Tuesday, June 19, 2018

Here's how much Nashville tax revenue goes to developers instead of schools




The Tennessean, July 19, 2018 - The city diverted $9.3 million of property taxes from schools to pay off redevelopment loans — for downtown hotels, luxury condos and other projects. Such diversions have occurred for decades, but in the past two years they've grown quickly. This fiscal year's amount was about $1 million more than expected. (link)

Rod Williams comments: To be fair, some of the development would probably not have occurred  without incentives but one cannot say how much. Still, way to much money is going to developers rather than the city's needs.

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Budget and Finance Committee recommends tax hike budget by 7 to 6 vote. However ...

In a surprise move the Budget and Finance Committee of the Metro Council voted to recommend a tax hike budget. The budget that was expected to be the Council budget that had been developed earlier by the committee shifted some funding but did not raise taxes. That no tax hike budget was sponsored by the Committee chairman Tanaka Vercher.   

The tax hike budget was sponsored by At-large Councilman Bob Mendes and barely won approval by the Committee by a vote of 7 to 6. Under the Mendes budget the tax rate for most property owners would increase by 50 cents which amounts to a 16% property tax hike. That tax hike would generate $150 million which would fund a cost-of-living pay increase for Metro employees and it would fully fund the school board's funding request.

Confusingly, the Council also recommended the no tax hike Vercher budget by a recommendation of 9 to 3.  So, the Committee is recommending both budgets which means the Committee is not making a clear recommendation. With no clear recommendation from the committee, we probably will see a floor fight on Tuesday night. For more details, see The Tennessean's coverage of this development at this link.


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Monday, June 18, 2018

Metro's financial woes just got $23 milliion worse.

by Rod Williams - By the way city officials calculate the budget, there is a budget shortage of $34 million. That is to say the city will realize $34 million less in revenue than the city initially thought they would have. $26 million of that is due to successful challenges, mostly by large commercial interest, to the city's recent property appraisals. Another $8 million is due to the city getting less funding from the State for schools due to declining school enrollment.

Despite the city's population growth, there are fewer children being enrolled in Metro Schools. either because there is demographic shift and there are fewer school age children or because more parents are sending their kids to private schools or homeschooling.  It is probably some of both. One would think with fewer children to educate that would be a budget plus. One would think with fewer students to educate, that would save the city money.  The State does not cover the full cost of educating children so it is hard to understand why having fewer students is a hardship  rather than a benefit. If you think like that then you are thinking like a business man or someone who manages a household budget.  That is not the way bureaucrats or the school board or Mayor Bailey thinks about it.

In any event, these two factors constitute a $34 million shortage. In developing the budget, the
anticipated revenues and anticipated expenses have to match.  Most of the revenue comes from property tax and sales tax but there are also many other fees that contribute to the revenue side. Everything from parking tickets to fees for rezoning property and city auto stickers and dozens of other fees contribute to the city's revenue.  In the Mayor's $2.23 billion budget $23 million in revenue is anticipated to come from the sale of three city properties that have been declared surplus. This is one-time money and it is not wise to depend on one-time money for continuing expenses, but that is what the city is doing. This same revenue is also counted in the Council's substitute budget proposed by the Budget and Finance committee.

It is by no means a certainty that these property sales will take place. The three properties are in Edgehill, Green Hills and Charlotte Avenue near Sylvan Park. There are any number of things that could stop these sales. While I do not know the specifics of these three parcels, rezoning could be an obstacle. Often for a prime piece of property to get top dollar it must be rezoned. Often the completion of the sale is contingent upon the rezoning taking place. Rezoning is never a certainty.

There is already serious opposition to the sale of the Edgehill property. This property is a park that adjoins the Edgehill Apartments public housing project. It is the former site of the home of African-American folk artist William Edmondson. He was the son of slaves who became a self-taught artist and was the first African-American artist to be given his own show at the Museum of Modern Art in New York City. His art has been featured in the Smithsonian American Art Museum.

