The BOC (Board of Commissioners) met in a two+ – hour regular session tonight (8.8.19) at City Hall and approved on first reading amending the Fiscal Year 2019-20 budget and the property tax rate to $1.20 from the current $1.89.
The measure is likely to change again, however, as commissioners and City staff members presented conflicting scenarios on whether the Lakeland property tax rate should be set at $1;14, $1.20 or $1.25. (The FY 2018-19 tax rate was $1.25.)
Link to agenda: https://www.lakelandtn.gov/ArchiveCenter/ViewFile/Item/860
Link to Livestream: https://livestream.com/lakeland/events/8776215
Vice Mayor Josh Roman said eliminating the expense of CON (Capital Outlay Note) financing to build the first high school in Lakeland and, instead, using a USDA 40-year loan, should mean the necessary property tax rate for Lakeland would be $1.14. Mayor Mike Cunningham said he thought the rate should be set at $1.25 as recommended by City staff.
The Vice Mayor said the math indicates setting the tax rate at $1.20 would generate $1 million in surplus revenue and he wanted to know how that money would be spent before agreeing to the rate.
Commissioner Richard Gonzales, Jr. said if $1.20 would provide a surplus then $1.25 would even be better. He said the additional funds might be necessary, saying it’s not known how much the new school will cost.
Vice Mayor Roman asked if the current budget reflected $700,000 per year that the Lakeland School Board said it would contribute to funding a high school? Mr. Horn said that money was reflected in the current budget.
Kyle Wright, city finance director, said the City could not operate on anything lower than $1.25. Shane Horn, city manager, said he felt the $1.25 was the right rate and might even work in the next Fiscal Year.
Mr. Wright and Mr. Horn continued to say amending the current budget to reflect a $1.25 tax rate from $1.89 would not change the mechanics of the budget dollars. Mr. Horn said staff would go back to the original budget using the $1.25 tax rate from FY 2018-19.
Mayor Cunningham said he wanted to make sure he wasn’t strapping City Hall staff by lowering the rate. “I am tickled to get a nickel off my tax bill,” he said. But he said he is concerned the lowered tax rate might impact City services.
Commissioner Gonzales said folks are comfortable with $1.25 and suggested the Commission stick with what works.
City Attorney Will Patterson encouraged BOC members to approve the first reading of the ordinance. He noted the Shelby County Trustee’s Office must manually input the new amount into their computers within a short window. He also said that during second reading the amended rate could be changed again.
The tax rate measure, amended to $1.20, was approved with Vice Mayor Roman and Commissioners Wesley Wright and Michele Dial voting yes. Commissioner Gonzales voted no and the Mayor abstained.
Commissioner Wright recommended that Kyle Wright, city finance director, meet with Vice Mayor Roman to review the budget figures. The Mayor said he would also like to see the figures before the next vote.
Commissioner Wright suggested there be a special called meeting later this month after the Vice Mayor and Mr. Wright have a chance to talk. Mr. Patterson said the special meeting could be at the end of the month after the USDA likely has provided a confirmation letter on the USDA loan for the school. At that point, the dollar amount on the tax rate could be changed to a new number.
Background on budget, taxes
The FY 19-20 budget was passed on second reading May 28th by the BOC and took effect July 1st. It is based on a property tax of $1.89 per $100 of assessed value on all real and personal property. It was to cover the financing of a $35,000 CON (Capital Outlay Note) to build the first high school in Lakeland.
But a new funding mechanism was introduced to the BOC this spring, the USDA Rural Development Loan. It is a 40-year financing mechanism which would at best require a few cents of property tax increase versus the 64-cents required to fund the CON.
There is strong belief among elected officials and City staff that the USDA loan will be approved, thus negating the need for the CON and the higher tax rate.
So Vice Mayor Roman along with Mayor Mike Cunningham and Commissioner Wesley Wright sponsored an ordinance tonight to amend the 19-20 budget, effectively lowering the property tax rate from the $1.89.
USDA
Terence McGhee and Arlisa Armstrong with USDA Rural Development came to the BOC meeting to update officials on the loan process for the high school. Mr. McGhee said if you have a quality education in your community, you grow your work force and that leads to true economic prosperity.
He said the loan process is in the last leg with many moving parts. The three components, he said, were financial, architectural and environmental. The letter confirming the loan could be in City hands by Aug. 26th or sooner he said. “We’re here when you start the process and when you cut the ribbon. We’re highly engaged.”
Security cameras
The resolution authorizing the purchase of neighborhood cameras was removed from the agenda. Mr. Patterson asked that it be delayed to the next meeting for nationwide bidding. The Mayor said he wanted to do it right. He also said he had talked to Shelby County Commissioner Mick Wright about several SkyCop cameras from the County at no cost to Lakeland.
Commissioner Wright had proposed a 90-day period of 30 cameras to be installed around Lakeland perhaps in September on a trial basis.
Vice Mayor Roman said security of the City is a passion of Commissioner Wright. So he suggested a retreat about the subject so all can be educated about the cameras and cost. Commissioner Wright said he would set the retreat as quickly as possible and hoped to still have the trial basis of the cameras set in place in September.
Rest of the meeting
Lt. Natalie Hillman
with the Shelby County Sheriff’s Office gave the monthly crime report for Lakeland, noting 38 total crimes with the bulk of them thefts from motor vehicles. Many were unlocked doors, she said, which are crimes of opportunity. She said there was a car-jacking on U.S. Highway 64 and the road rage/meth bust Sunday (8.4.19) by the Sprouts Farmers Market in Lakeland. Commissioner Wright asked if there was an update on a Memorial Day weekend 2018 shooting at the Oakwood Clubhouse and she said no.
In his monthly report, Mr. Horn provided information on several projects include New Canada Road; the Bike/Ped Trail improvements on Canada Road; two sewer projects; an ADA transition plan for the City; and the Athletic Complex.
Butler Snow LLP was appointed to serve as bond counsel for the USDA loan.
A project development contract was approved with The Lake District (TLD) on a 4-1 vote. Commissioner Gonzales voted no. He questioned the project, asking questions of City Engineer Emily Harrell about what was being approved. She said TLD is no different from other developments. She said owner and developer Yehuda Netanel has met the City standards, provided a bond and paid his fees. Mr. Gonzales then asked about some legal fees owned by Mr. Netanel from 2017. Mr. Netanel responded that he paid $20,000 to the Lakeland Industrial Development Board as requested.
Four other resolutions were approved unanimously: A contract with Oakwood Grove subdivision; emergency debris removal contract; a truck purchase; and a funding agreement with the Lakeland Area Chamber of Commerce.
The Dog Park at Zadie E. Kuehl Memorial Park was deferred to research details on an access street to the Park from Canada Road through The Pet Hospitals, which donated the land for the Park. Currently there is only one entrance to the Park through the adjoining neighborhood. Commissioner Michele Dial talked of adding the road along with parking spaces, a fence and grading. The cost for design work would be $8,200. Cost to do the road with gravel would be $91,000; asphalt, $153,000. Plans are to open the Park by the spring.
Mr. Wright presented the July treasurer’s report, saying the Fiscal Year just rolled over with little to report. He said there is $9.8 million in the general fund and $9.2 million in the fund balance. Of that $9.2 million, $5 million is designated for identified projects so that is not spendable money, he said. And per policy, $3.9 million (a required percentage) has to be reserved. So, he said, there is only $300,000 to spend.
… Photos, video by Jim Willis, Lakeland Currents
