Property tax, budget both OK’d by Lenoir City Council

Property tax rate, city and school budgets all receive unanimous approval

Adam Delahoussaye news-herald.net

Lenoir City residents can expect zero change to their property tax rate amidst some rising expenditures and questions around school funding during the upcoming fiscal year.

At the first reading of Lenoir City’s budget for the latter half of 2025 and first half of 2026, Finance Director Shawn Bunch indicated that some expenses would require the City to dip into their reserve funding.

While it isn’t known to what extent that will be, Bunch did outline a number of new spending areas that would be impacting the checkbook.

Regardless, the Council seemed satisfied with the final draft.

“You never want to take a lot from reserves,” said City Council member Eddie Simpson. “But under the circumstances this year, I think it’s money well spent to make it work out and make a balanced budget.”

WAGE INCREASE, INCREASED RETIREMENT BENEFITS

One of the main justifications for this excess, pointed out by Bunch and Lenoir City Mayor Tony Aikens, was a cost-of-living increase and a need to keep individual city employees above water financially.

Included in this new budget is a 3% wage increase for all city employees and increased benefits for retirement afforded to those same workers.

During the first reading of the proposal on June 9, Bunch cited rising inflation on a national level as one of the symptoms currently ailing checkbooks across the state. The unanimously approved proposal saw other channels of profit that included an increase of the price of permit fees, state shared revenue, and increased waste collection fee. The property tax rate will remain at its previous rate of $0.9455 per every $100 of assessed value.

SCHOOL SYSTEM CONCERNS

But while the city itself sees few interruptions to its standard business spending, the school system is currently subject to more uncertainty.

Prior to her address, Mayor Aikens notified the Council and the crowd that Dr. Millicent Smith from Lenoir City Schools had made him aware of a potential loss of funding coming from county-based tax revenue.

Currently, Lenoir City is eyeing the end of a fouryear agreement with Loudon County to receive about 12.5% of the total revenue seen from its adequate facilities tax. The funds received from this construction-based tax go to directly impact school operations, Smith said, totaling around $200,000 of annual expenses.

According to Aikens, an email currently circulating among city employees’ inboxes alluding to a possible elimination of the funds was what initially raised cause for concern.

Aikens also shared with City Council that worries of losing that money isn’t unjustified when you look at the history of the tax. … Prior to 2021, Lenoir City Schools received 15%, or around $400,000 from the tax fund annually, before Loudon County Commission reportedly made a push to eliminate the partnership or heavily reduce it altogether. It wasn’t until Aikens withheld proper paperwork and wrote a letter of persuasion that a deal was finally struck, according to reports.

But that deal is currently eyeing expiration, with Aikens and Smith now worrying that the Commission will try to reduce the relationship even further or sever it altogether.

As of right now, the Commission hasn’t made comment or publicized any documentation alluding to ending this current agreement.

“There is, perhaps, a sentiment from the part of the County Commission to eliminate our 12.5%,” Dr. Smith said.

The current agreement was set to end on June 30. At the June 23 City Council meeting, Mayor Aikens asked for advice on his plan to send a letter to County officials similar to the one he drafted and mailed in 2021. Most of the body agreed that it was the right move, with Council member McNabb advising to steer clear of “inflammatory” language, if the relationship between county and city is as strained as Mayor Aikens seems to think it is.

According to a post from County Commissioner Van Shaver on his personal website, the County has no plans to suspend this fund “yet.” However, Shaver did express that he doesn’t see the use for County funds to go to city schools, stating that the iffy relationship between the two is primarily at the fault of current Lenoir City administration.

“Unfortunately as long as city officials, led by their mayor, continue to violate state laws, refuse to pay their bills and give away county tax dollars to special interests, it makes it hard to have any kind of trusting relationship with the city,” Shaver said in a letter to Lenoir City. “Maybe someday though.”

Dr. Smith and Mayor Aikens did agree that the funding was necessary, especially given the large population of county students in the city school system coupled with construction skyrocketing in the four-year period between the last AFT agreement up to today.

Aikens guessed around 60% of the student body to be county residents, while Dr. Smith simply said that it was “a large number.”

Aside from the potential loss of a large bonus from the county, Dr. Smith didn’t report any major changes to the proposed budget that came across Council’s desk on June 9. Centegix safety badges, a 4% wage increase for all employees, as well as other increased safety measures, were a few of the big ticket items on her proposal.

Its second and final reading passed unanimously.

In other news, Lenoir City Council:

• Made final amendments to the 2024-2025 fiscal year budget.

• Approved an ordinance to rezone a piece of property on Poplar Street from a single-family residential to medium-density residential district with the owner intending to build duplexes on the land, according to Beth Collins from the Lenoir City Planning Commission.

• Considered the recommendation from Knox County Mayor Glen Jacobs and approved the appointment of LeeAnn Foster to be the Knox County Representative for the Lenoir City Utilities Board of Commissioners. Foster will replace George Bove, who previously served on the Board for the past 12 years.

Lenoir City Council will reconvene on Monday, July 14, at 6 p.m. at the Lenoir City Municipal Building.