December 23, 2005 Merry Christmas To All

Merry Christmas to everyone!

I have not posted to my blog as regularly during December as I would have liked. After several family illnesses in November, everything is just now getting back to normal. I again thank all who have called with words of encouragement and all those who lifted our family in prayer.

This will be my last post until after Christmas, and it will touch on some of the highlights of the regular December meeting of the Hamblen County Commission.

If you received the local newspaper on Wednesday, December 21, you may have noticed something new. On Page A-3 of the paper, there was a list of Hamblen County Commission agenda items. At the December 12th committee meetings, I asked that we have the County Mayor request that the local newspaper publish the Commission agenda each month.

I received a telephone call the next day from Tribune reporter Stan Johnson to let me know that he thought it was a good suggestion and that the Mayor had discussed this with the paper soon after the committee meeting and that it was a "go."

I certainly want to thank the Tribune for agreeing to publish the agenda, and I also want to thank Stan Johnson, who was present at the committee meeting where I introduced the proposal, for his support as well.

Letting people know what is going to be considered at public meetings of the county commission is another indication of openness and a desire to encourage public participation. Openness and public participation are vital to the proper functioning of government at all levels in the United States.

At the beginning of our meeting, two groups of local athletes were honored. The Morristown West High girls cross-country team was recognized for its first place finish in the state. This team has consistently performed well through the years and finished 2005 with a 192-7 record and the AAA state championship. Raymond Farmer and Jan Haney are the girls cross-country coaches. Also honored were students who are members of the local trap shoot club. Several student members of this trap shooting team took individual and group honors at the state level.

In addition, Dr. Cleland Blake, who has served as the county's pathologist, was recognized at the beginning of the meeting for his many years of service to the county.

In the business portion of the meeting, the FINANCE COMMITTEE REPORT was first.

1. The report of checks paid by the Office of the Hamblen County Mayor were approved.

2. A meeting to consider a local Private Act to determine possible uses of the Hospital Debt Fund excess interest monies will be scheduled sometime prior to the regular January 9th committee meetings.

3. A bid was awarded for Entrance Signs to Hamblen County. A grant for these signs was secured about 6-7 years ago. It has apparently taken many years to work out right-of-way problems. No money was requested from commission during the 05-06 budget process for the county grant match of about $10,000, so the problem yesterday was where do you get the matching money now that you have a bid and are ready to get started.

Finance Director Nicole Epps said that the county's employee benefits (insurance) budget was probably going to be under budget and that the $10,000 match could come from a line item there. Sounds easy enough--until you realize that while that one line item may be under, several other line items in the county budget will be over (Finance Director Epps admitted that the medical line item in the jail budget is one item that will be overbudget.) Sounds easy enough until you realize that the county already has a deficit budget and plans to pay its bills by spending all of its current revenues plus taking money out of its fund balance (savings).

The proposed signs are very attractive. I support using the grant money and providing the local match for them, but I voted "no" on taking the matching money out of a line item in the general fund that is under budget when we know that other line items are over and when we know that the general government budget as a whole is in the red. There are other sources for this matching money--one of which is the Hospital Debt Fund which was used for matching grant money for Sheriff Otto Purkey earlier in 2005.

4. The request from M-H Library Board Chair Bill Brittain to provide extra money for the search for a new director failed for lack of a second. County Trustee Bill Brittain, as library board chairman, had asked for $2,500 from the county. The Finance Committee in a 5-3 vote on December 12th had recommended funding $1,000 if money was available in the county's advertising budget. Finance Director Epps reported on December 22nd that the county's advertising budget did not have any money to spare, so no action was taken on the request.

5. Commissioner Harville reported that the Finance Committee had taken no action on the proposal to open up the process in the way the county awards professional services contracts for architectural and engineering work. I mentioned that I would bring this item up again in January because allowing several firms to submit proposals and then choosing the best overall proposal will result in savings to the county and to county taxpayers. Although you can do what the county has been doing and just pick somebody without asking for other proposals and without considering other firms, it is hard to understand why the county doesn't open things up and consider proposals from several firms. There are many firms that can provide these services. The current process, however, is to pick someone and sign a contract with them without considering other firms.

