NOTE: The email from the city manager as well as his proposed resolution that I referenced are included at the end of this post.
A majority of council have indicated that they will not approve the resolution that I referenced in the following column/post. This begs the question: Now what? Council should absolutely stand their ground, IMHO. But what can they do, then, to force the schools to turn over our money? Since the city manager and city attorney drafted and apparently recommend settling, to whom can they appeal?
City Council Contact Info
Mayor Beehan email@example.com
Mr. Hensley firstname.lastname@example.org
Mr. Mosby email@example.com
Ms. Garcia Garland firstname.lastname@example.org
Ms. Miller email@example.com
Ms. Smith firstname.lastname@example.org
Mr. Hope email@example.com
Nearly a year ago, the Oak Ridge school administration and Board of Education (BOE) stopped making their high school mortgage payment. They blamed multiple “gentlemen’s” agreements, which they later consented did not exist. To date, the response from the public and the city has been underwhelming.
Unlike the BOE, the city cannot opt to simply default on its obligations and has had no choice but to make up the $750,000 difference. Thus, for the last year, Oak Ridgers have essentially been paying the bill for the $66.5 million debt twice.
The efforts of the city and the schools to resolve the matter have been hollow and misleading at best. Not until seven months of past due payments had accrued did they begin deliberating the matter. In a February 6, 2012 joint work session, the school attorney and the BOE publicly acknowledged their responsibility. They conceded that they did, in fact, owe the city this money and that it was simply a matter of putting it in writing. For some unexplained reason they no longer felt that the 2004 referendum satisfied this requirement. After over two hours, the meeting concluded with an understanding that City Manager Watson, Mayor Beehan, Superintendent Bailey and BOE Chairman Fillauer would all hold yet another joint meeting to hash out the details.
That meeting did not occur until over a month later and the results were provided to city council on March 26th by Mr. Watson and Mayor Beehan. They stated that the schools had explicitly agreed to the same terms as before. Mr. Watson explained that the schools would resume making the same level of payments and would repay the past due amount in full upon finalization of the new written agreement.
Mr. Watson and Mayor Beehan reaffirmed that the schools were agreeable to these terms in the April 9th meeting and assured council that a final agreement would be forthcoming shortly. At least twice, the mayor stated that the schools would “uphold the terms of the referendum.” When pressed by council as to why an agreement hadn’t been reached if all were agreeable, neither Mr. Watson nor Mayor Beehan would provide an answer.
Less than five days later, Mr. Watson sent out an email to council informing them that two additional meetings about the matter had since been held. One on April 11th with Mayor Beehan and Mr. Fillauer and one on April 12th with Councilman Mosby and BOE Secretary, Angi Agle. In the end, Mr. Watson states that “ No final resolution was made, but the attached document is a final version that is potentially approvable with the School…Please note that the dollars available from the .25% Anderson County sales for debt reduction would be reduced, thus causing a cost shift to the City.” Contrary to his previous statements, Mr. Watson has taken it upon himself to acquiesce to the school administration and circumvent the will of the people.
The taxpayers of Oak Ridge deserve better, much better. At the very least, we deserve to be told the truth. Instead, the leaders of our school system have hijacked our money and are playing a game of semantics. It is unfortunate that our city manager and mayor are happily playing right along.
Remember, too, that while they are withholding the high school mortgage, the BOE is simultaneously asking council to approve a nearly $1 million increase in their budget from last year. That increase is to cover a technology lease contract that they entered into last August in which they misrepresented the truth about having the expressed approval and authority to “act by and through the City of Oak Ridge.” Furthermore, in the coming weeks the BOE will be asking council for between $1- $3.5 million to make emergency building repairs. No one is talking about how we will pay for any of this. The schools simply expect Oak Ridgers to continue writing checks that we can’t cover.
The voters did not misspeak in the 2004 referendum. There is nothing to deliberate and there never has been. It was and is very clear that the bill of goods we were sold, that the intent of the vote, was to pay for the high school debt with the increased sales tax revenue. That debt, I remind you, was not to exceed $58 million but has now somehow jumped to over $66.5 million in principal alone.
Our mayor and our city manager refuse to stand up for us. Superintendent Tom Bailey and Assistant Superintendent, Ken Green, are both leaving town and leaving us holding the bag. Where are our leaders? Who is advocating for the taxpayers of this town? Why isn’t council appealing to the courts or the state on our behalf?
