Thursday, September 13

Ya Gotta Love Forced Reasoning or Why The County Mayor Didn't Respond To City Offer

In The Courier this week Mayor Davis attempted to answer the question, Why Didn't the County Respond to the City Offer about the One-Cent Sales Tax?
Let me see if I have this right.
Background

In January the City Manager, in a letter in his official capacity on city letterhead, Welch offered to give the county for school construction one-third of the city’s share of the one-cent sales tax increase for a decade.

The county never did respond, although the city invited a response several times. Mayor Davis told the Courier he did not formally respond, (whatever formally means), because he "did not think it was their best offer."

The Mayor then went on to say that because the letter came from the city manager without an official endorsement, (whatever official endorsement means), by the city commission, "to me, it wasn’t a legitimate offer."

Although Mayor Davis says he believes the city is on firm legal footing in deciding to keep their half of the one-cent sales tax for the municipality’s own use , ‘that’s not the way [he] understood it when [he] voted as a citizen’ and went on to say ‘what was being said back then is not being met today.’

City Mayor Shutt points out that the city never did get an answer, they couldn’t get anyone to talk to them and they asked more than once.
Conclusions

Mayor Davis has no concept of negotiating. It appears as if his version is, you just keep making offers to me until I think your offer is the best your going to make. Well, Duh!!

Mayor Davis not only did not ‘formally’ respond, in fact, he didn’t respond at all.

Mayor Davis insults the City of Savannah and the City Manager when he questions the legitimize of the written offer on City letterhead.

Mayor Davis cost the county $300,000.00 in free money, this fiscal year, and at least $3,000,000.00 over the next 10 years, by not having the skill set to pick up the phone and say, ok, let’s see what it look like in writing or can we get together and talk about it.

The bottom line is - To follow the logic of Mayor Davis, he didn’t think it was ‘their’ best offer and didn’t think ‘they’ made it.
Respectfully submitted for your consideration.
Ted

City, County and the One-Cent Sales Tax- Readers Write - Courier 9/13

Although I have written about the issue several times over the last few years, I can’t pass up the opportunity to comment on the story in last week’s Courier about the City of Savannah, Hardin County government, the Board of Education and the one-cent sales tax issue.

I think The Courier framed the question just about right.

Should the citizens of Savannah pay more than required by state law to cover the county’s obligation and responsibility to fund our public education infrastructure? The unasked question is, how are we supposed to pay for our county buildings, including our public education infrastructure?

Remember that the citizens of Savannah, in addition to paying a city property tax, pay their part of the county property taxes, the primary funding source for our county government, just like the other citizens of Hardin County.

There is misconception in the article that the city "agreed to give up half of Savannah’s share of the increase to the county to pay for the high school project." The fact is that Savannah agreed to give up all of their share of the one-cent increase to pay for the high school project.

By law, half of all local option sales taxes collected must go to fund public education operations. The municipality where the sales taxes are generated gets the other half. The county general fund gets half of the sales taxes generated in the unincorporated areas of the county.

Mayor Davis, in his written statement, like many others, rhetorically states that "I believe we must provide for our children’s education today and tomorrow."
It is one thing to "believe," but it is a totally different thing when you compare those beliefs with past actions.

The Mayor’s belief that "this issue was resolved 10 years ago" would depend on which of the three different scenarios that were put forth at that time by the then County Executive, the Board of Education and the then county commission, to get the voters’ support for the referendum.

Consider that the tax increase was approved by the voters 10 years ago is based on a county commission-approved resolution for the one-cent increase that clearly states that it was necessary "in order to raise additional funds . . . and to minimize or reduce the necessary increase in the property tax rate . . ."

It is one thing to minimize or reduce a necessary increase in the property tax rate, but it is another matter to make it a holy grail and take it completely off the table for two decades.

Instead, the attempt is made to put us on a guilt trip about not supporting the education of our children and ask the citizens of Savannah to waive their statutory right to their half of the one-cent sales tax increase to cover about half of the long term debt service for the construction and repair of schools for Hardin County.

Since 1989, until this fiscal year, our county government and the Hardin County Board of Education have refused to consider or request raising additional funds for the repairs and maintenance of our existing schools for Hardin County.

Instead, these officials have allowed our existing school buildings, to the detriment of our children’s education––past, present and future––to deteriorate. The decay has reached the point they need either complete replacement or major upgrading. Hardly a good sign of providing for our children’s education.

And then one should consider that we have some of the lowest paid teachers, bus drivers and staff in the State of Tennessee. It seems our elected officials "believe" we must provide for our children’s education, but not if we have to pay for it with property taxes.

One of the more interesting facts that was not in the article is that the county has been on notice for about the last year that this issue needed to be addressed and that city officials would be available to sit down and discuss it, but for whatever reason, or excuse, the County Mayor was never available to even set down and discuss the issue with city officials.

But then again, the County Mayor, as one of his first official functions as Mayor, didn’t find it necessary to discuss the unilateral refinancing of the bond issue back in late 2002 with the City officials, even though they were contractually obligated to underwrite about half of the debt. It’s almost like the county’s attitude was, it’s our debt and we can do whatever we want to.

For whatever reason the county sacrificed the ability to pay off the debt early with excess collections and earned interest over debt service requirements, without penalty, for a little lower interest rate but with a prepayment restriction.

It’s both disappointing and enlightening to look at the way the proceeds of the one-cent sales tax have been administered over the last decade by the county and the Board of Education.

Recall that the rhetoric at the time was that all proceeds generated by the one-cent sales tax increase would go for the construction and repairs of schools for Hardin County. Well, a review of the county and city archives reveals it didn’t happen that way.

As noted in The Courier article, for the first five years, the county diverted the interest earned on the accumulation of excess funds to the General Fund instead of the school construction debt service account. When asked for an accounting by the city, back in 2003, the county made the argument that it would be too much work to do the accounting because the county Trustee’s records were not computerized and the records were in the basement of the courthouse.

Instead they would just start putting the earned interest in the debt service account starting in 2003 and forget about the first five years. To date there has never been an accounting of the first five years of interest earned on the idle funds, that at times amounted to millions of dollars.

The other incorporated municipalities chose not to contribute to the construction program and the funds that were generated for education went for school operating expenses instead of the debt service fund. These cities kept 50 percent of the proceeds from the one cent for themselves.

Among other things, the county General fund also ended up with the trustee’s commission for handling the proceeds of the one-cent sales tax increase.

These actions clearly establish that all proceeds of the voter approved tax increase referendum did not go to construction and repair of schools for Hardin County and cloud the claim that education is a true priority.

We need to see actions, not rhetoric. We need our governments to be honest with the people.

I would say again it is not a responsibility of the citizens of the City of Savannah to cover the county’s legal obligation to fund and maintain school facilities and buildings for all our children’s education. City residents pay county property taxes too.


Respectfully submitted for your consideration

Ted