The Edgehill community has a long history of activism. The Rev. Bill Barnes who was an organizing force in the community pastured the Edgehill Methodist Church from 1966 until his retirement in 1996. He was liberal advocate for affordable housing and other issues affecting the Edgehill community.  The Edgehill community is accustomed to fighting city hall. A few years ago when the city entered into an agreement with Belmont University to share Rose Park with Belmont University in exchange for Belmont's investment in the park, the community unsuccessfully fought the deal. It did happen but it took a while and there were lots of protest and a lawsuit before Belmont won that battle. 

In the last year, the Edgehill community became a leading voice opposing the redevelopment of property that adjoins Fort Negley that was the former home of the Nashville Sounds' Greer Stadium. Fort Negley is near the Edgehill Community. Fort Negley was build by freed slaves forced into labor by the occupying Union army.  Many Blacks endured terrible hardship building the fort and many died. Many in the Black community found it offensive that this site of significance to African-Americans was to be redeveloped rather than incorporated into the Fort Negley Park. When Mayor Briley became mayor, the plan to redevelop the Greer stadium site was abandoned.

The point of the above discussion of the Edgehill community is to say that if the community wants to keep the city from selling off the  Edgehill Memorial Gardens Park, the community will fight. They will not just roll over and play dead. The community has already had at least one community meeting to organize for the purpose of saving the park (link). While I think Nashville does too many things, I like our park system. As Nashville grows, we need more green space not less.

In addition to the political activist of Edgehill, I am sure there are many people like me who will side with those who think selling off park property to balance the budget is not a good idea. I signed petitions and advocated saving Fort Negley and reincorporating the Greer site back into Fort Negley Park and I feel sure I will support saving Edgehill Memorial Gardens. Councilman Colby Sledge who represents the Edgehill area has already come out in opposition to selling off the park.

In stead of making the budget balance by counting one-time money from the sale of pubic lands when that sale looks very doubtful, the city should cut the budget. There is plenty of waste, corruption, and unnecessary spending to cut to make it balance. Also, using one-time money to balance the budget just sets us up for a certain tax increase next year. It is time to get serious about cutting expenses.

For additional source material for this story see the following links: here, here, here, here.

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Sunday, June 17, 2018

(Pt.2) What's on the Council agenda for 6-17: More regulations on dogs, hotels, scooters and metro hiring; the Donelson Transit-oriented Redevelopment Plan

By Rod Williams - The Metro Council will meet Tuesday, June 19, 2018 at 6:30 PM in the Council chamber at the Metro Courthouse. Here is a link to the Council agenda and the staff analysis for those who want to watch the Council meeting and follow along.  Below is a summary of what is on the agenda. The most important item is the annual operating budget and I have discussed that in a separate post at this link

Elections and Confirmation

There is an election to fill one vacancy on the Industrial Development Board. This Board controls a lot of money and hands out corporate welfare by giving sweetheart deals to favored companies. Another way of saying it is they incentivize companies to locate in Nashville by giving them preferential treatment. It develops property then leases it to businesses. Since the property remains the property of Metro Government and thus exempt from property taxes, companies awarded these deals do not have to pay property taxes but instead pay "payment in lieu of taxes" or PILOT, which is often much less than they would pay in taxes. Also, the IDB may do the same for developers of affordable housing. While the public knows little about how the board operates and doesn't care who sits on the board, some business interest lobby hard to see their favorite candidate sit on the board. The two candidates are Tequila Johnson and Quin E. Segall. I have no knowledge of either.

There are 13 mayoral appointments to Boards and Commission before the Council for confirmation. Usually, these are confirmed without controversy, discussion or dissension.  
There are three resolutions on Public Hearing all asking for an exemption from the minimum distance requirements for obtaining a beer permit.

Resolutions: There are 18 of them. Most are routine things like accepting grants and settling lawsuits out of court. Here are the ones of interest:
Resolution RS2018-1253  extends the extends the duration of the water and sewer extendable commercial paper program. I do not know if this is prudent or not and I have not watched the Budget and Finance Committee meeting where this may have been discussed, but it does raise a red flag. It appears to me that instead of paying debts when they become due we get extensions. In a household this would be a sign of a household in financial difficulty. Any insight as to the prudence of this action from a knowledgeable person would be welcome.

Resolution RS2018-1262  appropriates $3,500,000 from the undesignated fund balances of the MNPS General Purpose Fund to Metro Schools. 