At this point, it truly is up the citizens of Oak Ridge to stand up for ourselves. I urge everyone who reads this to take some form of action. Contact the BOE, city council, your state and/or congressional representatives. Write letters to the newspapers. Speak out at public meetings. Come to the April 24th meeting where this issue will be discussed yet again. Demand transparency and accountability. If you don’t speak up, rest assured that your silence will be received as it was in the last election when Mayor Beehan said that “the community was pretty satisfied with what was happening, and they want more of the same.”
—– Original Message —–
From: Watson, Mark
Sent: Friday, April 13, 2012 6:13 PM
Subject: Various Updates
Well, I head out tomorrow for Japan. I wanted to pass on a couple of items for your information. As you will recall, Amy Fitzgerald will be Acting Manager while I am gone. Should you have any questions, get in touch with her at 865-414-3554. (cell)
On Monday night, the Council wanted to know the status of the School discussions. A meeting was held with Mayor/Keys Fillauer on Wednesday to discuss a joint resolution. Several on the School Board have another perspective on the aspect of sales tax generation in Oak Ridge per the original ballot language. As such, we brought David Mosby/Angie Agle in on another meeting with the Superintendent, me and the Finance Directors on Thursday. No final resolution was made, but the attached document is a final version that is potentially approvable with the School.
I want to talk to the full Council about this at the Work Session on Tuesday, April 24, a requested change by me while I am back from overseas. I am asking you to confirm on Monday’s water rate meeting. I would like us to have discussion, but I want us to have necessary background info on how the finances work. I would suggest that the discussion will go easier on this very complex process if the Council would make time to spend some time with Janice McGinnis to learn about the County school formula for dividing the sales tax up. The second BE IT FURTHER RESOLVED references the formula for the sales tax.
Please note that the dollars available from the .25% Anderson County sales for debt reduction would be reduced, thus causing a cost shift to the City. This is why I want you to discuss the matter with Janice. Ken is also available to advise on ballot questions. I will look forward to discussing this in full on the 23rd. Your understanding of the numbers can avoid a lot of unnecessary explaining and re-explaining of numbers and percentages, etc.
The school is also trying to resolve the issue of the Woodland School. We will discuss that and some preliminary information on the budget. Unfortunately, we lost a significant amount of needed budget time with the analysis and re-analysis of the water/sewer rates. So, we are a little behind the curve on the budget info. Janice can give you some more feel for the budget during your school sales tax review. The budget for all practical purposes is once again the same amounts for departments with some minor movements downward.
Today, we were noted that the Woodland Town Center project will close next Thursday
I am still a little concerned about Mr. Abbatello’s presentation. I do not think discussing “disaster” signals on prime time is good for Oak Ridge. I support you hearing him out as I did, but this presentation points to the need for our retreat to discuss some macro issues on economic development.
Ms. Lynn Fugate has been selected to facilitate our retreat. Check your calendars for a possible 4-8:30 evening retreat on a Thursday or Wednesday. Ms. Fugate has a returning vet coming home and her weekends are not available until in June. LaVern will be coordinating after your discussion on Monday.
I have attached my official itinerary as one of a group of 15 international managers being taken to the Miyagi Prefecture hit by the tsunami and Fukushima. We will hear their story from a municipal perspective and learn about their emergency responses. Afterwards, I am heading to Naka, the sister city, and will make an official visit. See you on the 24th.
A JOINT RESOLUTION BETWEEN THE OAK RIDGE CITY COUNCIL AND THE OAK RIDGE SCHOOLS OAK RIDGE BOARD OF EDUCATION RELATIVE TO RETIREMENT OF THE DEBT FOR THE OAK RIDGE HIGH SCHOOL PROJECT.
