For the first time in decades, those who own land in Greeneville town limits are set to pay the same Greene County property tax rate as landowners outside town limits.
The change has town officials weighing options in response to a 16-cent increase they say could have a negative effect on some citizens, like the elderly living on a fixed income.
Those options might include Greeneville creating its own Emergency Medical Service and 911 system rather than participating in joint ventures with Greene County government. Or, an invoice could be sent to the county for $2.3 million — a figure town officials contend is Greeneville’s share of bonds Greene County issued for education that city taxpayers are now set to pay.
The county and town governments finalized budgets and set property tax levies for the new fiscal year that starts Monday.
But, according to the Tennessee Comptroller of the Treasury, there’s still time for changes to tax bills that will go out in the months ahead.
The Greene County Commission’s decision June 17 to levy a single property tax rate of $2.0145 per $100 of assessed value for both inside and outside the Greeneville corporate limits is something that has not happened in four decades.
With the single tax rate, county taxes for those inside Greeneville will increase about 16 cents from last year, while property owners outside town limits will not see a tax increase.
Town landowners also pay a Greeneville property tax. The rate levied by the city will not increase in the 2019-20 fiscal year.
The Greeneville Board of Mayor and Aldermen approved the town’s tax rate for the 2019-20 fiscal on Tuesday, with no increase over last year, at $2.1775 per $100 of assessed property value.
With the town and county tax rates combined, landowners in Greeneville face paying taxes of $4.192 per $100 of assessed property value in the year ahead.
According to the Tennessee Comptroller, the county commission and town council have time to change their tax rates at this point if they choose to do so.
“A governing body must set a tax rate during its annual budget process,” said John Dunn, director of communications for the Comptroller. “A governing body has the opportunity to change its tax rate each year during the annual process. A current fiscal year’s tax rate (which covers July 1-June 30) cannot be changed after the first Monday in October.”
Under that timeline, the county and town legislative bodies have months to evaluate decisions and actions regarding their respective tax rates.
The commission’s approval of a single tax rate — and its 16 cent hike only on town landowners — sparked concern among town officials about hardships the increase could have on some citizens, particularly the elderly and others living on a fixed income.
Since at least the early 1970s, separate property tax rates were designated for land within Greeneville and that in the remainder of the county. The difference related to the use of property tax revenues for payment of education bonds for Greene County Schools’ capital projects.
Historically, the rationale had been that Greeneville residents should not pay the portion of county tax used to retire school bonds, since the town funds its own school system.
As debt for the county school system has been paid, the tax rate has been increased for Greeneville property owners incrementally over the years to reflect retirement of the bonds.
However, this year, a single rate was proposed instead of continuing to incrementally increasing the property tax until the debt is completely retired in 2026.
In the county’s 2019-20 fiscal year budget, though, property tax revenues are not designated for payment of Greene County Schools’ education debt service.
Instead, sales tax revenues are to be used toward the principle and interest of those debts.
A penny of the 5 cents of property tax designated for the school capital projects fund in the county’s budget is restricted for costs associated with the construction of any new schools in the future.
The school capital projects fund is separate from the education bond payments. It is part of the county’s general operating budget, designated for school improvement projects during a fiscal year.
Greene County Commissioners questioned the use of sales tax to pay school debt during their June meeting, and County Attorney Roger Woolsey said the University of Tennessee County Technical Advisory Service was consulted about the sales tax use. CTAS advisors were of the opinion it was acceptable under state law.
The Tennessee Comptroller Office also states that the county has the authority to use sales tax revenue to pay school debt.
“Tennessee Code Annotated requires a county to levy a tax on all the taxable property of the county for the purpose of paying for school bonds, however, it also authorizes the county to use its ‘second half’ of the local option sales tax revenues for payment toward bonds,” Dunn said.
There is typically language found in a resolution to obtain a bond by a governmental entity that authorizes it to reduce the property tax allocation for debt service by the amounts available through sales tax revenues, he said.
Sales tax revenue is used to pay for education debt service by the town. Greeneville City Schools dedicates some of its share of sales tax collections to the town for payments on a bond for renovations and expansion of Greeneville High School.
With the change to a single property tax rate, town officials contend that the city school system should receive a share of the proceeds according to state law.
At this month’s county commission meeting, Budget Director Danny Lowery said there appear to be conflicting sections of state law regarding education debt service bonds.
Two sections of the state law address bonds for school projects. One says 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 ratio of funding based on average daily attendance would currently be 68 percent for Greene County and 32 percent for Greeneville.
A few sections later, the state law 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 TCA.
Another section authorizes the county to do what it has in the past — levy an amount of the property tax only on landowners outside the Greeneville corporate limits for the county school system’s education debt service payments.
One section referenced by Dunn gives the county the ability to use sales tax to make payments toward education debt service. That sections states that the county legislative body taxing 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.”
The state law also authorizes that the governing body of a municipal or special school district to waive its right to all or a part of a county’s education debt service funds it may be owed.
In the short term, construction work and moving at the Greeneville Police Department will create temporary public access issues, Assistant Chief Michael Crum said Friday.
Going forward, the police department has online innovations in the pipeline that will benefit the public.
Crum said plans are to have police department support staff working and to have the building at 200 N. College St. accessible to the public for reports from 7 a.m. to 5 p.m. Mondays through Thursdays and 8 a.m. to 4 p.m. on Fridays.
“There will not be public access for report copies or report questions, citations questions or payments outside those hours,” he said.
The direct phone line to the Greeneville police Records Department is 423-783-2867.
Crum said more online services “are in the works,” including online citation payments and a 24-hour number that will assist with citation information.
A service making crash reports available online for purchase is also planned, Crum said.
