Submitted by Dwight Van de Vate on Tue, 2008/06/10 - 8:18pm.
WBIR.com currently has the best on-line coverage of the DeFreese/Pinkston/Bowers complaint to the District Attorney, including the media release from our office and related attachments. For whatever reason, the News Sentinel has not updated its coverage since this morning.
Dwight Van de Vate
Chief Administrative Officer
Knox County Mayor's Office
Submitted by Anonymously Nine (not verified) on Tue, 2008/06/10 - 11:17pm.
Hasn’t Mike Ragsdale screwed this county up royally? Knox County debt has gone up 87% under Mike Ragsdale with one quarter of that debt interest only. $ 171.73 million dollars of debt in just six and a half years. Almost half of the total County debt was incurred in the past six and a half years.
Dwight Van de Vate said, "As public officials, she (DeFreese) and Commissioner Pinkston should do their homework and gather the facts," Van de Vate wrote. "Certainly Commissioner Pinkston knows the pension bonds were fully authorized by the State Legislature under Public Chapter 131 of the Public Acts of 2007. County Commission approved issuing the bonds, and Commissioner Pinkston himself even voted to issue the bonds."
How hard was it to sell the Commission last summer on the idea not to increase property taxes? Was that a tough sell? Craig Leuthold and Lee Tramel warned Commissioners it was a horrible idea. But Team Ragsdale had the votes. Thanks for adding $40 million dollars of unnecessary debt to the county.
Below is what was on the ballot that people voted for, not what Team Ragsdale sold Commission on. I wish Team Ragsdale would stop blaming others for their own handy work. This is on the Mayor and Team Ragsdale. It is an ousterable offense for the elected official. Now the legal system will make a decision.
COUNTY CHARTER AMENDMENT
QUESTION 4
Question 4: Shall Article VI, Pensions, of the
Knox County Charter be amended by adding a
new section, "Sec. 6.05. Uniformed Officers
Pension Plan," which authorizes and directs
the Knox County Retirement and Pension
Board to establish, maintain and administer as
a plan of the system a separate, tax qualified,
defined benefit pension plan and trust known
and designated as the Uniformed Officers
Pension Plan for sworn officers regularly
employed by the Sheriff's Department, and
which shall be funded on an actuarially sound,
and not necessarily actuarially funded, basis
as of its date of commencement, July 1, 2007,
the Officers Pension being specifically
excepted from the "actuarially funded"
requirement contained in Sections 6.02(C)
and 6.04(E) of the Knox County Charter, and,
provided further that, the Knox County
Retirement System has projected the
unfunded liability for the Pension to be
approximately $57.1 million as of July 1, 2007,
and, in addition, the County's expected
additional annual cost of the Pension has
been projected to be about 5.9% of participant
payroll, or $1.6 million the first year, over and
above the 6% of participant payroll currently
contributed by the County to the existing
defined contribution retirement plan, with the
anticipated property tax impact to be 8 cents
per year, all as more fully set forth in
Ordinance No. 0-06-4-101 of the Commission
of Knox County, Tennessee as duly published
and filed with the Office of the County Clerk of
Knox County, Tennessee?
Submitted by Anonymous (not verified) on Wed, 2008/06/11 - 9:06am.
I've seen your posts on the volume and structure of the county's growing debt here and elsewhere, Nine. I'm sure your numbers have piqued the interest of many readers, as they've piqued mine.
After reading these stats on our volume of debt, though, I realized I lacked quite a bit of information that would allow me to better place them in a meaningful context. For instance, how does Knox County's present "rainy day fund," relative to our total budget, compare to that of other counties? How does our spending per capita compare? What about our income (tax revenue) per capita? In a more specific question about tax revenue, how does our PT rate compare and how many TN counties have already raised their local option ST to the ceiling (Knox hasn't)? Is our present bond rating weaker, stronger, or about the same as for other TN counties?
As to the stats on our debt structure, Cagle's comment (last of Randy's links, above) was that he learned this incidence of the county carrying interest-only debt is not uncommon. Again, don't we need some context as to how other counties have structured their total debt?
Also, on a more subjective point, we really need a clearer understanding of what our debt has purchased, since some purchases are wiser than others. A college student borrowing tuition costs expects a healthy return on investment, for instance. Can we expect one for the county's investment, too?
I'll quote (without permission) from school board member Dan Murphy, who has oftened reminded peers that he's "never heard of a school system cutting its way to greatness." Surely the same holds true for a county?
I'm not disputing your assertion that this debt has grown too quickly, that it's too much, or that it's poorly structured, you understand. I'm just saying I don't feel I have enough information from your post to make that determination. I think we need some "big picture" context on this debt question--from the Mayor's Office, from Commission, or from both.
Submitted by Anonymously Nine (not verified) on Wed, 2008/06/11 - 10:05am.
After reading these stats on our volume of debt, though, I realized I lacked quite a bit of information that would allow me to better place them in a meaningful context. For instance, how does Knox County's present "rainy day fund," relative to our total budget, compare to that of other counties? How does our spending per capita compare?
There is no “rainy day” fund. What you are referring to is the General Fund. Sadly, many members of County Commission also refer erroneously to the General Fund as the “rainy day” fund. It shows how little training there is for Commission members on the budget.
The General Fund has three million dollars less today than it did when Mike Ragsdale first took office. Which is pitiful considering that Mike Ragsdale has served during the greatest financial times in Knox County; the greatest number of housing permits and the opening of the Turkey Creek shopping complex. Our fund balance should have grown by half. Comparing the Knox County General Fund to Hamilton County’s, which is the closest sister county Knox County has, the picture is not good. Hamilton County has much less debt than Knox County and a better General Fund balance. Hamilton County has 70,000 less people than Knox County.
