Commission to rectify $350,000 animal shelter loan at May meeting

The Blount County commission in May will repay itself $350,000 in seed money loaned from one fund to another in 2007 to jumpstart fundraising for the Blount County Animal Shelter.

According to finance director Steve Jennings, the loan was from the Debt Service Fund to General County Fund. “In 2007, it was the commission’s decision to build an animal shelter and at the same time, the Smoky Mountain Animal Care Foundation agreed to begin raising money to go to the construction and operation of the shelter,” Jennings said. “The commission though, rather than just grant an appropriation for $350,000 of seed money, chose to loan the money from Debt Service Fund with the idea that three years later that money would be repaid.”

Jennings said the idea was part of cash donations made to county by Smoky Mountain Animal Care Foundation would have been put aside to pay the debt. “That housekeeping/ bookkeeping activity didn’t occur, and, with the transition between my predecessor and myself, I wasn’t aware of this until state auditors said we were late and it had to be repaid,” he said. “The remedy is to simply pay back ourselves from General Fund to Debt Service Fund.”

The finance director said Smoky Mountain Animal Care Foundation has paid nearly $1.3 million into the animal shelter for construction, medical care for the pets, vaccinations, neutering and spaying of animal and dog food over the past three years. “It has all ended up, in effect, in the General Fund, because we didn’t pull it away. What the budget committee is asking you to do is pass a budget amendment to use fund balance to pay back the Debt Service Fund,” Jennings said.

District 5-A Commissioner Peggy Lambert made the motion and District 3-A Commissioner Steve Samples seconded it.

“I think it is important to note the money came back to the county, and it is simply a bookkeeping error on our part,” Samples said

Jennings said that, although the foundation was never obligated to pay back the $350,000 used to start construction on the county-owned shelter, in effect, the foundation did repay the note through the $1.3 million cash and in-kind donations it generated. “I believe this has in fact occurred. It filtered its way back into the general fund; it just wasn’t set aside,” Jennings said.

The commissioners approved sending the motion to repay the inter-county loan by a 19-1 margin with District 6-B Commissioner Scott Helton voting no and District 4-C Commissioner Jerome Moon absent.

During the Budget Committee meeting on Monday, commissioners passed a motion setting the tax rate at $2.15 and sent it for consideration to the June commission workshop. This is an .11 cent increase over the current $2.04 per $100 of assessed value tax rate. According to Jennings, .73 cents would go to the General County fund, .99 cents would go to the General Purpose Schools fund and .43 cents would go to the Debt Service fund.

Jennings said that with the recommendation, the county would take $1.6 million out of fund balance, and the schools would use $500,000 to $700,000 out of their fund balance.

Several commissioners on Tuesday evening questioned why the budget couldn’t be discussed during the upcoming May commission meeting. Commissioner Jim Folts made a motion to put budget discussion on the agenda for the meeting and District 9-B Commissioner Monika Murrell seconded it.

“My feeling is, the budget and all the problems with it need more discussion than just a meeting in June,” Folts said. “We ought to have discussion at the next commission meeting.”

District 1-B Commissioner Tab Burkhalter asked what the rationale was in delaying further discussion until the June agenda workshop. “I know we’ve had several months worth of hearings,” he said.

Jennings explained that it was past commission practice to not discuss the budget in May so as to give commissioners time to consider the items in the budget before taking them up at the June work session.

“It would give commissioners time to look at and absorb what we have learned,” District 6-A Commissioner Holden Lail said.

Folts said the practice needs to change. “Who cares what past practice was? This needs discussion. Maybe it is time to change some practices, and maybe the county’s finances would be in better shape if we changed some of these practices,” he said.

The motion failed by a vote of 6-14 with Commissioners Folts, Murrell, Rick Carver, Ron French, Mark Hasty and Mike Lewis voting yes.

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