvenile Court.

Luttrell said he will veto it.

“Quite frankly, this is much ado about nothing,” he said before the 7-0 commission vote with four commissioners abstaining.

Luttrell, Juvenile Court Judge Dan Michael and Sheriff Bill Oldham have sought an end to five years of Justice Department oversight through a 2012 memorandum of agreement with county government. The three elected officials talked last month with U.S. Attorney General Jeff Sessions and formally asked for an end to the MOA in a June 9 letter to Sessions.

Sessions has not made any decision on the request to date. But in April, he ended Justice Department oversight of most of the areas in the memorandum, leaving the critical issues of due process and detention still under federal oversight.

“If you want to have any impact, why don’t you just sign a letter?” Luttrell told commissioners Monday. “I’m not going to sign what you pass. I’m going to veto it. It’s not going to have the county seal on it. … You are wasting a lot of time.”

The resolution by commission chairman Melvin Burgess followed surprise by some commissioners that they were not at least told of plans to end the MOA. In committee sessions last week, Burgess walked out of the discussion after telling Luttrell he thought the request to Sessions was “disrespectful.”

“We know he is not sensitive to minorities and civil rights,” Burgess said of Sessions. “There was no one at the decision-making process level of color. It didn’t look right. … It’s not time.”

Luttrell said it was disrespectful for Burgess to walk out.

Steve Basar

Emotions ran a bit cooler in Monday’s discussion. The flash point came when commissioner Steve Basar argued the commission shouldn’t have delayed a final vote on the county’s operating budget to debate the Juvenile Court resolution.

Van Turner

“We’re willing to debate this, but we’re not willing to debate the budget,” said Basar, the chairman of the budget committee. “I’m disappointed.”

“We’re talking about kids,” countered commissioner Van Turner. “They are being mistreated so badly that the federal government had to come in and say stop. We’re talking about kids that are being deprived of due process – kids who are being put in solitary confinement – kids who are being tied to chairs. You are going to ask me if this is more important than a budget? Hell yes, it’s more important than a budget.”

PROPERTY SALES 56 295 6,392
MORTGAGES 26 180 4,035
BUILDING PERMITS 128 840 15,361
BANKRUPTCIES 31 153 3,270