Resolution RS2018-1263 is a resolution requesting the Tennessee General Assembly to introduce and enact legislation to allow for online publication, instead of newspaper publication, when public notices are required. This makes sense to me. Now, these public notices are published in publications that no one reads, that is just full of notices. 
Bills on Introduction and First Reading: There are 10 bills on first reading. Bills on First Reading are normally considered as a group and are seldom discussed. First reading is a formality that allows the bill to be considered. Unless a bill is ridiculously atrocious it should be passed on first reading. Bills are not assigned to committee or analyzed by council staff until after they have passed first reading. I have not carefully reviewed the bills on first reading, but will before second reading. There is one bill on First Reading that is very significant. Bill BL2018-1205  would save the fairgrounds by prohibiting the giveaway of the tea acres that is slated to be given to the developers of the planned soccer stadium. This is a good bill. I don't think anyone would try to kill it on first reading but they may.

Bills on Second Reading:  There are 27 bills on Second Reading. These are the ones of importance.
Bill BL2018-1189  would require Metro to make an even greater effort to make sure some Metro business goes to minority contractors when Metro has projects to put for bid. The staff analysis says Metro legal has expressed concern that the bill may contain unconstitutional race and gender based preferences and is inconsistent with the current framework of the Procurement Non-Discrimination Program.

Bill BL2018-1200 would require that if a  hotels or roominghouses accept cash payment, they must also accept at least one other form of payment such as check or credit cards. I seldom carry cash and would find it inconvenient if I tried to do business with an entity that was cash-only, but why not let the market work this out.  Why must the government try to micromanage every aspect of commerce and our lives?

Bill BL2018-1201  would tighten animal control regulations. Now, you are not supposed to leave your pooch out if the heat index will be above 95. This lowers it to 85. Why? Lots of people work outside with a heat index of 95. At one time dogs lived in unairconditioned houses with their masters. We did not always have air conditioning and animals survived. Animal Control says to enforce this will take more people, space, and equipment and cost $472,617. That is the way government grows. An extra $472,617 hear and an extra $472,617 there and pretty soon you are talking about real money and have to raise taxes. 


Bill BL2018-1202 are proposed new rules for scooter prompted by the arrival of
Bird Scooter here in Nashville. It would require new fees including a fee of $40 per scooter. If the Bird people say they can live with this, I would support it, but I think it is ridiculous that Metro tries to hinder or stop every new economic innovation. Bird Scooters are undocked and an app on you phone can find the closest one, you can activate it by use of your phone app, ride it to your destination and then leave it. This could contribute to Nashville's mobility and be another transit option, yet Metro is fighting this innovative service. 
Bills on Third Reading: There are  seven. One is the Metro annual operating budget which I have reported on in another post. Here are the other ones of interest.
Substitute BL2018-1139 (as amended)   approves the Donelson Transit-Oriented Redevelopment Plan. There is a new authority given to cities to plan, facilitate and guide develop around transit stops to encourage a certain kind of development around those stops and to give cities the authority to issue Tax Increment Financing bonds for improvements in the designated area. This would be the first time this authority has been used. This designation would apply to the Donelson stop on The Nashville Star line. This bill does a lot. There is a lot of detail in the staff analysis for those who want to know more. I have no problem with this concept but think it might go too far in trying to micro manage development.  Previous I had expressed a concern is that this might confer the power of eminent domain to MDHA for use in this area.  I have since spoken to the sponsor and have been assured this is not the case. With that assurance, while I still have reservations about the reach of this bill, on balance I think it is a beneficial bill. 
To read 20-page MDHA report on the plan, follow this link
Here is a link to The Nashville Business Journal report on this issue: What a development in Donelson means for Nashville's $5.4 billion mass-transit overhaul 
The Tennessean coverage: Donelson debates Nashville's first planned transit-oriented district.

Bill BL2018-1185  is the Metro tax levy, since the proposed Metro budget does not call for a tax increase, the tax levy would not change unless Councilman Mendes' bill passes which calls for a tax increase.
To watch the Council meeting, you can go to the courthouse and watch the meeting in person or you can watch the broadcast live at Metro Nashville Network's Government TV on Nashville's Comcast Channel 3 and AT&T's U-verse 99 and it is streamed live at the Metro Nashville Network's livestream site and you can watch it live on Roku. You can catch the meeting the next day (or the day after the next) on the Metro YouTube channel. If can stand the suspense and just wait, I will post the video on this blog the day after or the day after that and provide commentary.