As to the stats on our debt structure, Cagle's comment (last of Randy's links, above) was that he learned this incidence of the county carrying interest-only debt is not uncommon. Again, don't we need some context as to how other counties have structured their total debt?
Once again, the picture isn’t good. Our chief rival for new businesses is Hamilton County and the City of Chattanooga. Per capita debt in Knox County is $1,410 for each resident. In Hamilton County, per capita debt is $649 for each resident.
Where will new businesses locate? Our debt has almost doubled in six and a half short years. This is why it is so difficult to attract new business to Knox County.
Interest only debt should be used only in an emergency. That is not what Team Ragsdale did.
Also, on a more subjective point, we really need a clearer understanding of what our debt has purchased, since some purchases are wiser than others.
As Dwight says, that will be subjective according to the perspective of whom you ask. Most people would question if the Senior Centers, new library branches, and a new school no one wants to go to, were worth $172 million dollars. Where they? Would people re-elect Mike Ragsdale if the election were held today?
Ragsdale had big ideas. Mostly ideas centered on getting him elected to be the next Governor. The taxpayers paid for his ideas. Now there is great “buyers remorse”, and the people are speaking out loud for the first time about the excesses and the performance of Team Ragsdale. The approach of “who are you gonna believe, me or your lying eyes”, has worn thin. People aren’t buying it.
You do raise an important point. County Commission has be a rubber stamp for Mike Ragsdale’s budgets. This year may be different. Does County Commission finally have the courage to confront the County Mayor?
How hard was it to sell the Commission last summer on the idea not to increase property taxes? Was that a tough sell? Craig Leuthold and Lee Tramel warned Commissioners it was a horrible idea. But Team Ragsdale had the votes. Thanks for adding $40 million dollars of unnecessary debt to the county.
So you're for a increase in property taxes?
As for the pension amendment, blame the voters. They passed the stupid thing.
Submitted by Anonymously Nine (not verified) on Wed, 2008/06/11 - 1:38pm.
So you're for a increase in property taxes?
Do you know what a balloon note is? They are not good for business. The tax increase is what was voted on.
As for the pension amendment, blame the voters. They passed the stupid thing.
No, that is wrong. The voters voted for an 8 cent property tax increase. Not a $40 million increase in cost. You are blaming people that had nothing to do with the problem.
You can rest assured, if the people knew that Ragsdale would create a $100 million bond no one would have voted for the pension. That is why there is an ouster suit.
Ok, I'm confused. Would you or would you not have funded the pension fund with a property tax increase? Both Ragsdale and Commission decided not to do so. And BTW, I think that was a mistake.
You can rest assured, if the people knew that Ragsdale would create a $100 million bond no one would have voted for the pension.
To tell the truth, I was shocked that it passed with the 8 cent property tax hike estimate. So who knows what voters would have done?
Submitted by Anonymously Nine (not verified) on Wed, 2008/06/11 - 3:31pm.
Ok, I'm confused. Would you or would you not have funded the pension fund with a property tax increase?
I voted to fund the pension with a 8 cent property tax increase. That was what was on the ballot. I voted for a $57 million dollar pension, not a $100 million dollar expense. Just as with the Wheel Tax, Ragsdale ignored the voters.
I would have voted against the pension had I known it would be bonded.
This to me was the greatest betrayal of the public trust in modern Knox County history. Ragsdale should be removed for this alone.
I would have voted against the pension had I known it would be bonded.
Fair enough. I voted against it, period.
This to me was the greatest betrayal of the public trust in modern Knox County history. Ragsdale should be removed for this alone.
Correct me if I'm wrong, but didn't Commission have to approve this bond issue? Who voted for it? Are all the "yes" votes betrayals of the public trust and should they all be removed also?
Submitted by Anonymously Nine (not verified) on Wed, 2008/06/11 - 6:29pm.
Correct me if I'm wrong, but didn't Commission have to approve this bond issue? Who voted for it? Are all the "yes" votes betrayals of the public trust and should they all be removed also?
Was Commission derelict in their duty? Damn straight. Why did they do want they did?
Tough call.
This Mayor holds a strong trump card. On the key votes it is made very crystal clear what the price of disobedience is. No roads, no parks, no libraries, no senior centers, etc.
We need a new paradigm.
I am very impressed with the "caretaker" class of eight Commissioners. There is a freedom of being a caretaker. No worries about being elected again.
This Mayor has found it difficult to bully the new Commissioners. Davis, Daniels, Briggs, and DeFreese have shown an independence never seen before on County Commission.
Wish we could bottle that.
Last year only two Commissioners challenged the bonding of the Sheriff's Pension. Part of that was lack of knowledge, part of it was being afraid.
Time will tell what happens this year. If today's meeting is any indicator, Ragsdale still has some power to instill fear.
The great equalizer is the press. The weeklies have made a stand, we still await the News Sentinel to stand and deliver.
Last year only two Commissioners challenged the bonding of the Sheriff's Pension.
And they were? I should remember but I don't.
Davis, Daniels, Briggs, and DeFreese have shown an independence never seen before on County Commission.
I dunno. Mark Harmon seems pretty independent, although I suspect you don't care for his particular brand of independence.
As for caretakers, I wouldn't classify Briggs as a caretaker. He's running in August and is a good bet to win.
Frankly, while I'm happy to see "caretakers" asking questions and thinking independently, I think maybe, since they weren't elected and are serving for a short period, they should not be on the front line of proposing the big changes some of them have proposed. IMO some of them should lower their profile.
YMMV.
BTW, if you think DeFreese thinks independently of Pinkston, I've got a bridge to sell you.
Submitted by Dwight Van de Vate on Wed, 2008/06/11 - 5:46am.
completely subjective. I would point out that the complaint doesn't assert whether or not bonding pension fund debt is a good idea, it asserts it was done in violation of the law. The facts clearly demonstrate otherwise.
