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BOC last night: Split votes, tax rate recommended, School Board member asks about Mayor’s charges

At the BOC (Board of Commissioners) meeting last night (5.9.19), a majority of three votes approved two ordinances and two resolutions:  the first reading of the new budget; a word change for BOC agendas; a housekeeping matter on a previous resolution; and an agreement for financial advisory services.

Lakeland School Board (LSB) member Geoff Hicks, after first being denied an opportunity to address the BOC by Mayor Mike Cunningham, was given a chance to come before the group and ask about Mayor Cunningham’s request for an investigation into financial anomalies of the City and School System and a forensic audit.

Vice Mayor Josh Roman recommended a tax rate of $1.89 (from the current $1.25) and requested the second reading for the Fiscal Year (FY) 2019-20 budget be May 21st.

Link to agenda: https://tn-lakeland.civicplus.com/ArchiveCenter/ViewFile/Item/842

Link to Livestream: https://livestream.com/lakeland/events/8676200


The ordinance and first reading of the annual budget and tax rate for FY 2019-20 was approved by three yes votes, with Mayor Cunningham voting no and Commissioner Richard Gonzales Jr. abstaining.

For the ordinance and final reading to change a word in the BOC agenda (discussion to comment), the vote was three yes votes, and Mayor Cunningham and Commissioner Gonzales abstained.

A resolution to amend a resolution dealing with due diligence on a proposed CON (Capital Outlay Note) to fund a high school was also approved on a 3-2 vote. Commissioner Gonzales moved to amend the amended resolution by removing the word “inadvertently.”  That motion failed and the original amended resolution was approved.

Another 3-2 vote approved a resolution to allow the Mayor to execute an agreement with PFM (Public Financial Management) for financial advisory services.

Attendees at BOC meeting

Public comments

Two citizens asked to speak to the BOC.  Karen Parsley spoke against the tax increase and asked BOC members to reconsider using a CON as a funding mechanism.

The Mayor said the second card was pulled to address the financial anomalies.  He said no comment. “My comment is no comment.”

After a presentation on the Lakeland Commons project development, which was approved in a 5-0 vote, Vice Mayor Roman called a point of procedure noting the Lakeland citizen who wished to speak on the anomalies should be given the podium. A motion was made and approved on a 3-2 vote to allow Mr. Hicks to approach the Board.

Mr. Hicks commented that during the fall 2018 election, the Mayor campaigned on a lack of transparency in City government.  School Board Member Hicks noted that in late January the Mayor attended a training session from MTAS (Municipal Technical Advisory Service).  A month later, said Mr. Hicks, the Mayor and Commissioner Gonzales presented a list detailing financial anomalies to the Tennessee Comptroller. “We wouldn’t have known about that which makes that a secret meeting actually.  So, Commissioner Gonzales, you were privy to what is on that list. And we know that because you told the Daily Memphian that they covered the whole spectrum of things and characterized them as not terrible.

“Why did the two of you travel to Nashville to conduct a meeting with the Comptroller?” asked Mr. Hicks.  A secret meeting for which there no notice, no quorum, he added.   Additionally Mr. Hicks said he believes that falls into the category of a secret meeting that wasn’t shared with fellow commissioners.  He said the first step should have been to consult with the City Manager and then the finance director. “I’d like to know how that falls under transparency.”

The Mayor thanked Mr. Hicks and called for the next agenda item.

FY 2019-20 budget discussion

Dr. Ted Horrell, superintendent of the Lakeland School System (LSS), presented highlights of the FY 2019-20 School Board budget to the BOC via a series of slides.  He said this is the fifth year in LSS history and the sixth time to present a budget to the City. Commenting on those six years, he said children who were in kindergarten then are headed to the middle school next year.

Link to Google album of LSS slides and City Manager report: https://photos.app.goo.gl/KQr7RoRe14AVrMhs5

He offered budget assumptions and noted for the sixth straight year, LSS has not asked for additional operations funds beyond the 15-cent property tax. “We are very proud of that,” he said.

Dr. Horrell also provided a slide which addressed a current controversy about school vouchers or educational savings accounts in Tennessee.  He consulted with Maryann Durski, director of local finance for the Tennessee Department of Education.  She said districts will not see a reduction in BEP (Basic Education Program) funding as a result of the vouchers.

Kyle Wright, finance and human resources director, presented the annual budget on first reading, noting it was substantially the same budget commissioners had already reviewed in an earlier meeting.  He noted that the budget has  a property tax rate of $1.25 (the current rate for Lakeland).