WHEREAS, the Oak Ridge City Council (City Council) and the Oak Ridge Schools Oak Ridge Board of Education (School Board) desire to clarify for present and future city councils and school boards the responsibilities and intentions for the retirement of all debt related to the Oak Ridge High School; and
WHEREAS, by Ordinance No. 13-04, City Council called for a referendum on a proposed 0.5% increase in the local option sales tax “provided, however, the revenue from such increase shall be appropriated and expended for the purpose of funding and paying for construction, renovation, purchase of capital equipment, and/or retirement of school construction debt service for the Oak Ridge High School, and at such time as the high school debt service is paid in full, the sales tax proceeds collected as a result of this increase shall be distributed as prescribed by state law”; and
WHEREAS, the referendum was held on August 5, 2004, and voters overwhelming approved the 0.5% increase in sales tax (from 2.25% to 2.75%) for the purposes set forth in the ordinance; and
WHEREAS, on May 30, 2006, Anderson County voters overwhelming passed a referendum raising the county’s local option sales tax to 2.75%, which effectively created a new formula for the distribution of sales tax proceeds to Oak Ridge, Clinton, and Anderson County schools; and
WHEREAS, the City has continued to use the additional revenue from the local option sales tax increase for high school debt payments as transferred through the Oak Ridge Schools General Fund, however, clarification is desired by City Council and the School Board for future governing bodies to understand the intent and use of this revenue; and
WHEREAS, City Council and the School Board desire to enter into this joint resolution setting forth the responsibilities and intentions with respect to the debt for the Oak Ridge High School project.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF OAK RIDGE, TENNESSEE, AND THE OAK RIDGE SCHOOLS OAK RIDGE BOARD OF EDUCATION:
That the Oak Ridge City Council (City Council) and the Oak Ridge Schools Oak Ridge Board of Education (School Board) agree to use the revenues generated by the 0.5% increase in the local option sales tax as approved by Oak Ridge voters on August 5, 2004, and modified by Anderson County votes on May 30, 2006, solely for the retirement of the debt issued for the Oak Ridge High School project.
BE IT FURTHER RESOLVED that City Council and the School Board agree said revenues will be dedicated solely for that purpose and will not and cannot be used except for the purposes set forth in Ordinance No. 13-04, as approved by Oak Ridge voters on August 5, 2004, specifically: “for the purpose of funding and paying for construction, renovation, purchase of capital equipment, and/or retirement of school construction debt service for the Oak Ridge High School, and at such time as the high school debt service is paid in full, the sales tax proceeds collected as a result of this increase shall be distributed as prescribed by state law.”
BE IT FURTHER RESOLVED that the City Council and School Board concur and define that sales tax proceeds collected in Anderson County at .25% and proportionately provided to each Anderson County educational institution shall be further defined by sales tax generated in the boundaries of Oak Ridge and the remainder of Anderson County, with that portion generated in Oak Ridge being fully applied to payment of the Oak Ridge High School debt and the Anderson County portion being applied according to state law to Oak Ridge Schools.
BE IT FURTHER RESOLVED that the City Council and School Board shall cause a joint review of the financing models associated with payment of the Oak Ridge High School bond issue debt servicing schedule beginning prior to preparation of the Fiscal Year 2014-15 to determine whether economic conditions will allow debt reductions or require additional contributions to debt servicing by either school or city resources. Reviews shall be conducted by 2 representatives from each entity, plus the City Manager, School Superintendent and Finance Directors. Further reviews shall be conducted each two years thereafter or as determined by the City and the School.
BE IT FURTHER RESOLVED that said revenues will be reflected in specific line item detail within the audit of the City.
BE IT FURTHER RESOLVED that the Anderson County Trustee is approved and directed to transfer said revenues directly to the City for the specific purposes set forth above, and shall do so through Calendar Year 2041 or until such time as the debt is paid in full.
BE IT FURTHER RESOLVED that after the debt is paid in full, the sales tax proceeds will revert to direct payment to the Oak Ridge Schools as required by applicable state law.
BE IT FURTHER RESOLVED that the City will delineate the use of said revenues in its annual audit and provide said financials to the School Board.
BE IT FURTHER RESOLVED that a certified copy of this joint resolution shall be delivered to the Anderson County Trustee upon execution by City Council and the School Board.
This the day of 2012.
FOR THE CITY OF OAK RIDGE, TENNESSEE:
APPROVED AS TO FORM AND LEGALITY:
Kenneth R. Krushenski, City Attorney Thomas L. Beehan, Mayor
Diana R. Stanley, City Clerk
FOR THE OAK RIDGE SCHOOLS
Thomas E. Bailey, Superintendent
OAK RIDGE BOARD OF EDUCATION:
W. Keys Fillauer, Chairman