Dwight Van de Vate
Chief Administrative Officer
Knox County Mayor's Office
Submitted by B Paone (not verified) on Wed, 2008/06/11 - 9:58am.
Mr. Van de Vate:
Not quite certain how welcome I am on this particular website, but what the hell - the worst that can happen is that I get banned, and I don't really frequent the place at any rate. But I digress:
The point you make in regards to the UOPP and the bond issue is, as a technical point, fairly sound. However, it's prudent to note that the request outlines five points, while thus far it seems the Mayor's office has chosen to respond to just the first.
If I may be so bold, what is the response of the Mayor's office to the next four points? The group alleges that the mayor:
• “Showed reckless disregard for his financial stewardship abilities” in regard to the issues unearthed during the P-card audits and by alleged use of his campaign funds to pay personal debts;
• “Evidently precipitated significant personal conflicts of interest,” citing a possible Federal investigation centering on the 10,000 IdleAire Technologies shares Ragsdale purchased in December 2004 – the same month the now-bankrupt company received a $1 million Federal “pass-through” grant that he finalized;
• Had been censured by the Knox County Commission on May 27 for “apparent moral turpitude and general dereliction of duty”;
• Did not “live up to his moral and statutory responsibility as steward of the taxpayers’ money” in apparent violation of Knox County Ordinance O-90-9-122
Also, I'd like to take the opportunity to inform you that Political Knoxville would have reported your end of things as well, but we were apparently not included in your press release list. I realize we're just a small website, but we *were* the first to report this story. :-)
I eagerly await your reply, and am at your disposal to discuss the issue should you so desire.
Submitted by Anonymous (not verified) on Wed, 2008/06/11 - 9:35am.
Cmon, get real. Any DA worth his salt could prove that the current administration has knowingly and willfully ripped off the taxpayers of Knox County. The taxpayers voted for a tax increase to fund the pension, but Mike decided to do the bond and get Knox deeper in debt. Everytime the administration opens their mouth, they look more guilty. I think a true ouster suit would be very effective.
Submitted by Anonymous (not verified) on Wed, 2008/06/11 - 12:11pm.
Paone lives…..It is good to see you posting and it is great to see you making informational remarks exposing the corruption in this administration. I am glad to see you are against corruption in government even though the people voted some of these guys into office. “Just let the people vote” does not always work if there are groups of influential people misguiding the voting populace. (Knox Charter) I will send you a white hat to replace your black one! Nine will definitely have to take back the Van de Vate Jr. remark.
Submitted by Paone (not verified) on Wed, 2008/06/11 - 1:08pm.
...just make the hat Kelly green. It's almost football season. But seriously:
I do have a response to this, but would much prefer not cluttering up Mr. Neal's space here. I can be reached at admin(at)politicalknoxville(dot)com if you would like to discuss the issue.
With that, I go back to patiently waiting for the response of the Mayor's office to Mr. Bowers' above four points. :-)
Submitted by GDrinnen2 on Wed, 2008/06/11 - 2:44pm.
Maybe I misread, but it doesn't look like you actually answered Tamara's questions. I was actually looking forward to those answers because I don't know them either.
What percentage of our budget is the General Fund and how does that compare to Hamilton or any other counties of simliar size? Not trying to put you on the spot, but it sounds like you have been reading up.
"Our chief rival for new businesses is Hamilton County and the City of Chattanooga."
Our debt has almost doubled in six and a half short years. This is why it is so difficult to attract new business to Knox County.
I would disagree with both of these points. Have you actually sat across the table from a business you are recruiting to Knoxille/Knox County? If so, did they actually ask about the debt ratio of the County Government?
Submitted by Tamara Shepherd on Wed, 2008/06/11 - 3:47pm.
I wouldn't have thought Hamilton County was our biggest rival for new business either, Gary, and I would expect new businesses to be more concerned with a county's tax rates than with the volume or structure of its debt...
Just for the record, I didn't support the Sheriff Department's pension plan, whether or not it was to be funded by a PT increase, due to the fact that defined benefit plans have been made virtually obsolete in private industry, since the arrival of less expensive defined contribution plans. I agree with others that funding the more expensive plan through borrowing made for something of a "double whammy."
I realize, though, that 1) the voters, not the mayor, ultimately approved the plan, 2) Commission, not the mayor, ultimately approved its financing, and 3) the recurring expense and the debt associated with the plan comprise just a small part of the total county budget.
Skeptical as I am about the plan and its financing, then, it still doesn't seem reasonable either to pin it all on the mayor or to assume a priori that it has caused our county budget to compare unfavorably to that of other counties. We need to know what shape those other counties are in before we can make that comparison.
(Incidentally, my understanding of the ballot text indicating a potential 8 cent PT hike to fund the plan was that this was one possible financing option only. I don't see in the wording any indication that the PT tax increase would automatically follow passage of the plan.)
Submitted by Anonymous (not verified) on Wed, 2008/06/11 - 4:06pm.
If you guys are looking for the debt in relation to a percentage number you are not being realistic. You have to look at the debt per citizen. If you were qualifying for a home loan they would do a debt to income ratio. Knox County could have qualified for a home loan before this administration but now the debt ratio stinks. Bonding the pension plan for the sheriffs’ office the way it was done is going to leave a legacy of debt that will haunt Knox County for years. The overall expense after interest will be a hard pill for all of us citizens to swallow. Ragsdale does not care…..he will be gone.
Submitted by B Paone (not verified) on Thu, 2008/06/12 - 6:29am.
I'm not entirely sure Knox County is interested in a car production facility. As depicted in this April 2008 article, it appears Knox County can reap benefits from a nearby vehicle plant without having to deal with the pollution and infrastructure. Here's the link:
A poster on that link also raises a good point about flat land - it's not terribly abundant around here, and a vehicle plant tends to take up a lot of it.