 





 



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(Part 1) What's on the Council agenda for July 19th: Passing the annual operating budget

By Rod Williams - The Metro Council will meet Tuesday, June 19, 2018 at 6:30 PM in the Council chamber at the Metro Courthouse. Here is a copy of the Council agenda and the staff analysis for those who want to watch the Council meeting and follow along.  There are several important items on the agenda but by far the most important is the operating budget.

The Operating Budget, Bill BL2018-1184

This bill is on third and final reading.  Should the process of passing a budget get bogged down for some reason and not pass tonight, the Council would have to hold a special session between now and the end of the month.  If the Council does not pass a budget, the mayor's budget becomes law without council action.

The mayor's budget is what is initially before the Council. This is a $2.23 billion dollar budget. The current Fiscal Year 2018 budget is for  $2.21 billion. The mayor’s proposed budget for Fiscal Year 2019 represents an overall increase of $20.4 million. This year's budget does not call for a tax increase. The budget is said to be "short" $34 million due to $26 million less being generated in property tax revenues than anticipated, primarily due to large companies successfully challenging  their Metro tax appraisal, and $8 million less being received from the State to support Metro schools, as a result of declining enrollment.  For a more detailed explanation of what is in the budget see the staff analysis. To become an expert on the Metro budget, see Citizens' Guide to the Metro Budget.


Two areas most impacted by what s perceived to be a budget shortage is Metro Schools and a promised Metro employee Cost of Living pay increase.  The schools asked for $44.7 million additional in this years budget and the mayors budget only gives them $5 million additional. 

An area of concern to me is that the budget under funds the various reserve funds. This is not prudent money management and this action along any other bad economic news could impact Nashville's bond rating.

The process of approving the budget is that the mayor first holds budget "discussions" with department heads and their top staff who make a pitch for the funding they want.  The mayor and his staff estimate the city's anticipated revenue and the mayor's office then develops a budget which is presented to the Metro Council.  

The Budget and Finance Committee then holds earnings on the budget where each department head and their top assistants appear before the Committee and make the case for their budget.  If they feel the major cut their budget request too much, they appeal to the Council to increase their funding.  The Budget and Finance Committee then tweaks the mayors budget and shifts some money around and this product is then presented to the Council as the "substitute" budget. 

The substitute budget does not call for a tax increase either. The substitute budget tweaks the mayor's budget by cutting a little hear and there that total $2 million and gives that money to Metro Schools. Out of a $2.23 billion budget that is not much. Hardest hit in the substitute is the city's Music and Entertainment Economic Development initiative which lost $1 million. $300,000 was taken from the mayor's office budget smaller amounts from other departments. For The Tennessean's report on this story, follow this link

The substitute  maintains the cities commitment to the Barnes Fund for Affordable Housing but moves to fund it contingent upon revenue generated from the sale of two pieces of surplus properties. One of those surplus pieces of property is a park in the Edgehill area and this has already generated stiff opposition.

Once the motion to substitute is approved the budget is then often called "the Council's budget" as opposed to "the mayor's budget."  Once the motion to substitute is accepted then that is the bill before the Council which may be debated. Probably their will be no debate on the motion to substitute. Once the substitute motion is passed Councilman Bob Mendes is going to move to amend the substitute with a substitute which calls for a .50 cent tax hike. Not that it matters a lot but the parliamentary procedure could be that Mendes opposes the Budget and Finance Committee substitute and argues for his own proposal at that point. 

The Mendes fifty cent tax hike would generate about $150 million in new taxes. This would fund the schools request and the COLA pay increases. I adamantly oppose increasing taxes and instead think we should cut waste, corruption, inefficiency, corporate welfare and unnecessary spending. Expect some lively debate. Mendes has four cosponsors for his bill and the influential progressive organization NOAH has endorsed his plan and The Tennessean has endorsed a tax increase.