Another innovation is starting “public information blasts through social media” on Friday afternoons, he said.
In another change, the inner access door at police department will be locked beginning Monday.
“Citizens will have audio-video contact with dispatch,” Crum said.
“This is all in conjunction with moving our dispatcher to the (Greene County) 911 Center, which will be phase one of central dispatch transition,” Crum said.
Greeneville police will supplement the 911 Dispatch staff at the expanded county 911 headquarters at 111 Union St. beginning Monday.
On Jan. 1, 2020, dispatchers from the Greene County Sheriff’s Department will replace GPD personnel through June 30, 2020, the end of the 2019-20 fiscal year.
By then, officials hope a funding source to pay for the salaries of additional dispatchers to be hired for the central dispatch system will have been developed.
It is an issue that will be closely examined by the Greene County 911 Board of Directors in coming months. Greeneville police Chief Tim Ward is board chairman.
Ward told the 911 board on Tuesday that having police dispatchers working alongside their 911 counterparts as of next week is a positive development.
“It’s a small step in the direction we want to go,” he said.
Crum emphasized that all Greeneville police services and officer response calls “need to continue to be made to 911.”
The Greeneville Board of Mayor and Aldermen on Tuesday will discuss funding options in the wake of a 16-cent increase in Greene County property tax rates only for town landowners.
The board will meet at 4 p.m. in the G. Thomas Love Boardroom in the Greeneville Light & Power System office on North College Street.
In its meeting earlier this month, the Greene County Commission approved a single property tax rate of $2.0145 per $100 of assessed property value for the year ahead. The single rate will result in a 16-cent increase for property owners within the corporate limits over the old “inside city limits” rate of $1.8551.
The separate rates were historically based on a rationale that Greeneville residents should not pay the portion of county tax used to retire school bonds, since the town funds its own school system.
Those outside Greeneville’s corporate limit will continue to pay the same $2.0145 rate as the previous year.
In response to the tax hike, town board members expressed concern about the effects on property owners, particularly the elderly, at its meeting on June 18 and directed town officials explore options in response.
Some initially mentioned options included Greeneville creating its own Emergency Medical Service and 911 system rather than participating in joint ventures with Greene County government. Or, an invoice could be sent to the county for $2.3 million — a figure town officials contend is Greeneville’s share of bonds Greene County issued for education that city taxpayers are now set to pay.
Also on the board’s Tuesday agenda is an update on the town’s negotiations to purchase the Adams building on Crowfoot Alley for additional parking off Depot Street. The board authorized City Administrator Todd Smith to negotiate for the property to provide additional downtown parking.
An an amendment to the town’s ordinance regarding the amount of insurance required for a taxicab franchise to match what the state requires is also on the agenda, along with an amendment to update some language regarding a “key lot” in the Greeneville Zoning Ordinance.
A resolution authorizing the town’s allocation to the school system will also be considered. The town’s allocation for the school system totals $5.8 million in the 2019-20 fiscal year budget approved by the board last month.
Purchase of records management software for the Greeneville Police Department, a special event sign request and a reappointment to the town’s Historic Zoning Commission are also on the agenda.
The Greeneville Light & Power System’s 74-year history of providing electrical service as a municipal utility will come to an end in the last moments of Sunday night.
And quietly at 12:01 a.m on Monday, with no disruption of service, the era of the Greeneville Energy Authority will begin.
The GLPS board and the new Greeneville Energy Authority board signed documents Friday making a seamless transition in administrative structure for the power company that has served Greene County since 1945.
While the adjustment in administrative structure will cause no changes to rates, policies, power distribution or any other daily operations of the utility, it will allow it to better serve the community in the future, said GLPS General Manager Bill Carroll.
The power company will continue to do business under the “Greeneville Light & Power System” name.
“It provides us better tools to do a better job for the community,” Carroll said. The energy authority structure provides more flexibility for the utility to adapt to future changes in the power industry, such as allowing partnerships with other entities.
GLPS attorney Ron Woods explained that the documents signed Friday reflected transfer of assets, liabilities and power distribution operations from the Town of Greeneville and Greeneville Light & Power System to the Greeneville Energy Authority.
That transfer will legally take place at midnight on June 30, he said.
The change in administrative structure has resulted in much work to redo contracts and locate deeds and other documents related to GLPS assets. Woods said that of the 250 properties owned by GLPS, deeds have been found for all but two of them — one for a section of the GLPS office downtown and for the EastView substation.
Carroll shared some of the history of the system and electrical power in Greene County. Electricity was first supplied in 1886 locally by the Greeneville Electric Company. The cost for a kilowatt hour was 10 cents then, which is what it costs today, he said.
That company was purchased in 1900 by Tennessee Eastern Electric Company. That utility built the dam on the Nolichucky River in 1909 and was absorbed into the East Tennessee Light and Power Company, ultimately purchased by the Tennessee Valley Authority in 1944.
On March 30, 1945, the Greeneville Board of Mayor and Aldermen agreed to purchase the East Tennessee Light and Power Company, thus creating GLPS as a municipal power distributor.
The GLPS Board was organized in June 16, 1945, and its first electric power was distributed on June 30, 1945, coincidentally almost the same date that the administrative change is taking place, he said.
In 1945, GLPS had just under 5,000 customers. The utility now has more than 35,000, Carroll said.
Large industrial customers accounting for 27 percent of power sales for the utility in 1946 and 54 percent in 2018, he said.
“We have helped our community progress, and we will continue to help our community progress in the future,” Carroll said.
In other business, the GLPS Board approved purchases of seven transformers from Westinghouse at a cost of $70,060 and three transformers from General Electric at a cost of $35,254.