It also seems like Toyota was considering locations further south from the start, as well as locations that had a more strategic logistical position than Knox County currently offers:
It points out that the Marion site "has access to two interstate highways, two rail lines and the Mississippi River, and is just minutes away from a major airport at Memphis." These are amenities Knoxville doesn't offer.
(NOTE: It should be pointed out that, in the end, neither Marion nor Chattanooga nor Knoxville got the plant. Tupelo, MS got it:
...and it's an SUV plant. With gas prices the way they are, it's susceptible to production cutbacks or even closing. It also looks like Toyota got nearly $300 million in incentives to locate there. That's pretty damn pricey.)
Besides, it doesn't seem that heavy manufacturing fits in terribly well with our local economy - car plants take up a lot of space, and there's not a whole lot one can do with them if they shut down or scale back.
So, while I guess the best way to answer the question would be to ask Napier or Edwards, I can't find anything that says Knox County is interested in acquiring such a facility in the first place.
But anyway, I digress. I came looking for answers to my questions, and I see I walk away empty-handed. C'est la vie.
A major Blount County development is headed out for bid next week. Retails, residential, and research facilities are all in mind for the project.
The Alcoa City Manager presented plans to the Blount County Chamber for the future Pellissippi Place development.
It would be a 470-acre technical park at the intersection of Pellissippi Parkway and Old Knoxville Highway, in the area once known as the Luther Jackson farm.
Pellissippi Place would have shopping space, up to six restaurants, and a movie theater, along with a man-made river and a riverwalk. The river would re-use water and include recycled materials.
Submitted by Anonymously Nine (not verified) on Wed, 2008/06/11 - 4:17pm.
Maybe I misread, but it doesn't look like you actually answered Tamara's questions. I was actually looking forward to those answers because I don't know them either.
There are specific answers to Tamara's questions, what help do you need?
You desire statistics? Isn't per capita debt a more accurate measure than "percentage of the budget to the General Fund"? What could possibly be a better measure of debt than per capita debt?
In answer to your question about business recruiting, there are software programs used to locate businesses. We often don't get the opportunity to have a face-to-face meeting because our ratios are pathetic compared to Hamilton County, Blount County, Loudon County, and Roane County. You don’t really think that locating a business is done over dinner do you? If you think that bringing business to Knox County is accomplished by charming people over a nice dinner at Regas you don’t understand the mechanics.
It is a multi-variable equation that factors many costs and intangibles. Public Debt, property taxes, sales taxes, local income taxes, state income taxes, schools, road infrastructure, telecommunications, workforce, crime statistics, bankruptcy numbers, pollution figures, number of hospitals, age and socio-economic factors are all taken into consideration.
The simple fact is that business recruiting has been less successful than convention recruiting in Knox County. And the Knoxville Convention Center is far away from an economic breakeven.
No responsible Chief Financial Officer would ever bond a pension the way Mike Ragsdale did. Some will say as long as we have AA rated bonds we are in high cotton. Creating a balloon note for the next Mayor is exactly how to reduce a bond rating. From that point, it is a spiral.
Perhaps you should read the News Sentinel column where Dr. Bill Fox answered questions similar to these? You may feel more comfortable. I doubt I have any contribution you would find meaningful.
Submitted by GDrinnen2 on Wed, 2008/06/11 - 5:00pm.
"Public Debt, property taxes, sales taxes, local income taxes, state income taxes, schools, road infrastructure, telecommunications, workforce, crime statistics, bankruptcy numbers, pollution figures, number of hospitals, age and socio-economic factors are all taken into consideration."
I have been a part of business recruiting. To a limited extent for sure, but I have had the benefit of first hand conversations with businesses we were actively trying to recruit. By the time I was part of the discussions, decisions to look at Knoxville had already been made. We always had a signifigant financial interest in seeing them move to Knoxville, so when a business decided elsewhere we made sure to find out why.
They always asked pointed questions about each of the issues you listed above. . . with the exception of public debt. I have never in my life heard of, or seen, a company looking at public debt as a factor in where to locate their operations.
Maybe there is someone out there with actual meaningful experience who could answer this.
Submitted by Anonymously Nine (not verified) on Sun, 2008/06/15 - 1:10pm.
They always asked pointed questions about each of the issues you listed above. . . with the exception of public debt. I have never in my life heard of, or seen, a company looking at public debt as a factor in where to locate their operations.
By your own admission, "I have been a part of business recruiting. To a limited extent for sure, but I have had the benefit of first hand conversations with businesses we were actively trying to recruit. By the time I was part of the discussions, decisions to look at Knoxville had already been made".
You show the extent of your understanding of business recruiting with these two statements.
That was a rather Van de Vateian statement from you. You first admit you are not an expert on "business recruiting" then you make an expert statement.
Submitted by Anonymous (not verified) on Sun, 2008/06/15 - 12:47pm.
,,,the biggest rip off in county government is not the mayors staff,,its employees thru out,come to work do the least you can do,go home,,,,and have cheese with your whine
Submitted by Anonymously Nine (not verified) on Thu, 2008/06/19 - 5:23pm.
Mr. Drinnen, I just heard you on the six o'clock news.
You said, "The structure of our government has been exactly the same here in Knox County since 1790. We've not made any changes to account for any efficiencies or to help in any moving into the future".
Aw, did you write that yourself Mr. History Lesson?
You may have forgotten Mr. History Lesson that the old form of Knox County government was the County Court and that changed in 1982 with the current County Commission. You may also have forgotten our County Charter of 1990 which created a modern home rule county. Only two home rule Charter's exist in Tennessee. Sounds pretty modern doesn't it?
Good grief, that is unbelievable. You really have no idea do you? I know it is not technically lying if you really don't know what happened. But your story is just pure punk.
