Shaver proposes funding change

Jeremy Nash news-herald.net

Loudon County Commission could soon change the amount of Adequate Facilities Tax going to the county’s two school systems.

Commissioner Van Shaver in June requested commissioners consider diverting an additional 5 percent from the AFT to the Loudon County Board of Education capital projects fund. Commissioners agreed to discuss the matter at a future workshop.

“The county passed the Adequate Facilities Tax in 2006,” Shaver said. “They voluntarily gave 15 percent of it at the time to Lenoir City under no obligation to. Over the years it has grown. The annual collections on AFT has continuously gone up, which is a good thing. So given all of the challenges that are facing us right now, it would be nice to have a small portion of that to go back into the county board of education Adequate Facilities Tax fund.”

Shaver chose 5 percent because “with the growth we’ve got going, it would give the county back a portion of it without really affecting Lenoir City in any negative way.”

“All the AFT funds go directly to the schools, it doesn’t go to the county government, it goes to the schools,” he said. “It can only be used for the board of education debt service or capital projects. So diverting 5 percent of it back to over to the county would give the county board of education a little bit more revenue coming in for capital projects needs and things like that. We just recently approved an $800,000 expenditure from that fund, so we will have to look at ways to replenish that in the future so that would be one way that we could in a small way replenish that fund.”

Shaver said the percentage change would be permanent.

According to Loudon County Trustee Chip Miller, total AFT collected for the 2019-20 fiscal year was $992,027.01, with 15 percent, or $148,804.05, going to Lenoir City. If reduced to 10 percent, Lenoir City would have received only $99,202.70.

Miller said the amount fluctuates — from a low of $3,123 in 2006-07 when the program began to about $1 million in 2018-19. The funds can only be used for educational debt service or capital projects. AFT funds are collected from new construction, he said.

According to the Lenoir City Schools 2020-21 budget, AFT revenue accounts for $131,315.

“Discussion I think is definitely going to happen,” Rollen “Buddy” Bradshaw, Loudon County mayor, said. “I don’t know how much traction it will get. This is one of those things that it’s been in place since enactment of the AFT ... since it occurred and was put in place. I think it’s an uphill fight to get it changed or tweaked. I think if it ain’t broke don’t fix it. I think we’re really stretching so hard to find revenue and just trying to help balance this budget that sometimes we can stretch ourselves too thin.”

Bradshaw said he planned to inform Lenoir City Mayor Tony Aikens, Lenoir City Council and Lenoir City Director of Schools Jeanne Barker if and when discussion occurs.

Shaver didn’t know when he would want the item to be on the agenda, noting it could be as soon as July 20 if not much is up for discussion.

County Commissioner David Meers would like to discuss the proposal in advance with Lenoir City representatives.

“I wouldn’t do anything, I wouldn’t vote for anything until we sit down at the table with them and discuss options and what they can do to recover, how much of an effect it’s going to have on a loss for them,” Meers said. “I mean there’s a lot of factors that will have to be taken into account.”

Barker said she was not aware of the proposal but was “concerned.”

Loudon County Director of Schools Michael Garren said additional funds would be welcomed.

“The board created a five-year maintenance plan that utilizes AFT funds,” Garren said in an email correspondence. “Since we currently have no revenue going into the AFT fund, this would be critical to help meet future facility needs in the district. Budgets are tight right now, and we will have additional expenses in light of COVID, so any additional revenue for operations of facilities would be greatly appreciated.”