The way Hamilton County government operates fee offices is only a memory for other counties in Tennessee.
Earlier this year, County Clerk Bill Knowles dipped into the county general fund and retrieved $155,000 in excess fees to cover expenses because of declining fee collections. Even so, his office had to lay off five workers.
Pulling money out of excess fees is perfectly legal. But state government officials said Hamilton is among only a few Tennessee counties whose elected officials still operate their offices on fees and give the excess to the general fund.
Most now turn over all their fees monthly and the county pays the cost of their salaries and expenses, said Gary Hayes with the University of Tennessee's County Technical Assistance Service.
"With the way the economy is, if you're on fees and your fees aren't meeting your requirements, you may or may not have to lay off staff," Hayes said. It also helps the county's cash flow to receive fees monthly instead of twice a year.
County Mayor Claude Ramsey said the system works well.
"Those are separate operations and those people were elected to run those operations by the fees they collect or don't collect," Ramsey said.
Hamilton County Trustee Bill Hullander said he wouldn't change the way things are done now.
"I just like it the way it's set up, because I'm in control of investing those fees where I want to invest the money," he said.
The excess fees are counted as county revenue but officeholders can request them at any time without County Commission approval as long as they are in office.
Register of Deeds Pam Hurst has turned over $20.7 million in excess fees since 1998, and County Clerk Bill Knowles has turned over $8.18 million since 1978, records show.
Assistant county auditor Lee Brouner said the amount of money generated in excess fees might be misleading, because the general fund subsidizes some of the operating costs of fee offices.
For example, while the county clerk pays his salaries out of fees, employee benefits, including pension and health insurance, are paid by the county general fund. Brouner said the only offices that generate a true profit in excess fees are the clerk and master, register of deeds and the county trustee, which also receive benefits through the general fund.
County Administrator of Finance Louis Wright said there are no restrictions on how officeholders can spend the excess fees, provided it is for their office.
"They can be spent on any legitimate expense of the office," he said.
Knowles tapped his excess fees after revenues dropped from $553,000 in 2008 to only $89,000 in 2009.
"The bulk of it was motor vehicle collections were down ... because people weren't buying cars," County Auditor McGriff said. He said Knowles' office is most susceptible to the economy because he deals with tag and title fees and different types of licenses.
Wright said Knowles' request was the first time he can remember an official asking for some of the money back.
OTHER COUNTIES
Shelby County used to operate its fee offices as Hamilton does, said Raymond Pipkin, Shelby's deputy administrator of finance.
He said officials there decided to do away with the practice of giving the county excess fees. Pipkin didn't know the exact reason for the switch, but speculated it had to do with reducing offices' dependence on fees, which can be affected by downturns in the economy.
"There's a little bit of comfort that they don't have to live off of every fee they collect," Pipkin said.
Knox County works in a similar way to Hamilton County, according to its accounting and budgeting manager, Chris Caldwell. He said he cannot recall an instance where an official there recalled excess fees. He said county officials might be reluctant to adopt a system similar to that of Shelby County. He said there are "not many counties" in Tennessee under the excess fee system.
"You're dealing with elected officials more than anything," Caldwell said. "Maybe it's more of a power thing than anything. 'This is my office I'm going to run it how I want to run it.'"
Hamilton County's Wright does not think having all fees turned over to the county would help improve the county's cash flow.
"It would make very little difference because we're a very well-funded organization," he said.