Please get your facts right before you go out and tell people stuff like that. That is so disingenuous. This is exactly why so many people have so little regard for your group. You really will say anything.
WBIR.com currently has the best on-line coverage of the DeFreese/Pinkston/Bowers complaint to the District Attorney, including the media release from our office and related attachments. For whatever reason, the News Sentinel has not updated its coverage since this morning.
Dwight Van de Vate
Chief Administrative Officer
Knox County Mayor's Office
They've been waiting on you to send in your copy, Dwight. Ha!
Larry Van Guilder
Hasn’t Mike Ragsdale screwed this county up royally? Knox County debt has gone up 87% under Mike Ragsdale with one quarter of that debt interest only. $ 171.73 million dollars of debt in just six and a half years. Almost half of the total County debt was incurred in the past six and a half years.
Dwight Van de Vate said, "As public officials, she (DeFreese) and Commissioner Pinkston should do their homework and gather the facts," Van de Vate wrote. "Certainly Commissioner Pinkston knows the pension bonds were fully authorized by the State Legislature under Public Chapter 131 of the Public Acts of 2007. County Commission approved issuing the bonds, and Commissioner Pinkston himself even voted to issue the bonds."
How hard was it to sell the Commission last summer on the idea not to increase property taxes? Was that a tough sell? Craig Leuthold and Lee Tramel warned Commissioners it was a horrible idea. But Team Ragsdale had the votes. Thanks for adding $40 million dollars of unnecessary debt to the county.
Below is what was on the ballot that people voted for, not what Team Ragsdale sold Commission on. I wish Team Ragsdale would stop blaming others for their own handy work. This is on the Mayor and Team Ragsdale. It is an ousterable offense for the elected official. Now the legal system will make a decision.
The Sheriff's Pension Plan Ballot question:
Link...
COUNTY CHARTER AMENDMENT
QUESTION 4
Question 4: Shall Article VI, Pensions, of the
Knox County Charter be amended by adding a
new section, "Sec. 6.05. Uniformed Officers
Pension Plan," which authorizes and directs
the Knox County Retirement and Pension
Board to establish, maintain and administer as
a plan of the system a separate, tax qualified,
defined benefit pension plan and trust known
and designated as the Uniformed Officers
Pension Plan for sworn officers regularly
employed by the Sheriff's Department, and
which shall be funded on an actuarially sound,
and not necessarily actuarially funded, basis
as of its date of commencement, July 1, 2007,
the Officers Pension being specifically
excepted from the "actuarially funded"
requirement contained in Sections 6.02(C)
and 6.04(E) of the Knox County Charter, and,
provided further that, the Knox County
Retirement System has projected the
unfunded liability for the Pension to be
approximately $57.1 million as of July 1, 2007,
and, in addition, the County's expected
additional annual cost of the Pension has
been projected to be about 5.9% of participant
payroll, or $1.6 million the first year, over and
above the 6% of participant payroll currently
contributed by the County to the existing
defined contribution retirement plan, with the
anticipated property tax impact to be 8 cents
per year, all as more fully set forth in
Ordinance No. 0-06-4-101 of the Commission
of Knox County, Tennessee as duly published
and filed with the Office of the County Clerk of
Knox County, Tennessee?
Yes
No
I've seen your posts on the volume and structure of the county's growing debt here and elsewhere, Nine. I'm sure your numbers have piqued the interest of many readers, as they've piqued mine.
After reading these stats on our volume of debt, though, I realized I lacked quite a bit of information that would allow me to better place them in a meaningful context. For instance, how does Knox County's present "rainy day fund," relative to our total budget, compare to that of other counties? How does our spending per capita compare? What about our income (tax revenue) per capita? In a more specific question about tax revenue, how does our PT rate compare and how many TN counties have already raised their local option ST to the ceiling (Knox hasn't)? Is our present bond rating weaker, stronger, or about the same as for other TN counties?
As to the stats on our debt structure, Cagle's comment (last of Randy's links, above) was that he learned this incidence of the county carrying interest-only debt is not uncommon. Again, don't we need some context as to how other counties have structured their total debt?
Also, on a more subjective point, we really need a clearer understanding of what our debt has purchased, since some purchases are wiser than others. A college student borrowing tuition costs expects a healthy return on investment, for instance. Can we expect one for the county's investment, too?
I'll quote (without permission) from school board member Dan Murphy, who has oftened reminded peers that he's "never heard of a school system cutting its way to greatness." Surely the same holds true for a county?
I'm not disputing your assertion that this debt has grown too quickly, that it's too much, or that it's poorly structured, you understand. I'm just saying I don't feel I have enough information from your post to make that determination. I think we need some "big picture" context on this debt question--from the Mayor's Office, from Commission, or from both.
(Oops--sorry, the above post to Nine was mine. I wasn't logged on, so it appeared anonymously.)
After reading these stats on our volume of debt, though, I realized I lacked quite a bit of information that would allow me to better place them in a meaningful context. For instance, how does Knox County's present "rainy day fund," relative to our total budget, compare to that of other counties? How does our spending per capita compare?
There is no “rainy day” fund. What you are referring to is the General Fund. Sadly, many members of County Commission also refer erroneously to the General Fund as the “rainy day” fund. It shows how little training there is for Commission members on the budget.
The General Fund has three million dollars less today than it did when Mike Ragsdale first took office. Which is pitiful considering that Mike Ragsdale has served during the greatest financial times in Knox County; the greatest number of housing permits and the opening of the Turkey Creek shopping complex. Our fund balance should have grown by half. Comparing the Knox County General Fund to Hamilton County’s, which is the closest sister county Knox County has, the picture is not good. Hamilton County has much less debt than Knox County and a better General Fund balance. Hamilton County has 70,000 less people than Knox County.
