published Tuesday, February 15th, 2011

Hamilton: Commission, school board reach no decision on PILOT money


by Kelli Gauthier
  • photo
    Hamilton County school system CFO Tommy Kranz, left, talks with Hamilton County Commissioner Joe Graham at the conclusion of a joint meeting of the county commission and board of education Monday.
    Staff Photo by John Rawlston

Hamilton County commissioners and school board members battling for control of $6 million sit down together for the first time on the evening of Valentine's Day.

A board member passes out heart pencils and tin-foil chocolates.

Cue laugh track.

Few present missed the irony, but there was little love shared during Monday night's joint meeting of the Hamilton County Board of Education and the Hamilton County Commission.

After two-and-a-half hours of posturing, interrupting and accusing, the question that prompted the meeting — which elected body will get control of about $6 million in payment-in-lieu-of-taxes money generated for schools — was left unanswered.

"I think we did good. I think we did real good," said Commissioner Joe Graham, whose resolution that the county approved several weeks ago by an 8-1 vote, placed the PILOT money in a holding account until further action is taken. The money would be used for school construction.

When asked when the board and commission would come to an agreement about who would spend the PILOT money, Graham responded, "Don't know, it takes more meetings."

For the first hour of the meeting, Hamilton County Schools' Superintendent Jim Scales and Chief Financial Officer Tommy Kranz gave presentations on the way the school system is using its federal grant money, and on its $313 million general purpose budget.

Kranz talked about the need for increased resources to address a growing student body, many of whom are low-income and learning English. He talked about the 625,000 square feet of buildings the school system has gained in the past several years, which have added $7.5 million in yearly operating expenses.

There are 633 jobs that are paid for with local money, because those jobs are over and beyond what the state provides for with Basic Education Program funds; that adds an additional $37 million, Kranz said.

The school system's biggest issue is a funding gap where the district's expenses consistently outpace its revenues, Kranz said.

"All of these budget decisions are based on the assumption that we were getting the PILOT money. If not, then the administration at this time has to make some drastic, drastic decisions," he said. "There isn't enough money in fund balance to meet these cuts. ... When you take the PILOT money out of the equation, instead of addressing the shortfall in [fiscal year] 2013, we're addressing the shortfall in [fiscal year] 2012."

Kranz said if the district is not allowed to use the PILOT money for operating expenses, it will face a $7 million projected budget deficit in fiscal year 2012.

After listening to the presentation, Graham, who is in the printing business, began to question the school system's spending. He started with the 49 printed pages of Scales' and Kranz's presentations that were handed out to everyone who attended the meeting.

"That paper and that ink is expensive. That's a huge way you can save money. That's the point of the PILOT money; that wasteful spending is what the PILOT money is about. ... How much [of the budget] goes to schools?" Graham asked.

"Ninety-one percent is going to the schools," Kranz answered.

"Well, that's what it says," Graham said, in a lower tone.

"Well, sir, those numbers are audited. ... That's a number that's been signed off on by a lot of regulatory agencies," Kranz said. "As a result of prudently managing our funds, we've not had to borrow one penny from the county government."

Later Commissioner Tim Boyd suggested the school system cut 20 percent, or $6 million from its central office budget.

School board member Jeffrey Wilson said he was disheartened by Monday's meeting.

"[The school board] is doing a good job. We're well aware of some of the dynamics we face," he said. "There has to be some respect. It's not just saying you respect someone. It's showing you respect them. As a board, we have not been respected."

Gail Chuy, principal of Red Bank High School and president of the Hamilton County Principal's Association, also spoke at the meeting, urging commissioners to consider the consequences of not allowing the school system to use the PILOT money for operating expenses.

For the past several years, schools have made significant cuts while standards have gotten tougher, she said. The results have been fewer class offerings, larger class sizes and fewer Advanced Placement, vocational and fine arts classes.

Her statements received a round of applause from the room, which was packed with principals on hand to show support.

In the end, Graham said he didn't realize he was coming across as adversarial, and apologized if he had.

"First and foremost, what you need to remember about this resolution, this is the school's money," he said. "This money still belongs to the children."

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Poll
Should Hamilton County control PILOT funding for schools?
  • Yes. 4%
  • No. 96%

4565 total votes.

about Kelli Gauthier...

