Citizens for Better Government

Blount County Tennessee

The Sunday Daily Times article attacks the Citizens for Better Government comparison of Blount County spending with the three counties closest to us in population (Washington, Sullivan and Sumner). The article starts out by attacking the very idea of using average per capita spending, to develop benchmarks for County spending. If this is true, why does the author use per capita spending in all his charts that accompany the article.

Matt Murray claims that looking at average spending of other counties implies that the counties “he has chosen are efficient”. This comment makes no sense. We chose the three counties closest to Blount in population. They probably have the same inefficiencies of any County government. Yet, we found that Blount County spends $9.8 million more than the average of these counties. Even Mr. Murray should find that disturbing.

Next, Murray contradicts himself saying our comparison can be a “healthy exercise” in scrutinizing county spending.

Murray adds: “I would hate to think those results would be used directly to guide our local budget.” Clearly Murray never attended our presentations. That was never the purpose of our study. The study showed major overspending Blount County government. It identified the areas where the overspending was taking place. The study suggested that the Sheriff Berrong be asked to explain why he is spending $5.3 millon more than the AVERAGE of the three comparison counties; and, that Mayor Mitchell explain why his departments are costing $3.2 million more; and have Circuit Court Clerk Hatcher explain why his departments are spending $800,000 more. Unfortunately, none of these questions were asked by the members of the Budget Committee in the process of formulating the budget and the proposed tax increase.

The article says: “It is very challenging to compare” county budgets. Yes, it is hard to do a good comparison. That is why several members of Citizens for Better Government spent more than three months studying the audit reports for our county and the comparison counties. Only that kind of effort can produce a true apples and apples comparison. The errors and omissions in the DT comparison speak to their lack of similar effort in preparing their story.

The article says that Jim Folts “alleges” that the county overspends on industrial and economic development. I don’t allege anything. The information from the audit reports shows that Blount County spends $824,591 more on Industrial and Economic Development than the AVERAGE of the three comparison counties. While Mr. Murray, who is a member of the Economic Development Board, may not like it, someone needs to ask why we have so many costly industrial parks that are empty, or nearly empty. By the way, the Daily Times neglected to mention that Mr. Murray was not a disinterested observer in this debate.

The article says: “In his study, Folts pointed out that Blount County had the highest property tax rate among the four counties in fiscal year 2009.” I guess the DT never bothered to review the slides. Actually, the CFBG study says nothing about tax rates, because they fluctuate with property reassessments, and are an unreliable basis for comparison.

The article calls Jim Folts “something of a gadfly”, because he dared to question the spending and debt decisions of the local political machine. It fails to mention that CFBG has been proven right on many issues. We were the first to raise serious concerns about the huge quarter billion dollar debt the county was taking on, in 2007. We did an extensive debt analysis, showing the County had far too much debt, and our officials were endangering the financial stability of the whole County by dealing in risky variable rate bonds and interest rate swaps. We presented this analysis to many groups in 2008 and 2009. Today, nearly every person who has looked at the County debt structure, has confirmed the problems we brought to light back in 2007. If that is what a “gadfly” does, we are proud to be one.

The article implies that Jim Folts rigged the jail data by using the actual inmate count at all four jails for the month of July 2009. This is nonsense. Our study used FY 2009 audit reports. FY-2009 ended in June. The only inmate data available was for the month of July 2008 or July 2009. We chose the closest month to the fiscal year we were studying.

The article goes on to say that we should have used inmate capacity in our study rather than the actual number of inmates present in the jail. This does not pass the simple common sense test. We used actual inmate counts because they are usually higher than capacity and better represent what costs should be. You don’t feed and guard theoretical capacity, you have to feed and guard the real people who are present in the jail.

The article admits Blount has the most expensive jail of any Tennessee county. Then it justifies the cost by subtracting the state and federal revenue from the costs. The author does not do the same for the other comparison counties. If he had, he would have confirmed that, no matter how you look at things, Blount runs a very expensive jail.

The article goes on to say that jails benefit from economies of scale and implies that because the comparison counties had larger jails, this somehow justified Blount county spending 63% more than the AVERAGE of the other counties. There may be some merit to this argument. A comparison with jails of similar size shows Blount spends nearly 50% more on its jail than the other counties.

The DT has a chart showing interest cost on long term debt. Of course, Blount is the top spender. But the DT shows Washington County as a close second. The DT forgot to include an additional $1.3 million of debt service charges in their calculation. These are charges related to Blount County’s $105 million of variable rate debt which must be added to the interest charges for a true apples and apples comparison. Washington does not have any variable rate bonds. When this change is made, Blount County’s debt charges far exceed those of Washington, Sullivan and Summner.