As to the stats on our debt structure, Cagle's comment (last of Randy's links, above) was that he learned this incidence of the county carrying interest-only debt is not uncommon. Again, don't we need some context as to how other counties have structured their total debt?
Once again, the picture isn’t good. Our chief rival for new businesses is Hamilton County and the City of Chattanooga. Per capita debt in Knox County is $1,410 for each resident. In Hamilton County, per capita debt is $649 for each resident.
Where will new businesses locate? Our debt has almost doubled in six and a half short years. This is why it is so difficult to attract new business to Knox County.
Interest only debt should be used only in an emergency. That is not what Team Ragsdale did.
Also, on a more subjective point, we really need a clearer understanding of what our debt has purchased, since some purchases are wiser than others.
As Dwight says, that will be subjective according to the perspective of whom you ask. Most people would question if the Senior Centers, new library branches, and a new school no one wants to go to, were worth $172 million dollars. Where they? Would people re-elect Mike Ragsdale if the election were held today?
Ragsdale had big ideas. Mostly ideas centered on getting him elected to be the next Governor. The taxpayers paid for his ideas. Now there is great “buyers remorse”, and the people are speaking out loud for the first time about the excesses and the performance of Team Ragsdale. The approach of “who are you gonna believe, me or your lying eyes”, has worn thin. People aren’t buying it.
You do raise an important point. County Commission has be a rubber stamp for Mike Ragsdale’s budgets. This year may be different. Does County Commission finally have the courage to confront the County Mayor?
We will soon see.
How hard was it to sell the Commission last summer on the idea not to increase property taxes? Was that a tough sell? Craig Leuthold and Lee Tramel warned Commissioners it was a horrible idea. But Team Ragsdale had the votes. Thanks for adding $40 million dollars of unnecessary debt to the county.
So you're for a increase in property taxes?
As for the pension amendment, blame the voters. They passed the stupid thing.
So you're for a increase in property taxes?
Do you know what a balloon note is? They are not good for business. The tax increase is what was voted on.
As for the pension amendment, blame the voters. They passed the stupid thing.
No, that is wrong. The voters voted for an 8 cent property tax increase. Not a $40 million increase in cost. You are blaming people that had nothing to do with the problem.
You can rest assured, if the people knew that Ragsdale would create a $100 million bond no one would have voted for the pension. That is why there is an ouster suit.
This County cannot afford Mike Ragsdale.
Ok, I'm confused. Would you or would you not have funded the pension fund with a property tax increase? Both Ragsdale and Commission decided not to do so. And BTW, I think that was a mistake.
You can rest assured, if the people knew that Ragsdale would create a $100 million bond no one would have voted for the pension.
To tell the truth, I was shocked that it passed with the 8 cent property tax hike estimate. So who knows what voters would have done?
Ok, I'm confused. Would you or would you not have funded the pension fund with a property tax increase?
I voted to fund the pension with a 8 cent property tax increase. That was what was on the ballot. I voted for a $57 million dollar pension, not a $100 million dollar expense. Just as with the Wheel Tax, Ragsdale ignored the voters.
I would have voted against the pension had I known it would be bonded.
This to me was the greatest betrayal of the public trust in modern Knox County history. Ragsdale should be removed for this alone.
I would have voted against the pension had I known it would be bonded.
Fair enough. I voted against it, period.
This to me was the greatest betrayal of the public trust in modern Knox County history. Ragsdale should be removed for this alone.
Correct me if I'm wrong, but didn't Commission have to approve this bond issue? Who voted for it? Are all the "yes" votes betrayals of the public trust and should they all be removed also?
Just wondering.
Correct me if I'm wrong, but didn't Commission have to approve this bond issue? Who voted for it? Are all the "yes" votes betrayals of the public trust and should they all be removed also?
Was Commission derelict in their duty? Damn straight. Why did they do want they did?
Tough call.
This Mayor holds a strong trump card. On the key votes it is made very crystal clear what the price of disobedience is. No roads, no parks, no libraries, no senior centers, etc.
We need a new paradigm.
I am very impressed with the "caretaker" class of eight Commissioners. There is a freedom of being a caretaker. No worries about being elected again.
This Mayor has found it difficult to bully the new Commissioners. Davis, Daniels, Briggs, and DeFreese have shown an independence never seen before on County Commission.
Wish we could bottle that.
Last year only two Commissioners challenged the bonding of the Sheriff's Pension. Part of that was lack of knowledge, part of it was being afraid.
Time will tell what happens this year. If today's meeting is any indicator, Ragsdale still has some power to instill fear.
The great equalizer is the press. The weeklies have made a stand, we still await the News Sentinel to stand and deliver.
Last year only two Commissioners challenged the bonding of the Sheriff's Pension.
And they were? I should remember but I don't.
Davis, Daniels, Briggs, and DeFreese have shown an independence never seen before on County Commission.
I dunno. Mark Harmon seems pretty independent, although I suspect you don't care for his particular brand of independence.
As for caretakers, I wouldn't classify Briggs as a caretaker. He's running in August and is a good bet to win.
Frankly, while I'm happy to see "caretakers" asking questions and thinking independently, I think maybe, since they weren't elected and are serving for a short period, they should not be on the front line of proposing the big changes some of them have proposed. IMO some of them should lower their profile.
YMMV.
BTW, if you think DeFreese thinks independently of Pinkston, I've got a bridge to sell you.
completely subjective. I would point out that the complaint doesn't assert whether or not bonding pension fund debt is a good idea, it asserts it was done in violation of the law. The facts clearly demonstrate otherwise.
Dwight Van de Vate
Chief Administrative Officer
Knox County Mayor's Office
Mr. Van de Vate:
Not quite certain how welcome I am on this particular website, but what the hell - the worst that can happen is that I get banned, and I don't really frequent the place at any rate. But I digress:
The point you make in regards to the UOPP and the bond issue is, as a technical point, fairly sound. However, it's prudent to note that the request outlines five points, while thus far it seems the Mayor's office has chosen to respond to just the first.