Despite the support for a tax increase from some council members and powerful allies, I suspect the Mendes amendment will fail. I have no inside knowledge but anticipate the Mendes proposal to get about ten votes.  After the failure of the Mendes amendment, Council will then be back to considering an up or down vote on the substitute budget.  

This is something that most citizens and I suspect even some members of the Council do not understand. A "no" vote on the Council substitute has the effect of being a "yes" vote for the mayor's budget due to that is the way the Charter designs it. If the Council substitute fails then the mayor;s budget is the budget. 



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Saturday, June 16, 2018

Should Nashville raise property taxes? Pro and con

by Rod Williams - My answer is a resounding emphatic "absolutely not."  Instead we should take a top to bottom, line item by line item examination of the budget and cut out waste, corruption, mismanagement and unnecessary spending.  Nashville does not have a revenue problem, we have a spending problem. I would close General Hospital which serves no purpose other than to boost the ego of the Black community.  I would ban police overtime except in a declared emergency and make sponsors of events pay for their own security, I would stop the outlandish over payment of fees to the managers of Metro's pension fund, I would tell the school board to slash overhead and to rapidly consolidate schools to reflect the reduced enrollment, and I would find out why it takes $6 million dollars to build 3 miles of sidewalk.  I would fire a bunch of department heads such as those who allow it to take $6 million to build three miles of sidewalks. I would discontinue corporate welfare. To avoid the crisis  that is on the horizon, I would change Metro's pension system from a guaranteed benefit to a guaranteed contribution system. More money to Metro will simply mean more waste, corruption, mismanagement and unnecessary spending. We need to starve the beast.

The Tennessean asked the question and the editor of The Tennessean,  David Plazas says "yes,"  while Justin Owen, president and CEO of the Beacon Center of Tennessee says, "No."  (link)

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Friday, June 15, 2018

Council "substitute budget" shifts $2 milliion from elsewhere to give to the schools.

The Metro Council's Budget and Finance Committee has completed its work on the mayor's budget and developed a substitute budget which, as expected, does not call for a tax increase. The substitute budget tweaks the mayor's budget by cutting a little hear and there that total $2 million and give that money to Metro Schools. Out of a $2.23 billion budget that is not much. Hardest hit was the city's Music and Entertainment Economic Development initiative which lost $1 million.$300,000 was taken from the mayor's office budget smaller amounts from other departments.  The $2 million additional funding for the schools is still much less than what schools asked for and there is no funding in the budge for Metro employees cost of living increase. For The Tennessean's report on this story, follow this link.


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We should not be like Stockton California and we get the government we deserve

Jeff Hartline
If you do not subscribe to The Tennesseean you missed two good opinion pieces in last Sunday's newspaper from local conservative luminaries.

 Jeff Harline writes, Nashville is stuck with the government it deserves. He identifies four categories of voters from the engaged to the most apathetic and says that in the recent referendum on the transit proposal and mayoral race apathy was on full display, "when voters overwhelmingly defeated the tax increase, but voted for the major candidate who pushed the tax increase."  I share Jeff's opinion. I am constantly amassed how little people seem to care about local issues and how little they pay attention.


Unfortunately, The Tennesseean did not save this article online (which I find hard to believe) or they have such a  poor search engine (which they do) that I can't find it. Harline is a former Republican candidate for the District 5 congressional seat, is a political activist and publishes the online Tennessee Spotlight.

Carol Swain
Carol Swain, recent candidate for mayor, former Vanderbilt professor, author, activist and TV commentator writes, Why Nashville should not be like Stockton, California.  She writes, "Stockton, California and Nashville are mid-sized cities run by liberal Democrats. Local leaders in each city have championed high-dollar projects that ultimately work against the public interest. As a result of this extravagant spending, both cities have found themselves in fragile financial positions. Music City would be wise not to follow in the footsteps of Stockton, which declared bankruptcy in 2012." 

I share her concern that we are headed down that path.


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Thursday, June 14, 2018

A sweet moment with Sue and Louella

by Rod Williams - I experienced the sweetest thing yesterday and wanted to share it with readers of

Sue Deuss and Louella Ballenger
this blog.  Those of you who know me, know of my situation with my wife Louella. Louella has brain damage and is "total care." She has to be fed, bathed, changed -everything. She is in a wheelchair and she cannot talk. She has been sick since about 2001 but she gradually declined and has been in her current state about four years.

