Clay County shutdown looms

Published in print August 12, 2015

Not just for schools; entire county
in jeopardy if budget is not passed

CELINA-No headway was made last week in the budget standoff between county commissioners and school board members leaving not just the school system heading for an imminent shutdown, but also the entire county, according to Clay County mayor Dale Reagan.
“I want everybody to understand the situation we are faced with,” Reagan said to a good crowd gathered here at last week’s August county commission meeting after the local governing body continued the stalemate by unanimously voting to request the school board ‘to submit a budget with the same property tax rate as last year’ at next Monday’s budget committee meeting. “This is going to affect the whole county, all departments, everything… not just the schools.
“If we don’t get approval (for a continuing budget extension through September 30), we will have no authority to pay bills after August 31.”

The deadline
The mayor’s comments followed an explanation of the process required by a new state law that went into effect this year regarding guidance for county continuation budgets and extensions (public chapter 170, Acts of 2015).
The law requires the county commission to adopt a final operating budget for each fiscal year “no later than August 31,” unless “extraordinary circumstances” exist and a request for approval of a continuation budget extension has been submitted by August 15 and approved “within seven days after the receipt of the request and any supplemental documentation” by the Office of State and Local Finance (OSLF).
“That’s where we’re at,” he said after explaining the steps required by the state.
Reagan said his office had submitted a timely request prior to the August 3 meeting, but explained he had “yet to get official word on the extension” and said he “didn’t know if (the county would) get the extension,” at the time of his statement.
As of HORIZON press time Monday, Regan said he still hadn’t received confirmation the county would be granted the extension.
“No,” he said when asked, “and to be honest with you, I’m not expecting it.
“We’ve been discussing the issue with the comptroller’s office for the last week and a half to see what we can do and what can be done to reach some sort of a compromise, but so far they don’t consider our situation as an extraordinary circumstance in order to get the extension.
“The comptroller said it was the duty of the school board and the county commission to adopt a budget,” he continued. “We are doing everything we can here at my office to try to help them work this thing out.
“When you take positions like this, it’s your duty… I feel like we will get this done. We’ve got to. There’s got to be a compromise somewhere. Where I don’t know, but we will get there.
“I’m a firm believer God is in control and things happen for a reason. We’ll get this worked out, but it boils down to the commission and the school board. They are the final decision makers.”

The timetable
The school board is set to meet this Thursday (August 13) to consider the commission’s request to present a budget to them at the budget meeting the following Monday.
Reagan explained, even if the budget committee accepts a school budget at their meeting next Monday (August 17), the timing would be close.
“We will have to publish the proposed budget and it can’t be acted on until 10 days after the publication,” he said. “Then we will have to call a special meeting to get it passed before the end of the month.
“So it will be pushing it to get it done before the deadline.”

Then what?
When asked what will happen if the deadline isn’t met, Reagan had no definite answers.
“That’s what I want to find out,” he said Monday. “The statue says the county will have no legal authority to spend for operations, including it’s school system, but it don’t think they’re saying we have to close down the county completely.
“There is no doubt this is serious… that’s what I want to know. What are the consequences? What are the repercussions if this happens?”
Reagan said he hoped his questions would be answered the following day when he and his staff, along with director of schools Jerry Strong and his staff, take part in a conference call with the state comptroller’s office and others.
The mayor also explained the mystery of what may come to pass exists because Clay County’s situation is the first since the new law passed.
“The law just came out so we really don’t know what’s going to happen,” he said. “This is an unprecedented situation right now.”

Along with the documentation outlining guidance for county continuation budgets and extensions Reagan spoke of at last week’s meeting, came possible action which could be taken if a budget is not adopted on time.
The information said if an “unbalanced budget or one with insufficient monies appropriated for the payment of debt service” is adopted, “the comptroller may direct that the appropriation resolution be amended to reduce expenditures or that the tax levy resolution be amended to increase the property tax levy.”
“For them to come in is the last alternative,” Reagan said regarding intervention from the state level. “We are going to do everything we possibly can to avoid that.”
The documentation further added to what Reagan announced at the meeting regarding all county departments being affected.
“If (the commission) does not adopt a budget in a timely manner, a county will not have spending authority after the continuation budget deadline of August 31 or after the continuation budget deadline of September 30 (if an extension is granted),” the information said.
It continued by explaining the commission “needs to adopt a budget in a timely manner so that its school system may be able to report a complete and certified school budget to the TDE (Tennessee Department of Education) by the final reporting deadline of October 1st in order to maintain its eligibility to receive state school funds.”

The pending county and school system shutdown stems from repeated county commission rejections of school board requests for additional funding to counteract the cost of federal spending mandates associated with the Affordable Care Act.
Despite prior approval of all other departments, the budget committee has yet to accept a budget from the school board leaving the county operating on a continuing budget—where they can spend no more than the amount spent in the same month of the prior fiscal year.
Under normal circumstances, a budget is supposed to be adopted by June 30 for the July 1 beginning of the fiscal year.
The school board first requested a wheel tax increase of $45, then a 30-cent property tax increase, and finally a 20-cent property tax increase—all of which were rejected in previous budget meetings.
After the final rejection early last month, the school board responded with the approval of a reduction in (work)force and a vote to set October 9 as the last day of school explaining schools shall remain closed until an approved budget is received from the commission.
The only other action regarding the dilemma came at last week’s commission meeting when the school board was asked to present a budget at the next budget meeting and a county property tax levy identical to last year’s was approved.
See a future HORIZON for more on this story, including news from this week’s school board meeting and more.