If I may be so bold, what is the response of the Mayor's office to the next four points? The group alleges that the mayor:
• “Showed reckless disregard for his financial stewardship abilities” in regard to the issues unearthed during the P-card audits and by alleged use of his campaign funds to pay personal debts;
• “Evidently precipitated significant personal conflicts of interest,” citing a possible Federal investigation centering on the 10,000 IdleAire Technologies shares Ragsdale purchased in December 2004 – the same month the now-bankrupt company received a $1 million Federal “pass-through” grant that he finalized;
• Had been censured by the Knox County Commission on May 27 for “apparent moral turpitude and general dereliction of duty”;
• Did not “live up to his moral and statutory responsibility as steward of the taxpayers’ money” in apparent violation of Knox County Ordinance O-90-9-122
Also, I'd like to take the opportunity to inform you that Political Knoxville would have reported your end of things as well, but we were apparently not included in your press release list. I realize we're just a small website, but we *were* the first to report this story. :-)
I eagerly await your reply, and am at your disposal to discuss the issue should you so desire.
-Brian Paone
Cmon, get real. Any DA worth his salt could prove that the current administration has knowingly and willfully ripped off the taxpayers of Knox County. The taxpayers voted for a tax increase to fund the pension, but Mike decided to do the bond and get Knox deeper in debt. Everytime the administration opens their mouth, they look more guilty. I think a true ouster suit would be very effective.
Paone lives…..It is good to see you posting and it is great to see you making informational remarks exposing the corruption in this administration. I am glad to see you are against corruption in government even though the people voted some of these guys into office. “Just let the people vote” does not always work if there are groups of influential people misguiding the voting populace. (Knox Charter) I will send you a white hat to replace your black one! Nine will definitely have to take back the Van de Vate Jr. remark.
...just make the hat Kelly green. It's almost football season. But seriously:
I do have a response to this, but would much prefer not cluttering up Mr. Neal's space here. I can be reached at admin(at)politicalknoxville(dot)com if you would like to discuss the issue.
With that, I go back to patiently waiting for the response of the Mayor's office to Mr. Bowers' above four points. :-)
Maybe I misread, but it doesn't look like you actually answered Tamara's questions. I was actually looking forward to those answers because I don't know them either.
What percentage of our budget is the General Fund and how does that compare to Hamilton or any other counties of simliar size? Not trying to put you on the spot, but it sounds like you have been reading up.
"Our chief rival for new businesses is Hamilton County and the City of Chattanooga."
Our debt has almost doubled in six and a half short years. This is why it is so difficult to attract new business to Knox County.
I would disagree with both of these points. Have you actually sat across the table from a business you are recruiting to Knoxille/Knox County? If so, did they actually ask about the debt ratio of the County Government?
I wouldn't have thought Hamilton County was our biggest rival for new business either, Gary, and I would expect new businesses to be more concerned with a county's tax rates than with the volume or structure of its debt...
Just for the record, I didn't support the Sheriff Department's pension plan, whether or not it was to be funded by a PT increase, due to the fact that defined benefit plans have been made virtually obsolete in private industry, since the arrival of less expensive defined contribution plans. I agree with others that funding the more expensive plan through borrowing made for something of a "double whammy."
I realize, though, that 1) the voters, not the mayor, ultimately approved the plan, 2) Commission, not the mayor, ultimately approved its financing, and 3) the recurring expense and the debt associated with the plan comprise just a small part of the total county budget.
Skeptical as I am about the plan and its financing, then, it still doesn't seem reasonable either to pin it all on the mayor or to assume a priori that it has caused our county budget to compare unfavorably to that of other counties. We need to know what shape those other counties are in before we can make that comparison.
(Incidentally, my understanding of the ballot text indicating a potential 8 cent PT hike to fund the plan was that this was one possible financing option only. I don't see in the wording any indication that the PT tax increase would automatically follow passage of the plan.)
If you guys are looking for the debt in relation to a percentage number you are not being realistic. You have to look at the debt per citizen. If you were qualifying for a home loan they would do a debt to income ratio. Knox County could have qualified for a home loan before this administration but now the debt ratio stinks. Bonding the pension plan for the sheriffs’ office the way it was done is going to leave a legacy of debt that will haunt Knox County for years. The overall expense after interest will be a hard pill for all of us citizens to swallow. Ragsdale does not care…..he will be gone.
I wouldn't have thought Hamilton County was our biggest rival for new business either
Chattanooga was a finalist for the new Toyota plant. Knoxville wasn't in the running. Wasn't even near being in the running.
Link...
Did Knox County actively try to recruit this plant? If yes, then Chattanooga beat us out. If not, apples, oranges.
Did Knox County actively try to recruit this plant?
Well, Mike Edwards? et al?
I'm not entirely sure Knox County is interested in a car production facility. As depicted in this April 2008 article, it appears Knox County can reap benefits from a nearby vehicle plant without having to deal with the pollution and infrastructure. Here's the link:
Link...
A poster on that link also raises a good point about flat land - it's not terribly abundant around here, and a vehicle plant tends to take up a lot of it.
It also seems like Toyota was considering locations further south from the start, as well as locations that had a more strategic logistical position than Knox County currently offers:
Link...
It points out that the Marion site "has access to two interstate highways, two rail lines and the Mississippi River, and is just minutes away from a major airport at Memphis." These are amenities Knoxville doesn't offer.
(NOTE: It should be pointed out that, in the end, neither Marion nor Chattanooga nor Knoxville got the plant. Tupelo, MS got it:
Link...
...and it's an SUV plant. With gas prices the way they are, it's susceptible to production cutbacks or even closing. It also looks like Toyota got nearly $300 million in incentives to locate there. That's pretty damn pricey.)
