Skip to content Skip to left sidebar Skip to right sidebar Skip to footer

Eldridge breaks tie in Budget Committee standoff

Budget Committee members were divided on whether to include a list of expected capital needs during the next 10 years with their recommendation of a 23-cent tax increase.
The proposed Capital Investment and Funding Plan presented to the committee during its Sept. 3 meeting lists anticipated expenses during the next decade and the sources that will be used to pay for them. “This document does not set anything in stone,” Commissioner Mitch Meredith said.
Rather, the plan is intended to serve as a tool for the county legislative body to use as it moves toward a disciplined approach to capital investment, borrowing and tax increases. Meredith, who serves as the county’s director of finance and administration, said the plan is designed to be fluid and subject to change over the years as events and circumstances change, similar to a good business strategy.
General government expenditures listed in the plan include capital maintenance of existing buildings, a public safety communication system, and Industrial Park access and grading, among others.
The plan also includes $8 million designated for general school maintenance and technology, and another $6 million for the replacement of school buses.
Meredith said the plan for the Boones Creek K-8 was predicated on getting the design by January, which hasn’t happened.
“Action in the next month or two is paramount to being in by fall 2018,” he said, noting that construction would not commence until June, July or August of 2016.
According to Mayor Dan Eldridge, the Jonesborough K-8 won’t be considered until 2019 when the county has its first opportunity to restructure the $106 million in school construction debt taken on in 2007 in the form of an interest-only payment for the first 12 years.
Building both schools at the same time, Eldridge said, would require the county to utilize its entire debt capacity. “Who is in favor of that?” he asked, and no one responded.
Commissioner Joe Wise asked Eldridge if he is still in favor of the 23-cent tax increase the Budget Committee, during its Aug. 24 meeting, voted to recommend to the commission.
Eldridge said he endorsed the plan, but his first choice for the long term would be the alternative that proposed a 46-cent tax increase and the adoption of a pay-as-we-go policy, which would save the taxpayers $100 million and reduce the county’s dependence on borrowing.
“The 46 cents would be my recommendation,” Meredith added.
Wise asked why the committee wasn’t spending more time talking about this option, and Eldridge said none of the commissioners he spoke with are in favor of going ahead with that large of a tax increase.
“I would recommend the capital investment plan that has been presented with the 23-cent increase,” he said. This funding alternative includes additional tax increases of 11 cents in 2020 and 4 cents in 2022.
Meredith outlined the process to implement the immediate increase, with the first step being the adoption of the Capital Investment and Funding Plan by the full commission. An endorsement of a tax rate increase would be next. To accomplish this, the commission would have to rescind the tax rate levy it set in July and adopt the new one at the Sept. 21 meeting. The final action would be the adoption of a capital investment budget.
Commissioner Rick Storey said he has been asked if the increase could be phased in at 4 or 5 cents per year rather than all at once. While Meredith said he has not run the numbers for an incremental increase, he predicted the debt financing would be higher and the county would not meet its goal to be debt free by 2037. “It’s kicking the can down the road,” he said.
Commissioner Todd Hensley said he thinks the capital improvement plan is a great business tool, but he is struggling with the sense of urgency that he feels was a little artificially inflated. “Is there any way to fund the immediate needs and have more time to consider a long-range plan?” he asked.
Meredith said it would take a 35-cent tax increase to fund the $6 million in immediate needs.
He went on to define the capital plan as a road map. “Each project will have to be voted on separately.”
Eldridge said determining a stream of revenue is necessary for a 10-year plan, but neither the Budget Committee nor the commission is being asked at this time to vote on the projects that will be included.
Wise disagreed with raising taxes for a list of things that have not been identified. However, Eldridge said he is not willing to repeat the actions of a former commission, which voted to take on $100 million in projects with no funding mechanism.
The other two options for funding the current proposed plan are a quarter-cent increase on the sales tax or the addition of a wheel tax, he said.
Storey said the committee needs to move the capital investment plan forward to the full commission, but Wise argued he would like to see the project list and the tax increase separated. “We will be setting a new tax levy in 10 months,” he said. “(Commissioners) who vote against it may just not like the way it was rolled out.”
Hensley asked if another alternative could be adopted at the September meeting in the event the commission does not approve the 23-cent recommendation. That would be allowed, according to Meredith, because the public notice issued for the meeting will indicate the possibility.
Commissioner Joe Grandy made a motion to recommend the adoption of a 10-year capital investment plan funded by a 23-cent increase in the tax levy that would be allocated to the capital projects fund. “Nothing about this is easy, but there is no magic wand,” he said.
Storey seconded the motion, and he and Grandy voted in favor.
Hensley and Wise were opposed, and Eldridge broke the tie with an affirmative vote.
The Budget Committee will meet again Wednesday, Sept. 9, and Eldridge asked members to be prepared to discuss the needs that must be funded during 2016.