Mayor argues commissioners had resolution for fund balance vote
By Karen Sells
Establishing a minimum fund balance to ensure the county has adequate cash on-hand for operations is one of the best-management practices recommended to Washington County by its auditors, interim county attorney and financial advisor.
One of the immediate ways the policy could benefit the county is with the refinancing of the 2004 series of general obligation school bonds. “We’re not increasing the principal or the term, we’re just refinancing the balance,” Mayor Dan Eldridge said during the Nov. 25 meeting.
By taking advantage of the April 2014 call date and low interest rates, Eldridge said the county could realize estimated gross savings of $700,000 over the next four years.
Commissioner Ethan Flynn made a motion to approve refinancing the bonds. The motion was seconded by Commissioner Mark Larkey and passed with unanimous approval.
Commissioner Pete Speropulos asked what interest rate could be expected, and financial advisor Rick Dulaney, of Raymond James & Associates Inc., said he hoped to receive competitive bids during December. “We’re trying to jump ahead,” he said, referring to unpredictable rate changes in the new year. “I think the mayor is spot-on in trying to determine the maximum benefit.”
Eldridge then presented the recommendation from the Budget Committee to adopt a fund balance policy. A motion to approve the policy made by Commissioner Joe Grandy was seconded by Commissioner Ken Lyon.
“Mayor, this is not in our packet,” Commissioner Mark Ferguson said. “We’ve set a precedent, and we would need to suspend the rules (in order to vote.)”
The precedent Ferguson referred to, however, relates to resolutions distributed at the meeting, where commissioners do not have time to review beforehand.
Eldridge reminded commissioners a copy of the resolution had been forwarded to them by email and hard copy the Thursday prior to the meeting when it was realized that while the policy was in the packet, the corresponding resolution had not been included.
Speropulos made a motion, seconded by Flynn, to suspend the rules for a vote.
The motion did not receive the required two-thirds majority, with opposition coming from Commissioners Sam Humphreys, Alpha Bridger, Phyllis Corso, Mark Ferguson, Gearld Sparks, Roger Nave, Ben Bowman, Steve Light and David Shanks.
Eldridge referred to the motion’s failure as bad timing.
“You said bad timing. Could that affect the refinancing?” Larkey asked.
“It very well could,” Eldridge responded.
The discussion may have ended there if not for a comment regarding an upcoming trip to New York made by auditor Melissa Steagall-Jones. While providing an overview of the county’s fiscal 2013 financial report, which commissioners will consider during next month’s meeting, Steagall-Jones said Washington County received an unqualified opinion in the recently completed audit and noted that Eldridge and Dulaney would be traveling to New York during December to try to get a better bond rating.
At the end of her overview, Commissioner Pat Wolfe asked the dates of the trip, which Eldridge said are Dec. 2-3.
“The reason we’re going is to ask Moody’s for an upgrade on the credit rating of Washington County,” Eldridge said. The review from Moody’s Investors Service reflects the size of the county’s tax base, the strength of its financial position, and manageable debt burden.
“Here’s the big picture,” Eldridge said, reminding commissioners of the long-range facilities plan adopted by the Board of Education – a plan that will cost an estimated $214 million with Johnson City’s share included.
“We know we have to build some schools,” he said. “The situations in Boones Creek and Jonesborough are ones we have to deal with.”
The significance of approving the fund balance policy, according to Eldridge, is the example of good fiscal management it represents through implementing a recommendation made by the county’s auditors and financial advisors.
Wolfe suggested the commission reconsider its earlier decision. However, because he voted in favor of suspending the rules, commission rules did not allow him to make the motion.
A motion to reconsider could only be made by one of the commissioners who voted against suspending the rules. Bridger agreed to reconsider her vote and put the motion back on the table. The motion to suspend the rules passed during the second vote, with Humphreys, Ferguson, Sparks, Nave, Bowman and Light opposed.
Flynn made a motion, seconded by Grandy, to approve the fund balance policy.
Speropulos encouraged fellow commissioners to vote in favor. “We need to give the mayor and Rick tools to go to New York,” he said. “I’m asking each of you to put aside anything you’re thinking about and consider the people of Washington County. I think we need to look in our hearts.”
Corso said knowing about the trip earlier might have helped. “We lacked a critical piece of information,” she said. “This commission tends to get down to the last minute and panic, and panic has no perspective.”
Eldridge gave another reason. “Getting a credit rating upgrade is not a slam dunk,” he said, noting a refusal is not a reflection on the county’s financial strength. “We’re going in with a good presentation, but I’m uncomfortable talking in a public meeting about something that may or may not happen.”
Corso said she would have preferred to have the information.
The fund balance policy was approved, with Humphreys, Ferguson and Nave remaining opposed.