We have a wonderful caregiver, named Sue, who has taken care of Louella for the past nine years. Sue took a vacation and was gone about two and half weeks, returning to work yesterday.
Luckily I had a good caregiver from an agency take care of Louella in Sue's absence. That is not always the case. So, I was fortunate this time. Also, I have found another good person who helped out on weekends and some other times when we did not have the agency. So, I had a good team to take care of Louella while Sue was gone.

With Louella's condition it is hard to know how much Louella knows. I wondered if she missed Sue. With her advanced brain damage I wondered if Louella would forget her or if Louella even knows one person from the other or if she even realized Sue was not there. On Wednesday, Sue returned to work. When Sue was getting Louella up, Louella's face just lit up when she realized it was Sue. Then sitting on the edge of the bed Louella leaned over and kissed Sue, Then, did it two more times. And "spoke" in cooing tones with soft inflection. Then she leaned her head on Sue's chest and let Sue stoke her for some times.

It was so sweet to see Louella express her love for Sue. Louella's mind might be gone, but there is still a person there with feeling and a capacity for love. It was a blessing.

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Growing Debt Blamed for Budget Shortfall

by Ben Hall, News Channel 5 - Nashville is booming, so why is there a budget shortfall? It is the

Councilman John Cooper
main question Metro Council members are getting asked as they prepare to pass a budget by the end of this month. Total revenue is up, but Metro can't fully fund schools or provide promised pay raises, leading some to say we need a property tax increase. 

Councilman-at-large John Cooper ..."the short answer is the biggest place where that went is increased debt service - that we really borrowed a lot of money,"(link)

Rod Williams Comments: Please click the link to see the video and read the rest of the story. I would have posted the video buyI hate videos that start automatically so I did not post it.

Cooper explains that while we have a lot of revenue flowing into the city a lot of it goes to pay debt. Most of the money from the hotel-motel tax goes to pay for the convention center and property taxes from several new buildings in the Gulch help pay for the Sounds Stadium.

In addition to debt which is a major culprit in metro's immediate shortfall, Metro just waste too much money. Little is being done about the abuse of the police overtime. Instead of event sponsors paying the security for numerous  events from festivals to 5K runs, the city pays for it and police rack up big overtime. This not only cost us now but for many years to come. A metro employee's retirement income is calculated on a formula that includes his income earnings in the year he earned the most income, so policemen try to rack up as much overtime as possible in the year before they retire. Another big waste is Metro's sidewalk program which spends millions on studies and consultants and replacing perfectly serviceable sidewalks but building almost no new sidewalks. Also we refuse to get out of the hospital business and funnel more and more money into the failing Metro General Hospital when it should be closed.  Also we are getting ripped off by paying exorbitant fees for management of our pension fund. We need a top to bottom line item review of every dime spend and cut out the unnecessary, the wasteful, and the misspend spending.

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Wednesday, June 13, 2018

Nashville General Hospital pays former councilman $150k.

The Tennessean - A newly resigned Nashville General Hospital Authority board member is blasting the cash-strapped institution for paying a consultant more than $150,000 through a contract she says "was kept hidden" at the height of the hospital's financial crisis.  ....money spent on the services of former Nashville councilman Jerry Maynard ... in addition to more than $200,000 paid to the city's largest public relations firm. ... former board member Dr. Michelle Williams condemned the hospital's arrangement with Maynard.(link)

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Family Action Council's legislative scorecard. Find Out How Your Legislators Voted

The Family Action Council is an organization that advocates for social conservative issues. The scorecard they produce is very detailed and provided a summary of each bill they use to score legislators. To view the complete  scorecard follow this link.

Among Nashville legislators, Representative Bill Beck scored a 11%; Gilmore earned a score of 1%; Beth Harwell, 100%; Harold Love, 13%; Darren Jernigan, 13%; and Mike Steward, 10%. 

Senator Dickerson scored 14%; and Jeff Yarbro scored a zero, and Thelma Harper scored a 42%.

If you are unsure who is your state rep or senator, follow this link for an interactive map


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