Kelli Gauthier covers K-12 education in Hamilton County for the Times Free Press. She started at the paper as an intern in 2006, crisscrossing the region writing feature stories from Pikeville, Tenn., to Lafayette, Ga. She also covered crime and courts before taking over the education beat in 2007. A native of Frederick, Md., Kelli came south to attend Southern Adventist University in Collegedale, where she earned a bachelor’s degree in print journalism. Before newspapers, ...

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cannonball said...

Those crooks can't turn over the money yet. Either they ain't figured out how to get their hands on some of it or the money ain't all there.

February 15, 2011 at 6:09 a.m.
dendod said...

Dr. "Can't teach a dog to fetch a stick" Scales and Tommy "Smoke and mirrors " Krantz need to be shown the door and get some new people with some new ideas to turn our failing school system around. I learned a lot, the 3 years I spent in the 10th grade but the school system now is a failing system.

A lot of the kids don't even understand gang signs.

February 15, 2011 at 8 a.m.
yaffay said...

The county commission is playing Big Brother. The money belongs to the school system and it is the job of the school board to determine how it is most needed. It seems some of the commissioners are confused about their job titles. Surely the many other needs of Hamilton County are vast enough to absorb the time of those on the commission without them wasting effort attempting to control the schools.

February 15, 2011 at 8:45 p.m.
jpo3136 said...

The Hamilton County School System needs to reject this money. It is a trick.

The money is not a "payment in lieu of" anything. It is a re-named tax.

Renaming something, so that a definition can be denied by a lawyer, is one of the oldest legal tricks used to predicate manipulating somebody.

With a descriptive definition successfully denied, a lawyer can set up ploys because regulatory conditions which would otherwise apply will be absent. This creates a fantasy that anything can be done. In that unregulated dream-world, everyone envisions that they will get more power or what they want.

This is six million dollars worth of manipulation bait.

Six million goes into 313 million about 52 times. This is less than 2% of the operating budget. You don't need it. Reject this offer and walk away.

You are getting played with a common con. Reject the offer. If they insist that you take the money, return it unspent, later. Wash your hands of this deal and survive another day.

Reject the money. Send it back to the Hamilton County Commissioners. This will turn the tables in your (the schools') favor, because they will then have to explain to someone why they collected six million dollars in de facto taxes that were not needed.

Six million dollars in unnecessary tax collection at a time when lawmakers poormouth everything.

If you reject the money, their only politically survivable option is to create a six million dollar surplus.

Their next move will be to waste that surplus. That will be another round of political hoo-hah. If the spending doesn't work out to their liking, then they can bounce back and manipulate the deal further by calling it "waste" themselves.

Don't be the group they later say they wasted it on.

The Hamilton County School System should reject this deal and gain power by using their existing general operating budget, refusing the taxes in dispute, and insisting on a solid, balanced budget.

Don't take the bait. It's not help. It's a setup for an ambush.

As soon as you take the money, they will spring a budget trap. Turn the tables on them. Reject the money. You don't need it anyway. You are smart and strong and stable. They are weak and need the repeated reassurance of county voters to keep their jobs. Their only way to appear active in public is to manipulate someone. Don't be that someone.

Reject the money. Keep the Hamilton County School System strong.

February 16, 2011 at 10:25 p.m.
jpo3136 said...

And, don't assume again that these politicians will help you. That's not in their best interest. If they flatter voters, they get what they want: re-election. Paying you six million dollars was never to their advantage. Take the setback as a hard lesson learned and walk away from this deal.

Reject the money. It is a trap for manipulating teachers and schools. Avoid it.

February 16, 2011 at 10:27 p.m.
jpo3136 said...

One more tip: if you want to break the stranglehold these guys have on the fake acronym, "PILOT," then what you need to do is start referring to this as "The PILOT Tax."

As soon as the average person realizes that this is, in fact, in practice, in reality, a tax, then the cheesy name's effect will begin to wear off.

The politicians who instituted this PILOT Tax Increase by creating New Taxes should be ashamed of themselves. Bring that shame. Reject their support.

Reject the PILOT Tax money. Gain power by sticking to the established budget. Insist on observable owner's equity that supports hard planning in every budget. Do not get played like this.

Reject the PILOT Tax money.

February 16, 2011 at 10:37 p.m.
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