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VOL. 133 | NO. 65 | Friday, March 30, 2018

Funding Plans

County budget talks include proposed contract moratorium

By Bill Dries

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The subject of county government’s $18 million to $25 million projected revenue surplus didn’t surface once this week as the Shelby County Commission’s budget committee continues to prepare for budget season. The Wednesday, March 28, committee session was the first since County Mayor Mark Luttrell’s administration said it is estimating the surplus for the current fiscal year, which ends June 30, because of better-than-expected county property tax collections and fewer appeals of property tax reappraisals.

Past surpluses have led to debates on the commission about whether the surpluses are created by tax rates that are too high, and Luttrell and some county commissioners have differed about the use of the extra revenue.

After the 2017 countywide property reappraisal, the state recertified the county property tax rate at $4.13, down from the previous $4.37. That figure was reached by taking the new property values, which rose for many residents, and calculating a corresponding rate that would create the same amount of revenue the county had received under the old rate.

The commission then voted to reduce the recertified rate by another 2 cents to $4.11.

As Shelby County Commissioners begin preparing for the upcoming budget season, budget committee chairman Eddie Jones says his first priority is to deal with Shelby County Schools’ funding request, then to consider increases requested by other county offices.  (Daily News/Houston Cofield)

There were critics of the recertified rate at the time, including county trustee David Lenoir, who argued it was still too high.

Commissioner Terry Roland, who proposed the 2-cent reduction, said he wanted a bigger tax cut but didn’t have the votes for anything beyond that amount.

Roland and Lenoir are both running in this year’s Republican primary for Shelby County mayor along with Juvenile Court clerk Joy Touliatos.

Budget committee chairman Eddie Jones said his priority is to deal with the Shelby County Schools budget request in hearings first, followed by any increases requested by various divisions and offices of county government that are not included in Luttrell’s budget proposal.

The administration’s budget proposal includes its budget recommendations for independent elected county officials.

“A lot of the budgets are flatlined,” Jones said. “We want to be ready to flow.”

Commissioners also have said they are seeking to make decisions in this year’s budget season that will not commit commissioners elected in August to multiyear expenditures.

In addition to electing a new county mayor this year, voters will also be electing at least seven new members to the 13-member commission – replacing five commissioners who are term-limited and two others who have chosen not to seek re-election after one term.

Along those lines, the commission votes at its Monday, April 2, meeting on a moratorium on county contracts over $50,000 through the end of August, when the current commission’s term of office ends.

Commissioner Van Turner proposed the moratorium Wednesday after he and other commissioners complained that a $20 million multiyear contract for inmate medical services has no minority business bidders. The contract bidding terms also include a specific exemption from applying the county’s minority business ordinance to the contract.

“Someone got included within the actual ordinance an exception for inmate medical services. So unbeknownst to us when we were passing these ordinances a year ago, some clever person knew that this contract was coming up this year,” Turner said. “And they intentionally excluded the most lucrative contract we would vote on this term as being an exception for our MWBE (minority and women business enterprises) program.”

The resolution would allow exceptions to the moratorium for “health, safety and environmental” reasons. Any exception must be approved by a commission vote.

“If we allow these items to move forward, this-term commission locks in the next-term commission completely,” Turner said. “If we lock in three-, four-, five-year multimillion-dollar contracts, that essentially means that even if we are allowed to come back … we can’t touch these contracts.”

Turner is among the six county commissioners seeking re-election this year.

Meanwhile, the old Shelby Training Center – a 200-bed youth facility closed for nine years – could be the new detention center for Memphis-Shelby County Juvenile Court.

County chief administrative officer Harvey Kennedy told county commissioners Wednesday the administration is talking with Core Civic, the private prison company formerly known as Corrections Corp. of America, that owns the training center property at Old Getwell and Winchester roads, about a five-year lease.

The renovated facility would replace the existing detention center at Juvenile Court’s Jefferson Avenue site that is considered outdated.

Kennedy said the county and Core Civic are still talking terms of a deal but said it could be included in the administration’s budget proposal for the fiscal year that starts July 1.

If the county leases the facility, Kennedy estimated it could be ready for use in 120 days.

Memphis-Shelby County Juvenile Court Judge Dan Michael has called for a new detention center as well as an assessment center for juveniles brought to the court to determine if there are measures that can be taken short of taking them into custody.

The call has prompted some debate about whether there should be more emphasis on detaining juveniles only as a last resort.

At the budget committee session, Kennedy also said the administration is almost ready to unveil its plan for helping finance an expansion of prekindergarten in Shelby County for which Memphis Mayor Jim Strickland’s administration has proposed $6 million in funding – of a total of $16 million in local government funding.

Memphis Mayor Jim Strickland has proposed pre-K funding from a penny on the existing city property tax rate, along with revenue created when abatements offered as economic development incentives expire and property owners begin paying the full tax rate.

Those two sources are projected to create $6 million in revenue toward a prekindergarten expansion over several fiscal years. The city would put up $3 million from the city reserve fund to make up the shortfall until the revenue from the two sources meets the $6 million mark.

The Memphis City Council has approved the ordinances for the funding on the first of three readings.

Asked Wednesday if the county administration will propose including the county property tax increment when the same tax breaks expire, Kennedy said the county has some other options it is considering.

PROPERTY SALES 107 331 6,877
MORTGAGES 60 239 4,368
BUILDING PERMITS 190 508 16,423
BANKRUPTCIES 22 136 3,532