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Town Bills County Almost $3M

The Town of Greeneville has submitted an invoice for nearly $3 million to the Greene County government, seeking what it contends is its proportional share of financing initially secured for Greene County Schools.

An invoice for about $2.84 million was submitted to the Greene County Mayor’s Office on Monday, City Administrator Todd Smith said.

That amount is based on the current outstanding Greene County Schools debt service, $8.8 million, multiplied by Greeneville City Schools’ average student daily attendance percentage of .323, Smith said.

City officials say the funds are owed as a result of the Greene County Commission’s June 17 decision to equalize property tax rates for landowners both inside and outside town limits, which became effective Monday.

“Essentially when city taxpayers fund the county school debt, then the city school system receives a proportional share of that county school debt,” Smith said, referring to state statutes.

The invoice seeks payment by Aug. 1, and asks that all checks be made payable to Greeneville City Schools.

Greene County Mayor Kevin Morrison said officials are seeking advice from the state and legal experts in response.

“We are giving it its due consideration and checking with the comptroller, CTAS (University of Tennessee County Technical Assistance Service) and other legal advisors to insure we have proceeded correctly, which we think we have,” Morrison said.

The town’s invoice follows the Greene County Commission’s June action approving a single property tax rate of $2.0145 per $100 off assessed value for landowners both inside and outside Greeneville corporate limits.

The commission’s June 17 decision was split by a vote of 12 in favor and 9 against. Equal “inside” and “outside” rates have not been levied locally in at least four decades.

With the single tax rate, Greene County’s property tax rate for Greeneville property owners will increase about 16 cents from last year. Those outside corporate limits will not see an increase, as the “outside” for the previous fiscal year was $2.0145.

The rationale for the two rates, historically, was that since the town had its own school system, Greeneville property owners should not be taxed for county schools’ capital projects.

As debt for the county school system has been paid, the tax rate has been increased incrementally over the years for Greeneville property owners to reflect retirement of the bonds. However, the single rate was proposed instead of incrementally increasing the property tax until the debt is completely retired in 2026.

According to documents that are part of county’s 2018 audit by the State Comptroller’s Office, there are two rural school bonds being paid through the county’s education debt service — one retires in 2020 and one in 2026.

In the county’s 2019-20 budget, the county debt service is designated to be paid through a portion of the local option sales tax rather than from property tax.


With the increase of the county property tax levied on town landowners, Greeneville officials contend that the city school system should receive its share of the county’s school debt service based on state law and past court rulings.

In addition to the invoice, the town provided the county information about a 1977 Tennessee Supreme Court ruling in a lawsuit regarding county school debt funding and a State Attorney General opinion citing that case.

In the 1977 lawsuit, the City of Harriman brought action against Roane County to receive public funds for its school system. As part of that case, the Supreme Court ruled that sales tax revenue appropriated to pay debt or operations of a county school system should be shared with a municipal or special school district within that county.

County officials have said that state law has conflicting sections. Prior to the commission’s vote on the budget and tax rates in June, the county sought CTAS’ advice and was told that they could use the sales tax revenue for the education debt, officials said.

Two sections of state law address bonds for school projects. One section states that proceeds from sales of bonds by a county are to be shared with any municipal or special district school system within its limits, based on student average daily attendance — the basis for calculations on the invoice the Town of Greeneville submitted to the county on Monday.

However, state law also provides a condition for not sharing the revenue — “proceeds of any bonds or notes issued for school capital outlay purposes shall not be required to be shared” if a governmental entity elects to pay for such bonds or notes according to an applicable provision of another section of state law that governs the payment of bonds.

That section of state law provides provides the authority for the county to do what it has in the past — levy an amount of the property tax on landowners outside the Greeneville corporate limits only for the county school system’s education debt service payments.

It also gives authority for education debt to be paid by sales tax. The section states that the county legislative body that has has levied property tax on landowners outside a municipality operating its own schools “is further authorized in addition to the levy of taxes for the payment of principal and interest on the bonds, to pledge and use for such purpose the proceeds of the county’s share of the state sales tax.”

Local Laws Vary On Fireworks

Fireworks are a traditional part of Fourth of July celebrations, whether large community displays or sparklers in backyard family gatherings. Safe displays are allowed on the Fourth in both Greeneville and Greene County, but not within the City of Tusculum.

A change in the Greeneville’s Municipal Code in 2018 allowed fireworks inside town limits from 4 p.m. on the Fourth of July to 1 a.m. on July 5. The code also denotes that fireworks may not endanger the safety of individuals or damage property.

