AC Mayor pens editorial on finance switch, announces Q&A session

As we reported earlier this month, Anderson County Mayor Terry Frank has notified commissioners that she has vetoed the resolution changing the county’s financial management structure from the 1957 law to the 1981 law that was passed in a 13-2 vote by the County Commission last month. Major changes include stripping the Mayor of chairmanship of the County Budget Committee and the ability to appoint its members and instead creating a seven-member finance committee made up of the mayor, the director of schools, the Highway Superintendent and four commissioners. That committee would have the power to hire and fire the county budget director as well as the purchasing director, responsibilities currently held by the mayor.

In a letter to County Commissioners copied to members of the Anderson County media, Mayor Frank says that while the measure was overwhelmingly approved by the Commission, she does not “believe the public we serve was made aware of the large changes being proposed.” She also laments what she calls the “very limited public discussion regarding the change and the current interpretation of the rules by Chairman (Steve) Emert [that] prohibited the citizens from speaking on an item on the agenda.”

The Mayor also cited a lack of input from department heads, fee offices, the schools or her office as a reason for her veto.

It will require nine votes from the 16-member commission to override Frank’s veto. Commissioners Chuck Fritts, Myron Iwanski, Phil Warfield and Tim Isbel have been nominated as members of the new finance committee.

In an editorial piece you can read on, the mayor touts what she calls three years of fiscal “stability and progress” under the current 1957 statute, pointing to no audit findings by the state last year, the continued growth of the fund balance and the removal of the county from Moody’s Investor Service’s “negative” outlook and an improved Standard & Poor’s rating.

Writing that there is a “lot to discuss about the change to ’81, which is why I issued a notice of veto to County Commission. Prior to Commission’s next vote on the topic on Feb. 22nd, [the mayor] will host a question-and-answer public forum on the 1981 Act in Room 312 of the Anderson County Courthouse at 6:00 pm on Tuesday, February 16.

Check out our previous story on the mayor’s veto here.

(Anderson County Mayor Terry Frank) The financial story of Anderson County in the last three years has been one of stability and progress. For the first time since 2006, Anderson County was removed from high-risk audit status in 2013, and placed on low-risk status. That held for 2013, 2014, and 2015. As we closed out the books on 2015, our Accounts and Budgets and Schools cheered zero audit findings in our Comprehensive Annual Financial Report by the State of Tennessee’s Division of Local Government Audit.

Through partnership of our Budget Committee and County Commission, we saw three consecutive years of growth in fund balance, improved cash flow position, and a commitment to raising the bar on dipping into the fund balance by requiring a supermajority approval (12 of 16 members.) In 2013, we raised the supermajority requirement to $3.5 million; in 2014 to $4 million; and in 2015 to $4.5 million.

We kept new debt to a minimum, and for two consecutive years also modified existing debt agreements to save taxpayer money over the life of the bonds without extending the maturity dates of the debt.

Because of improved financial performance that led to reserve and liquidity growth, in July of 2015 Moody’s lifted the negative outlook they had placed on Anderson County in 2011 for a “weakened financial position” after depleting General Fund reserves. Our improved rating from Moody’s came on the heels of a two notch increase from Standard and Poor’s from A+ to AA.

For the third consecutive year, increased cash flow and strengthened reserves meant no tax anticipation notes—or borrowing—to fund the operations of government. This translates to direct savings for taxpayers, not to mention a great scorecard for families, businesses and industries looking to move here!

We also established for the first time, a capital projects fund to begin instituting long-range planning and funding for capital projects or capital replacement in order to limit future debt, or crisis management that often leads to unnecessary tax increases.

Historically, the accounting structure of Anderson County has worked—and is ever marching toward improvement. Success is proven in the fact that of 95 counties in the State of Tennessee, Anderson County is 1 of a select group of only 8 that consistently earns the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Association. (And none of the winners are ’81 Act counties.)

So with improved ratings from independent rating agencies like Moody’s and S&P, accounting and reporting awards, zero audit findings in 2015, debt savings and liquidity, why switch management systems?

Frankly, with the progress we have made, the proposed change is a massive step backwards for Anderson County. And little to no debate or discussion has taken place. Nor were the schools, other departments, or even other counties brought into the discussion. The 1981 Act is a system designed for small, rural counties who have no centralized accounting system and limited resources—a fact proven by the average population size of the 23 counties using the ’81 Act being 39,755.

The 1981 Act was designed to centralize accounting by reducing political accountability at the ballot box, and replacing it with an ultra or supra-authority in the one position of Finance Director. By eliminating political repercussions for the office-holders, the hope was that counties could move to centralization and all responsibility would shift to a virtually unaccountable “finance officer.”

There is a lot to discuss about the change to ’81, which is why I issued a notice of veto to County Commission. Prior to Commission’s next vote on the topic on Feb. 22nd, I will host a question-and-answer public forum on the 1981 Act in Room 312 of the Anderson County Courthouse at 6:00 pm on Tuesday, February 16, 2016. The public is invited and welcome to attend. Such drastic changes to your county government, and the future of your county, deserve an open and transparent discussion.

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