Vice Mayor Roman recommended the tax rate be set at $1.89 which is 64-cents higher than the current tax rate.  Mr. Wright said two readings were required to pass the budget and tax rate and there must be a l0-day period for any additional meetings.  The Vice Mayor requested the second reading be at a BOC special meeting May 21st.

A bit of back-and-forth on a resolution

During conversation on the resolution for financial advisory services from PFM, Vice Mayor Roman explained that for the past five years, there has been discussion on a complete school system in Lakeland. (Currently high school students in Lakeland attend Arlington High School via an interlocal between the two cities.)

The Vice Mayor said a complete school system is not just advantageous from an educational point of view but also from the perspective of the City.  He said Lakeland is a unique place with the top school in the state of Tennessee. He said    the City should be built on its greatest strength and with civic pride, talking about a high school.

In the last six months, he said, there have been meetings about a 30-year, 40-year and CON financing to build the school. He said he likes the 12-year CON, likening it to a 15-year home mortgage.  “I brought forward the CON and no other option has been brought to the Board.  I believe it’s in the best interest for the City to pass #11 (the resolution on financial advisory services) and take the next step.

Commissioner Gonzales countered, asking a series of questions including:

  • Why didn’t the former five-member commission approve a CON and build the high school?
  • Why didn’t the LSB ever come to the people saying reserve money could be utilized to build a high school?
  • Why not consider a GOB (General Obligation Bond) for financing? He answered his own question saying some City officials are scared of an election (to approve or disapprove funding for a high school). Vice Mayor objected, saying that was a personal attack. Commissioner Gonzales said to Vice Mayor Roman he could take it for what it is.
  • Why didn’t three commissioners and the Board of Education acknowledge what happened on Election Day? The people voted to build the school when it was affordable.
  • Is there confidence in The Lake District (TLD) and Lakeland Commons (upcoming retail/residential projects) to help with finances and not raise taxes?
  • Why did the LSB first ask for $40 million, then $38 million, then $35 million? Where are the cuts?

Commissioner Michele Dial spoke next, saying no proposals were presented to the Board on other funding mechanisms. And during the last election, there was no language on the ballot for or against a school. She also said Supt. Horrell said a $40 million school would be the top choice, the big wish list. But he also said that plan could be trimmed to eliminate such things as fields, a fieldhouse and bleachers.

Commissioner Gonzales fired back at Commissioner Dial, saying the cost for a high school was $38 million at the last meeting, now it’s 35 million. He said he stands for what the people voted for.  Some things I will not back down for, he said.

Commissioner Wesley Wright joined the conversation, saying he is the biggest cheerleader for commercial development.  He said he is confident in TLD and Lakeland Commons. But it will take some time to get sales tax revenue flowing to the City.  “We can’t wait on that. We can’t wait for that ship to come in.”

Then the Mayor said, “I’ve seen a plan that our superintendent and president of our School Board presented to me. I thought it was rather interesting.  I’m curious why that plan hasn’t come to this Board.” He said it was the plan for the 40-year USDA loan.

Mayor Cunningham said that loan would only raise property taxes by six-cents.  With the money offered by LSB (The School Board offered to contribute $700K of its fund balance toward debt service on a high school), he said debt service on the first 14 years of the 40-year loan could be covered.

He said the 64-cent tax increase will stifle growth and Lakeland will not be able to offer the same services as neighboring cities.  He said officials have fought over the school issue a long time. He suggested sitting down and compromising.  He said, “Stop all the divisiveness. That’s my proposal.”  Let’s do it right, he said, with the 40-year USDA loan.  “It’s the cupcake we’re looking for.”

Kevin Floyd, Lakeland School Board chairman, said, “On March 6th, Dr. Horrell and I met with the Mayor and the City Manager to specifically bring to their attention the option of the USDA loan. As to why the Mayor waited over two months to bring this to the Board’s attention, I cannot explain.

“It would be wholly inappropriate for the Board of Education to formally recommend financing options to the Board of Commissioners just as it would be wholly inappropriate for the Board of Commissioners to recommend educational programming to the Board of Education.”

And the rest of the meeting

Kyle Wright provided the April treasurer’s report noting everything seemed to be in good shape.   He talked of some interest rates going up and Commissioner Gonzales asked if rates increased on the middle school loan.  Mr. Wright said the interest rate is fixed on that loan.

Lt. Kathy Crowder with the Shelby County Sheriff’s Office said there were eight thefts from motor vehicles during April with three of those cars unlocked.  One pistol was stolen, she said.  There were 25 reports total and home owners in one neighborhood provided video on some break-ins, providing clues on a suspect.

City Manager Shane Horn provided his monthly report which included upcoming events and results of recent projects like the Community Clean-Up.

… Photos, video by Jim Willis, Lakeland Currents