6. A budget amendment to the Hamblen County Schools budget passed to provide for the spending of well over $1,000,000 more money on schools. About $600,000 of the new spending is money that is being pulled out of the school system's fund balance. That makes a total of about $1.4 million of its fund balance that the school system is using this year. Despite new local money and additional state money, the Hamblen County school system has a deficit spending plan for 05-06. Just as I am concerned about the county's 05-06 deficit budget, I am concerned about the school system's deficit budget. The saving grace in this is that most of the $1.4 million that the school system is pulling from its fund balance is geared to one-time expenditures that should not affect the next year's school operating budget. I voted in support of the amendment, but I expressed my concern on the record about pulling more and more from fund balance.

CONSTRUCTION OVERSIGHT COMMITTEE REPORT

1. The Construction Oversight Committee reviewed a written "Facility's Program" report provided by the architect for the 2nd floor jail renovation. The Committee recommended that the architect proceed as per the "Facility Program" outline. This involves the "build-out" of the 2nd floor shell in the previously completed (2004) Justice Center Addition. After Mayor Purkey and Commissioner Nancy Phillips discussed at length the issue of stairs and their location in the facility, I asked that the recommendation to proceed include a provision that the architect submit schematic drawings to the committee so the stairs issue can be discussed and resolved before the architect starts on his drawings. [Although there is an elevator in the plans, obviously a fire or power outage or other problem could render it useless in the event of an emergency. Commissioner Phillips has apparently had several jail employees express a concern about this. ] Fortunately, the commission agreed to include the provision that the architect provide schematics to the committee/commission and that we try and get this resolved before final plans are drawn and the project is put out to bid.

PUBLIC SERVICES COMMITTEE

1. Discussion of a downward revision of the fees charged by the Planning Commission for mobile home permits was put off until additional information can be obtained and further discussion can take place between the Planning Commission and the Hamblen County Commission. Under the old fee schedule, the cost of a single-wide mobile home permit averaged $72.00; a double-wide, $219.00. Under the new schedule which is based on square footage, a single-wide averages $199.00; a double-wide, $358.00.

2. The Commission approved the appointment of two judicial commissioners for General Sessions Court. Each judicial commissioner will be a current employee who will receive $300/month in additional pay out of the current budgets of General Sessions Court and Circuit Court for assuming additional duties.

3. The Commission voted unanimously to have County Mayor David Purkey send a letter to the City of Morristown with a copy to the EPA expressing concern about the sewer odor in Witt and Roe Junction communities and requesting a reply as to what action will be taken. [The committee recommended this on Dec. 12th. The City had an article about this in the paper shortly afterward.]

4. The county's seldom used chipper/shredder will be put out for sale. It doesn't work well with wet wood, and there apparently isn't enough manpower to operate it. I asked that it be put on several surplus property sites, being sure to put it on the state of Tennessee's huge surplus property listing to try and maximize the number of people who see and bid on this item.

5. The Commission approved the purchase of lifters for a garbage truck in order to add an additional truck to current garbage routes and speed up the pick-up process. Road Superintendent Barry Poole said that the money to purchase the lifters could be found in the current garbage budget.

6. The handling of visitor's comments at commission meetings is to be continued at the January meeting of the Public Services Committee. This is a very important issue.

7. Appointment of Jail Inspectors will be considered at the January meeting of the Public Services Committee. I introduced this item at the December committee meeting, so it can be reviewed and a full discussion can take place in January. With the many Jail problems we have had over the past several years, it seems wise to appoint three individuals to act as jail inspectors as allowed by state law.

These individuals could be appointed in January, and among their duties would be inspecting the jail monthly and providing a report to county commission monthly. It seems appropriate to try to handle our jail issues locally and to keep informed on a monthly basis instead of having state inspectors come in and tell us that our jail is de-certified. I hope that a reasoned discussion of this can take place in January although I expect opposition to this very modest proposal from some who will say that commission should just provide money and stay out of the way. I will discuss this more in future posts.

