Jim Folts   Blount County Commissioner

 

“To stand in silence, when they should be protesting, makes cowards out of men” - Abraham Lincoln

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  • Blount County Commission - Thursday July 19th, 7:00 pm, room 430, Blount County Courthouse
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. Just send me an email at jimfolts@gmail.com, or give me a call at 995-9476.


The Blount County Commissioners


Citizens for Better Government
 


Current Information





June 2012 Report


The full Commission finally got around to discussing the budget, for the fiscal year that began July 1, in its June meeting. The discussion of the $168 million budget lasted less than an hour. The Commission also voted on a scheme, hatched by the Sheriff, to pay two property owners $235,000 of our citizens’ money to settle a law suit that seems to be the result of the Sheriff ignoring zoning regulations.

The Budget and Tax Rate
Actually, the Commission set the tax rate, and allocated all revenue raised before it even discussed the budget.

I suggested that the meeting agenda be changed to the more common sense approach of discussing the budget BEFORE setting the tax rate. Commissioner Burkhalter, argued, that despite the logic of this approach, the Commission had always done it backwards and he did not want to change. Actually, his statement that the Commission had “always done it this way” was wrong, but no one seemed to care. Only Commissioner Murrell and myself voted for the common sense approach.

This was just another example of the sloppy way budgets are prepared in our County. The citizens of the communities each Commissioner represents want the county budget to reflect THEIR priorities, NOT those of a few powerful office holders and special interests. Yet, the process we use to prepare the budget seems to produce the opposite result. A big part of the problem is that the current process gives the full Commission just one chance to discuss the budget. It is simply not possible to make sure a $168 million budget fits the priorities of the citizens, in one discussion, of less than an hour. The new budget is a result of this flawed process and has many problems.

First, it was not agreed upon by all parties. There is a $3.9 million gap between the budget adopted by the School Board and what the County budget provides.

Second, this budget takes nearly $1 million from the reserve needed to repay the huge $230 million county debt.

Third, this budget increases, rather than decreases, the budgets of departments, where waste has repeatedly been a problem. Consider these examples:
a.    Sheriff’s Dept. – UP 7.4%
b.    Circuit Court Clerk – UP 6.9%
c.    Other General Administration – UP 8.5%
d.    Parks & Rec – UP 14.7%. This department is currently holding nearly $1 million of unspent money. Why are we increasing the budget?
e.    Industrial Development Board – UP 23.7%. Why are we increasing the budget of a department that has saddled us with nearly $7 million in debt for an empty “technology park”, and a new industrial building that has sat empty for more than five years?

It is a shame that most other county departments have worked hard to reduce their budgets, only to see their efforts obliterated by a few wasteful spenders.

Most important, the new budget does nothing to address three very large budget problems. These problems are rapidly getting worse, and are attracting the attention of the bond rating agencies – not a good thing with the County is deeply in debt.

The first major problem is related to Post Employment Medical Benefits. The County is currently committed to pay 100% of an employee’s medical insurance costs from the time he/she retires, until age 65. The county retirement plan permits employees to retire after 30 years of service. If the employee decides to retire at age 50, the County must pay for all medical insurance costs until he/she reaches age 65. The county is not putting any money aside to pay this benefit. The amount of money the county is obligated to pay current employees for this benefit already exceeds $23.6 million. This obligation increased more than 20% in a single year. The cash the taxpayers are laying out to cover this benefit has nearly tripled since 2009 to more than $1.5 million per year. This rate of increase is quickly making this benefit a major financial burden for our taxpayers. It is exactly this kind of run-away benefit that put General Motors into bankruptcy a few years ago. And, this budget does nothing about the problem.

The second major problem not addressed in the new budget is the spiraling cost of the pension plan for county employees. The employees pay 5% of their salary toward the cost of their retirement plan. The taxpayers contribute another 12.39%. This is a 2.5 to 1 match of the employee contribution. Most taxpayers in private industry feel lucky if they get a 1 to 1 match on their 401k plans. More important, the cost to the taxpayers of this plan has risen by more than 20% in just three years. But, even these contributions are not enough to keep the plan afloat. In 2009, the last time the fund was looked at by an actuary, the fund was more than $19 million short of what is needed to pay the benefits promised to our current employees. The state has recently passed a new law to give counties more options in handling their pension plans. Many municipalities, including the City of Knoxville and Knox County are addressing the spiraling cost of their plans. The Blount County Commission has done nothing.

The third major problem not addressed by this budget is the termination of the $100 million worth of swaps the county has outstanding. This ‘can’ has been kicked down the road for years by two Commissions. These kicks have been very, very expensive. In September of 2009, the County could have terminated these swaps for $10 million. Today, the cost to terminate these swaps is nearly $27 million.