In Greene County, there are no specific regulations regarding fireworks. As long as the fireworks are not endangering others or property, there are no restrictions on fireworks use, Greene County Sheriff Wesley Holt said, while serving as captain of the department, last year.

The Tusculum Police Department intends to enforce the city’s ban on fireworks on the holiday.

“The ban prohibits the sale, possession and use of all consumer fireworks in an effort to eliminate fires, injuries and fireworks-related complaints,” a recent TPD news release said.

The ban includes the use of sparklers. It can be accompanied by a fine of over $128, and fireworks can be confiscated.

The City of Tusculum borders Greeneville, where fireworks are legal to use and sell.

“Sometimes fireworks can be heard or seen from inside the city limits” and the public is encouraged to keep pets secured inside the house over the holiday “since loud noises can cause your pet to stray,” the TPD release said.

City officials urge ensuring that pets have a form of identification. Those with lost pets can contact Greene County Animal Control at 423-798-1777.

Ballad Health Responds To New Filings In Antitrust Lawsuit

Plaintiffs in an antitrust lawsuit claiming a conflict of interest between the governing boards of Ballad Health and East Tennessee Physicians and Associates filed a response Friday to a Ballad Health motion to dismiss the civil action.

In response, Ballad Health Monday filed a motion to strike 243 “overlength” pages of exhibits filed Friday by Greeneville lawyer Frank Santore Jr. on behalf of citizen plaintiffs.

The case is pending in U.S. District Court. The lawsuit filed April 12 in Greeneville alleges that a conflict of interest between the governing boards could be detrimental to health care market competition.

Ballad Health filed the motion to dismiss in June.


In his response to the motion to dismiss, Santore wrote that Ballad Health’s reliance on a section in the Federal Rules of Civil Procedure governing the lack of subject matter jurisdiction “is not well-taken.”

Plaintiffs, Santore wrote, “have more than adequately plead the requisites of the Clayton Act” showing that Ballad Health’s motion “is not well-taken.”

The Clayton Antitrust Act was passed in 1914 to regulate U.S. business practices. The legislation prohibits anti-competitive mergers, predatory and discriminatory pricing, and other types of unethical corporate behavior.

In its motion to dismiss, Ballad Health cites legal grounds on several points in asking the court to dismiss the case. The motion states that plaintiffs “lack standing to bring their claims in federal court and plaintiffs fail to state claims upon which relief may be granted.”

Plaintiffs “have failed to allege a case or controversy,” the motion to dismiss states. The U.S. Constitution requires dismissal of the complaint under a rule governing “lack of subject matter jurisdiction,” the motion states.

The motion also states the lawsuit should be dismissed “for failing to state a claim for which relief can be granted because plaintiffs have failed to allege antitrust injury and failed to plead the requisite elements of (one section) of the Clayton Act.”

Ballad Health has immunity under the federal antitrust laws, according to the motion to dismiss.

Santore responded in the filing Friday that Ballad Health “has no immunity under either federal antitrust law or by the state-action immunity doctrine” and “may not rely upon this ground for dismissal of this lawsuit.”

In its filing Monday requesting the court strike all the exhibits by Santore, Ballad Health claims they “are not properly part of the pleadings in this case.”

Ballad Health requests a seven-day extension from the court to file a reply in support of the motion to dismiss.

In its expedited motion, Ballad Health and co-defendants who are members of the healthcare system board of directors reiterate that the civil complaint “lacked basic pleading requirements of (the Clayton Act) statute.”

The complaint filed by Santore “is starkly devoid — not just deficient — of the allegations needed to satisfy the pleading requirements of this case,” the Ballad Health motion to strike states.

In the plaintiffs’ response filed Friday, Santore asks the court to overrule the Ballad Health motion to dismiss and order the defendants “to answer the complaint filed in this case, so that the case may proceed on its merits.”

There are currently no hearing dates set for the case.


Ballad Health released a statement in June after the motion to dismiss was filed on behalf of the health care organization and its volunteer board members.

“Not only have Ballad Health’s board members acted with total integrity at all times, they are each owed our gratitude for the hundreds of hours they spend, without pay, committed to our community, our education and health care systems. The motion to dismiss clearly demonstrates that the claims made by the plaintiffs are without merit,” it said.

Santore declined to comment on the lawsuit Monday. The lawsuit was filed April 12 on behalf of 10 plaintiff-citizens from Sullivan and Washington counties.

It claims the current makeup of the boards amounts to “interlocking directorates” with clear conflicts of interest and asks the court to change the makeup of the Ballad Health Board of Directors.