Besides, it doesn't seem that heavy manufacturing fits in terribly well with our local economy - car plants take up a lot of space, and there's not a whole lot one can do with them if they shut down or scale back.
So, while I guess the best way to answer the question would be to ask Napier or Edwards, I can't find anything that says Knox County is interested in acquiring such a facility in the first place.
But anyway, I digress. I came looking for answers to my questions, and I see I walk away empty-handed. C'est la vie.
An SUV plant looks a bit 'iffy'
Link...
You may want to listen to Randy Nichols on the Hallerin Hill show now, discussing the ouster petition filed with his office yesterday.
Seems these folks weren't interested in Knox County.
So they move right next door.
Link...
A major Blount County development is headed out for bid next week. Retails, residential, and research facilities are all in mind for the project.
The Alcoa City Manager presented plans to the Blount County Chamber for the future Pellissippi Place development.
It would be a 470-acre technical park at the intersection of Pellissippi Parkway and Old Knoxville Highway, in the area once known as the Luther Jackson farm.
Pellissippi Place would have shopping space, up to six restaurants, and a movie theater, along with a man-made river and a riverwalk. The river would re-use water and include recycled materials.
A major Blount County development
Knox Co. put up $5 million for that deal. Thanks, y'all!
Knox Co. put up $5 million for that deal. Thanks, y'all!
You are welcome. We are kind, charitable, and rather stupid.
Maybe I misread, but it doesn't look like you actually answered Tamara's questions. I was actually looking forward to those answers because I don't know them either.
There are specific answers to Tamara's questions, what help do you need?
You desire statistics? Isn't per capita debt a more accurate measure than "percentage of the budget to the General Fund"? What could possibly be a better measure of debt than per capita debt?
In answer to your question about business recruiting, there are software programs used to locate businesses. We often don't get the opportunity to have a face-to-face meeting because our ratios are pathetic compared to Hamilton County, Blount County, Loudon County, and Roane County. You don’t really think that locating a business is done over dinner do you? If you think that bringing business to Knox County is accomplished by charming people over a nice dinner at Regas you don’t understand the mechanics.
It is a multi-variable equation that factors many costs and intangibles. Public Debt, property taxes, sales taxes, local income taxes, state income taxes, schools, road infrastructure, telecommunications, workforce, crime statistics, bankruptcy numbers, pollution figures, number of hospitals, age and socio-economic factors are all taken into consideration.
The simple fact is that business recruiting has been less successful than convention recruiting in Knox County. And the Knoxville Convention Center is far away from an economic breakeven.
No responsible Chief Financial Officer would ever bond a pension the way Mike Ragsdale did. Some will say as long as we have AA rated bonds we are in high cotton. Creating a balloon note for the next Mayor is exactly how to reduce a bond rating. From that point, it is a spiral.
Perhaps you should read the News Sentinel column where Dr. Bill Fox answered questions similar to these? You may feel more comfortable. I doubt I have any contribution you would find meaningful.
"Public Debt, property taxes, sales taxes, local income taxes, state income taxes, schools, road infrastructure, telecommunications, workforce, crime statistics, bankruptcy numbers, pollution figures, number of hospitals, age and socio-economic factors are all taken into consideration."
I have been a part of business recruiting. To a limited extent for sure, but I have had the benefit of first hand conversations with businesses we were actively trying to recruit. By the time I was part of the discussions, decisions to look at Knoxville had already been made. We always had a signifigant financial interest in seeing them move to Knoxville, so when a business decided elsewhere we made sure to find out why.
They always asked pointed questions about each of the issues you listed above. . . with the exception of public debt. I have never in my life heard of, or seen, a company looking at public debt as a factor in where to locate their operations.
Maybe there is someone out there with actual meaningful experience who could answer this.
They always asked pointed questions about each of the issues you listed above. . . with the exception of public debt. I have never in my life heard of, or seen, a company looking at public debt as a factor in where to locate their operations.
By your own admission, "I have been a part of business recruiting. To a limited extent for sure, but I have had the benefit of first hand conversations with businesses we were actively trying to recruit. By the time I was part of the discussions, decisions to look at Knoxville had already been made".
You show the extent of your understanding of business recruiting with these two statements.
That was a rather Van de Vateian statement from you. You first admit you are not an expert on "business recruiting" then you make an expert statement.
Nice strawman.
,,,the biggest rip off in county government is not the mayors staff,,its employees thru out,come to work do the least you can do,go home,,,,and have cheese with your whine
Not surprisingly, you've demonstrated that you understand the concept of a straw man about as well as you understand business recruitment.
Mr. Drinnen, I just heard you on the six o'clock news.
You said, "The structure of our government has been exactly the same here in Knox County since 1790. We've not made any changes to account for any efficiencies or to help in any moving into the future".
Aw, did you write that yourself Mr. History Lesson?
You may have forgotten Mr. History Lesson that the old form of Knox County government was the County Court and that changed in 1982 with the current County Commission. You may also have forgotten our County Charter of 1990 which created a modern home rule county. Only two home rule Charter's exist in Tennessee. Sounds pretty modern doesn't it?
Good grief, that is unbelievable. You really have no idea do you? I know it is not technically lying if you really don't know what happened. But your story is just pure punk.
Please get your facts right before you go out and tell people stuff like that. That is so disingenuous. This is exactly why so many people have so little regard for your group. You really will say anything.
YouTube to follow.
Jamie Woodson cut him loose for a reason. The bubble bee shirt was interesting.
Check out what Knox Accountability really means:
Link...
Not very accountable are they?
Would it be possible for you, just once, to post something positive instead of something that slams somebody (or multiple somebodies)?
(crickets chirping)
That's what I thought.
As far as hokey revisionist PR hacks go, I think Gary holds his own.
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