These retirement medical benefits, pension and swap termination costs add nearly $72 million to the county’s debt obligations bringing our total debt to over $300 million, giving Blount County the highest per capita debt of any County our size in the entire state. This budget does nothing about this problem.

It should not be a surprise a recent letter to our Finance Director from a bond ratings agency, asks specific questions about all these problems.  We don’t have good answers, because the Commission has not even discussed many of these issues.

This budget papers over serious problems. Worse, it provided a major increase to the “king of waste”, the Sheriff, who devours approximately half of the county general fund budget. It also left the Schools short of money. The Commission could have cut the waste, moved some additional money to the Schools, paid down some debt, dealt with the other major budget problems and still held the tax rate steady. Yet, the Commission approved this deeply flawed budget with only Commissioners French, Murrell, Farmer and myself voting against the budget.

In my opinion, there is a serious problem with the way we create a budget. A good budget process should address the major financial problems facing the county.

A good budget should implement the spending priorities of the community. Let me give you an example of what I mean. On a recent visit to one of our High Schools, a teacher showed me a white board that was black and unusable. It was completely worn out. On a visit to an elementary school, a very talented teacher pleaded for a $900 electronic white board, so that she could use some exciting new software to do a better job of teaching math. Yet, just in the last month, we have seen moves by the Sheriff to spend $230,000 of the citizens’ money on a barn for his horses, and $32,800 for a side-scan sonar set. I doubt that our community would rather the Sheriff have a horse barn and a sonar set, than our schools have usable white boards and teaching tools. Rather, these actions reflect a budget process designed to please the Sheriff and a few other powerful office holders and special interests.

We need a budget process that involves discussions before the entire Commission, beginning in March, NOT June. We need a process that addresses the serious financial problems facing the County. We need a budget process that listens to our citizens and reflects THEIR priorities. If you think I am correct on this, please contact the other Commissioners and tell them you want an improved budget process – NOW.

Sheriff Berrong tries to buy his way out of trouble – with your money
Over the last several years, the Sheriff has been quietly constructing what will probably be called the Sheriff James Berrong Police Academy. The only problem is the Sheriff never showed any justification for this very expensive project, and the Commission did not pass a resolution approving it. In the past, we sent our new deputies to a state training program, like most other counties. Now, our taxpayers must bear the burden of a costly training bureaucracy.

The Sheriff has used huge sums of drug seizure funds to construct this facility, which now includes several buildings, a hi-tech shooting range and a driving (race) track. It seems that he was able to pull all this off by leading Commissioners and others to believe that the drug seizure funds could only be used for training. Yet, other police departments have reduced the burden on their taxpayers, by using drug funds for purchasing police cars, in-car video systems, guns, bullet proof vests, car lighting systems, uniforms and communications equipment. Sheriff Berrong has usually used taxpayers funds for such things, preserving ‘his’ drug seizure funds for his budding police academy. This drug fund currently has nearly $1.5 million.

Even worse, it seems that the Sheriff may have ignored some important zoning regulations in locating this “training” facility. This became a serious issue several years ago, when he began running raucous training exercises, involving cars, motorcycles, sirens, squealing tires, and high speed chases around his driving track, late at night, when most people want to sleep.

The neighbors, who enjoyed their peace and solitude before the Sheriff showed up, asked the Sheriff to tone things down. When things did not improve, they appeared before the Commission, several times, asking for relief. They even played a recording of the racket they had to endure late one summer night. When the Commission did nothing, they sought relief under the county zoning ordinances. Finally, they sued the County.

All this led to a resolution that came before the Commission, that authorized the Sheriff to take $235,000 from the drug seizure fund to buy his way out of this legal problem, by acquiring his neighbors’ homes and properties. Of course, he might have simply changed the schedule for some of his “training exercises” and solved this problem, but apparently this did solution did not please him.

At the Commission meeting, I identified one potential problem with his plan (beside the waste of $235,000 of our citizens’ money). The Attorney General’s guide to the proper use of drug seizure funds seems to prohibit their use to acquire real estate. The Mayor’s attorney, who was defending the transaction before the Commission, admitted to being unaware of such a rule. He said he would look into the problem, but incredibly, told the Commission they could go ahead and approve this apparently illegal transaction. Only Commissioner Murrell and myself voted against this probable illegal resolution.



Only YOU can change YOUR government

Please also attend the Commission meeting Thursday, July 19th at 7:00pm in Room 430 of the Courthouse
.