Defendants include Greeneville businessman and philanthropist Scott Niswonger and other members of the Ballad Health Board: Brian Noland, Barbara Allen, Julie Bennett, David Golden, David Lester, Alan Levine, David May, Gary Peacock, Doug Springer and Keith Wilson.

The Medical Education Assistance Corporation, doing business as East Tennessee Physicians and Associates and University Physicians Practice Group, is also a defendant.

East Tennessee Physicians is described in the lawsuit as “a captive corporate unit of East Tennessee State University.”

Niswonger and Golden also serve on the ETSU Board of Trustees. Noland is ETSU president.

ETSU Physicians and Ballad Health are economic competitors in providing medical services and in employing medical professionals, the lawsuit states. Niswonger, Noland and Golden serving on both boards create conflicts of interest that the court needs to address, the lawsuit claims.

“In the extreme,” the lawsuit states, Niswonger and Golden have the authority with other trustees to “dissolve” ETSU Physicians “and thus completely stifle its status as a market competitor with Ballad.”

Ballad’s own code of ethics states that the “interlocking governance relationships” of Niswonger, Golden and Noland “prohibits these three distinguished gentlemen from serving two masters,” according to the lawsuit.

The civil action states the Ballad Health Certificate of Public Advantage, the legal agreement governing the formation of Ballad Health from predecessor health care systems, does not provide for active state supervision of the composition of Ballad’s board of directors.

The lawsuit asks the court to consider “the relevant volumes of the competitive healthcare market affected by the challenged interlocking directorates.”

It asks the court to reconfigure the Ballad board.


In response, Ballad Health cites legal grounds on several points in asking the court to dismiss the case. The motion states that plaintiffs “lack standing to bring their claims in federal court and plaintiffs fail to state claims upon which relief may be granted.”

Plaintiffs “have failed to allege a case or controversy.” The U.S. Constitution requires dismissal of the complaint under a rule governing “lack of subject matter jurisdiction,” the motion states.

The motion also states the lawsuit should be dismissed “for failing to state a claim for which relief can be granted because plaintiffs have failed to allege antitrust injury and failed to plead the requisite elements of (one section) of the Clayton Act.”

Ballad Health has no parent corporation or publicly held corporation owning 10 percent or more of its stock, according to a certificate of corporate interest filed by Jimmie Miller, of the Kingsport-based law firm of Hunter, Smith & Davis that represents Ballad Health.

The federal court “does not have subject matter jurisdiction over this case, and (plaintiffs) have failed to state a claim upon which relief may be granted,” according to the Ballad Health motion to dismiss.

The motion to strike states that the original complaint filed by Santore should have been amended to include the 234 pages of exhibits and additional materials.

They “are not properly considered on a motion to dismiss” and constitute “an end-around to amend the complaint,” the Ballad Health motion to strike states.

It contends that defendants should not be required “to respond to material in the opposition outside of the pleadings.”

Information presented by Santore “essentially requires defendants to write a renewed motion to dismiss based on new and different facts and assertions,” the Ballad Health motion to strike states.

Ballad Health has immunity under the federal antitrust laws, “which is an additional ground for dismissal,” the motion states.

Our July Calendar Girl

Many Offices Close Thursday

Independence Day will bring schedule changes for governmental offices and other community agencies.

All Greene County Offices will be closed on Thursday. Town halls in Greeneville, Tusculum, Mosheim and Baileyton will be closed Thursday, as will the Greene County Courthouse and offices in the Courthouse Annex.

The Town of Greeneville Public Works Department will be closed Thursday in observance of Independence Day. Garbage normally picked up on Thursday will be collected on Wednesday, and residents are asked to have their cans at the curb early as collection begins at 5:45 a.m.

The Greeneville-Greene County Landfill and Transfer Station will also be closed on Thursday, as will Greene County Convenience Centers.

Offices for Greene County and Greeneville City schools will be closed.

The James H. Quillen U.S. District Courthouse will be closed in observance of the federal holiday, as will all branches of the U.S. Post Office. There will be no mail delivery.

The Greene County Health Department will be closed, as will the local office for the Tennessee Department of Human Services.

The Greene County Public Library and T. Elmer Cox Genealogical and Historical Library will both be closed. The Greene County YMCA will also be closed.

The Boys & Girls Club of Greeneville and Greene County and the Roby-Fitzgerald Adult Center will be closed both Thursday and Friday.

Greeneville Light & Power System offices will be closed on Thursday, as will headquarters for the Greeneville Water Commission.

The University of Tennessee Agricultural Extension Office and Greene County Partnership will be closed as well.

Offices for The Greeneville Sun will be closed in observance of Independence Day.

Thursday’s edition of The Sun will be delivered in the morning.