Lawyers, not students, are getting your money

Lawyers, not students, are getting your money

April 27th, 2014 in Opinion Times

Hamilton County taxpayers - especially those with school-age children - need to pitch a fit.

On April 11, the county school board sued Chattanooga over $11.7 million in city-collected liquor taxes that were not paid to the school system since the merger of the city and county schools in 1998-99 -- a period stretching across four mayoral administrations: Jon Kinsey, Bob Corker, Ron Littlefield and now Andy Berke.

Hamilton County School Superintendent, Rick Smith, and school board attorney Scott Bennett, have said they "hated" to file the suit but were simply at a stalemate with the city and couldn't get meetings with Berke.

Based on emails obtained from the city, those claims appear disingenuous.

In fact, the city and Rick Smith jointly approved an announcement of a settlement in late August. The announcement called for the city to give schools $1 million, plus pay $500,000 on an early childhood development initiative at Calvin Donaldson Elementary School, fund the county's e-books effort for four years, and donate the site of the former Poss Homes to support the county's plan to construct new athletic facilities for Howard School.

The deal also included the transfer of the North River YMCA pool, and forgave the county for past-due stormwater fees (unpaid since 2009). The agreement stated the city would resume the liquor tax payments in October 2013. These were essentially the same terms Smith had sought from the city in an email sent 25 days before. In that Aug. 5 missive, Smith wrote that the city owed $7.2 million dollars, accrued since 2005.

A quote in the settlement announcement from Smith says, "In the past, there have been some issues with how the funds were paid to the school system. I am excited that we have been able to work with Mayor Berke to reach a clear solution and we can move forward."

That's what Berke thought, too -- for a couple of months.

"Usually when you jointly announce with another organization a resolution of a topic, you think it's resolved," Berke said recently. "We kept working on paperwork. There were exchanges of paperwork to memorialize that agreement. And then, it just stopped."

By November, it was clear the county school system was backing out. Smith met with Travis McDonough, chief of staff and counselor to the mayor, on Nov. 7. Smith met with Berke and members of his administration twice after that in March. At that stage, the county school system was suddenly claiming the city owed more than $15 million going all the way back into the 1970s, and Berke and Smith had agreed to put smart heads at a table at several meetings over 30 days to work out a solution. But halfway through that process, the county balked again, and the board of education filed suit.

Berke, in the first meeting of that 30-day period, said the city would pay the $11.7 million over six years and asked for a work group, similar to what he put together to work out the pension settlement recently, to fine-tune a settlement.

Some of those fine points are the past due and/or future stormwater fees on the county schools in city limits that the county quit paying in 2009. Berke also said he would like the city money to be "new" money in the schools budget -- not just money the county can subtract from its schools allocation.

First Smith agreed to broad terms -- the repayment and the work group. But then less than an hour after the meeting ended, he called to say that work group wasn't needed, Berke said. On Thursday, Smith said where things fell apart was when school board members reported a "rumor" that Berke was trying to get amendments through the Legislature that would limit what the schools can collect in past-due liquor taxes. Berke and his administration deny that, and in fact the final legislation aimed at addressing dozens of similar problems all over the state does not and would not aid Chattanooga. The bill capped cities' payback time at 10 years. The city was already planning to pay the money in six years.

Now the issue is in court -- on the taxpayers' dollar -- and Smith still says he's "not interested" in litigation. "When we started to meet, I was hopeful the city would bring a proposal to the table," he said.

The city did bring a proposal. Several, in fact. The most recent was offered just hours after the suit was filed: The city would pay $11.7 million in six years and make current payments going forward. Smith says that's not good enough. It doesn't forgive $1.7 million in stormwater fees. And the school system still wants the Poss Homes property and the North River YMCA pool. So everything is back to square one.

Apparently Rick Smith is not the person city officials should be negotiating with. So, who is that person? Is this just one more example of county officials meddling in school matters for purely political reasons?

Hamilton County parents and taxpayers: Get mad about this lunacy, and make it known. Students -- not attorneys -- need to benefit from a settlement of this matter.