8. As I mentioned earlier, the Tribune was asked and has already agreed to publish commission agendas as a public service before each meeting. Even though it's already taken care of, we voted on this proposal that I brought up in Committee on Dec. 12th just to make it an official part of the minutes and to express our thanks to the Tribune for their co-operation in this.

SEMI-ANNUAL REPORT FORM THE COUNTY MAYOR

During open discussion at the end of the meeting, I asked that the County Mayor, who is required by state law to provide a semi-annual report to the commission, include in that report in January an updated statement and analysis of our revenue and expenditures for the current budget year. I would like to see updated revenue projections (that would indicate whether the county revenue is likely to be within, over, or under the originally budgeted amounts) and updated expenditure projections (that would indicate whether county expenditures are likely to be within, over, or under the originally budgeted amounts).

The purpose in requesting this is to get a picture of where we actually stand at the half-way point of the current fiscal year in connection with revenue and spending.

Surprisingly, or maybe not so surprisingly, the County Mayor did not like this request.

What the Mayor has provided in the past as his semi-annual report (6-month) is the same type of report we already get each month...a report that shows the amount budgeted, the amount spent at that point, and the amount remaining.

The raw data is helpful but could be misleading without additional financial information. As an example, the raw data that we get might show at the 6-month point that the county budgeted $100,000 for liability insurance, spent $70,000, and has $30,000 remaining in "avilable funds" for the last 6 months. If you just looked at those raw figures, you might think there is a serious problem with $70,000 spent in the first 6 months and only $30,000 left in the liability insurance budget for the last 6 months.

Only someone who has actually seen the invoices and has been paying the bills (County Mayor or Finance Director) could tell you if it's really a problem or if everything is actually O-K because that's just the way the insurance premium is scheduled to be paid--- 70% of the costs are billed and paid in the first 6 months of the policy term and 30% of the costs are billed and paid in the last half of the policy term.

Those who write the checks and see the invoices know and can report more than the simple fact that a check has been written. There's a lot more to being the county's chief financial officer (County Mayor) and being the Finance Director than just writing checks. These positions involve thoughtful analysis and review of the county's financial position throughout the year and checking with the trustee to see what the revenue picture is, too.

The above example should how you might think there was a problem when there actually was none. The opposite could occur as well. Let me put this on a family budget level. Let's say that you budgeted $1000 for car insurance for a year. After six months, you show your wife or husband that you have paid out $500 for car insurance so far. He or she thinks everything is fine. [What you don't tell your husband or wife is that you just got a renewal premium in the mail and that the cost for the last 6 months of your budget year is going to be $700.]

Going on the raw data that shows you spent $500 in 6 months and thinking that the next 6 months will be the same--another $500-- your wife or husband thinks that you are within your $1,000 insurance budget.

But you and only you (the one who receives the premium, talks to the agent, and writes the checks) know that there is a problem and that this budget item will be $200 overbudget at the end of the year.

That's all I would like the County Mayor and Finance Director to do. Give county commission and the taxpayers a "complete statement of the financial condition of the county" based on what the Mayor and Finance Director know about expenditures and invoices and based on what budget information they request from other department heads about the expenses remaining in various budgets.

The county was presented with and passed an initial budget for fiscal 05-06 in which the county expects to spend about $450,000 more than it takes in--we're starting with a deficit budget where the county makes up the $450,000 revenue shortfall/excess spending by pulling money out of its savings or fund balance.

Since we know we are starting out with a plan (budget) to spend more than we take in, all elected officials and department heads need to be watching revenue and expenditures closely. Halfway into the budget year, there should be a report from the county's chief financial officer that pulls all the financial information together and provides a "complete statement of the financial condition of the county."

Six months into the fiscal year, county commission should be asking those who are most closely involved in compiling and presenting the county budget, those who are directly involved in reviewing invoices and paying bills, and those who collect and deposit all county revenues whether their opinion and analysis is that we are still on target to collect the total amount of revenue originally projected (or whether more or less is likely to come in) and whether we are still on target to be within the total amount of expenditures originally projected (or whether more or less is likely to be spent).

REVENUE: The best scenario would be that we now expect to collect more revenue than was shown in the original budget projections.
EXPENDITURES: The best scenario would be that we now expect to spend less than was shown in the original budget projections.

