County debates EDA funding
 

Jeremy Nash news-herald.net

Legal advice from county attorney Bob Bowman complicated discussions about reducing Loudon County Commission’s yearly contribution to the Loudon County Economic Development Agency.

Commissioners sought Bowman’s help at a Monday workshop after considering a flurry of motions two weeks ago on how much the county would contribute.

“What we found out tonight from Bob Bowman is what we thought was a couple weeks ago and we have the confirmation,” Matthew Tinker, county commissioner, said. “We hope the cities and county work well together and this partnership with the EDA has good continuous growth both in housing and in industry.”

According to a 2008 interlocal agreement, the county allocates 68.9 percent to the EDA, while Lenoir City gives 13.9 percent, Loudon provides 15.3 percent and the Committee of 100 chips in 1.9 percent.

State law bases the funding formula on population. No one could could determine Monday how the percentage was determined in the interlocal agreement. At one point in the discussion, Commissioner Van Shaver said former EDA Executive Director Pat Phillips told him it was based on industrial property.

“The interlocal agreement formula presently has Loudon County paying just over 68 percent of the budget for EDA,” Bowman said. “That actually is better for the county than what the statutory formula is by anywhere from 5 to 7 percentage points.

Bowman brought up what he considered the “hammer clause” in state law. If the county does not fully fund the EDA based on either the state formula or interlocal agreement, it would be prohibited from receiving state grants.

Shaver worried the EDA could ask for however much it wanted.

“Bob mentioned to me did we want to try to handle it statutorily? Do we want to call on our representatives to take a look at this and see?” Shaver said. “We all know that’s a total waste of time. You can’t get anything done that’s easy to do statutory. So what it really comes down to based on what Bob has said is we’re stuck. Jack’s (Qualls, EDA executive director) got a job until he retires like Pat Phillips (former EDA executive director) did. We have to pay any amount they say and the cities get all the benefit from it and we get nothing.”

Bowman said the interlocal agreement does have an amendment provision, but all parties have to be in favor of a change.

“Who’s going to agree from Loudon city to up theirs and from Lenoir City to up theirs? That’s what gets me,” Kelly Littleton-Brewster, county commissioner, said.

Jack Qualls, EDA executive director, said the EDA has not asked for an increase in its budget since 2013.

“If you’re worried about the hammer provision statute, there is an option to ask for an attorney general’s opinion as to what grants that that applies to,” Bowman said.

Henry Cullen, commission chairman, said after the workshop that he would be in favor of a three-way split if possible, but the interlocal agreement as written does not allow that.

“What (Bowman) said is if you don’t do it you’ll suffer the consequences of potentially losing the state grants, and what the followup research is to find out what state grants,” Shaver said after the workshop. “Every state grant or these specific don’t-matter state grants? If we find out that we’re going to lose $6,800 in state grants and save $80,000 by pulling backwards, well the math is easy. The question yet to be answered, what state grants do we lose?”