But we won't know where we the county stands financially until there is a semi-annual report that provides new and updated revenue and expenditure information or projections.

And that's what I asked for at the end of the December meeting---an updated review of our remaining revenues and expenditures. In our current monthly expenditure reports, we are given information in several financial columns. One column is original budget amount, then comes a column for amount spent to date, and the last column is labeled "available funds" left in that spending line item.

Families review their budgets periodically to see if they are going to have enough money to meet all their remaining expenses. Halfway through the year, the County Mayor and his Finance Department should be checking the status of the county budget and letting commission know if the "available funds" that are shown in each line item of our financial reports are really expected to cover the remaining expenses that are projected for that line item--and if the total of all "available funds" will cover all remaining expenses.

You could have a line-item that shows "available funds" in the amount of $5,000. But what if you project that there is still $10,000 that is going to be billed in that line-item? You could find that the total of all "available funds" might be $4,000,000 at the 6-month point. But what if you are projecting that there is still $4,800,000 that is going to be spent to cover all remaining expenses?

If there is a problem area in the budget, you need a heads-up and early warning in order to take corrective action. That's why periodic financial reports are important, and that's why semi-annual report and periodic quarterly reports are important and should include a footnote to the column that says "available funds."

The column that shows "available funds" just provides raw financial data. The missing piece is an updated financial analysis and report from the County Mayor and his Finance Director that tells county commission that the "available funds" in the Mayor's report will likely cover the spending projected for the remainder of the budget period. There is a major difference, for example, in being told that you have $400,000 in "available funds" and that this amount will likely cover all remaining projected expenses for the year and being told that you have $400,000 in "available funds" but that this amount will likely not cover all remaining projected expenses for the year.

If there are complaints by our chief financial officer or others that reviewing our financial position periodically and including an updated financial analysis in quarterly or semi-annual financial reports is more work, then so be it.

Providing raw financial data and doing periodic financial reviews and updates are just part of being the county's chief financial officer and should include a statement about whether "available funds" are adequate to cover projected remaining expenses.

County Commission should request a more complete and updated financial review of county revenues and expenditures starting with the January 2005 semi-annual report (7/1/05-12/31/05). The current reports already provide the raw financial numbers on revenues and expenditures. The only extra bit of information that is needed at this time is a statement from the County Mayor, Finance Director, and Trustee that they have examined county revenue and expenditures, that they have examined the "available funds" as shown in these reports and that, in their opinion, the available funds likely are or are not sufficient to cover the projected remaining expenses.

Although that sounds rather simple, one has to realize that the County Mayor, Finance Director, and Trustee can continue to provide just raw data and numbers and they can refuse to provide any financial analysis. If they choose to do that and refuse to provide an opinion about the county's complete financial situation, then the responsibility for refusing to provide that information on a quarterly or semi-annual basis and to be accountable for their own data lies with them.

County Commission can do its part by asking for the information. County Commission and individual commissioners who are trying to be accountable to the taxpayers should not refuse to ask for this needed information and financial analysis simply because they are afraid that someone will be upset or doesn't want to provide it.

When you've already got a deficit budget, you have a heightened duty to insist on updated reports and financial analyses from the county's financial officers. We may need to put the brakes on non-vital spending right now to avoid a deeper deficit at the end of the year, or the reports may turn out to be reassuring. Perhaps our revenue projections will be greater than was originally budgeted and we won't even end up with a deficit at year end!

Only one thing is certain---we'll never know what to do and we'll never know where we really stand financially if we don't take the first step as a commission or as individual commissioners and ask for an updated financial analysis in January of the raw revenue and expenditure reports that we will be getting then.

The financial analysis should state (1) REVENUE: whether we are on target to likely meet, exceed, or fall short of the original budgeted revenue amounts, (2) EXPENDITURES: whether we are on target to likely meet, spend more, or spend less than originally budgeted, and (3) putting the new, updated revenue and expenditure information together, the report should be able to state whether the "available funds" in the county budget are likely to be sufficient to meet all county expenses for the rest of the year.

Merry Christmas!