Officials in five government entities throughout Tennessee wasted, stole, or misused almost $1.7 million of taxpayer money, according to audits that the State Comptroller released during April.

• NOLACHUCKEY ELEMENTARY SCHOOL/GREENEVILLE: The former bookkeeper at Nolachuckey Elementary School in Greeneville stole at least $2,484 from the school over a five-month period. The Greene County Grand Jury indicted the former bookkeeper, Buffi Gray, on one count of theft over $1,000. Gray was able to take the money in part because she controlled all aspects of financial transactions at the school, from the time money was received until it was spent or deposited in the bank.

• CARDERVIEW UTILITY DISTRICT: The district manager’s husband worked for the utility district and was paid a wage of $18,803.

• CITY OF TULLAHOMA: The Fiber Optics Fund has a deficit fund balance of $1,636,881.

• MARSHALL COUNTY SCHOOLS : Spot Lowe Vocational School officials failed to obtain Board approval for expenses amounting to $6,265 included as accounts payable.

• CITY OF PHILADELPHIA: Expenditures of the General Fund exceeded the city’s approved budget by $14,025.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

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Metro Nashville officials have given the OK to pilot a program that will regulate where and when mobile food truck vendors may operate — with regulations more strict than what Memphis, for instance, imposes on similar vendors.

“The regulations that we have are directly correlated to traffic and parking regulation for the city. We want to make sure that there are no traffic hazards (because of the food trucks),” said Jenna Smith, spokeswoman for the Metro Public Works Department.

As Tennessee Watchdog has previously reported, city officials cannot cite any documented instances of the nearly three-dozen food truck vendors posing a risk throughout Nashville.

The new regulations, which could change, as they are part of a pilot program, allow vendors to sell in nine downtown zones and forbid them from operating between 3:30 a.m. and 6 a.m.

In contrast, Shelby County officials permit vendors to operate all hours of the day and night in Memphis.

“A food vendor (in Memphis) could operate at 3:30 a.m., as long as they meet the previous guidelines,” said Otho Sawyer, spokesman for the Shelby County Health Department.

Nashville officials say regulations are subject to change, but only to a point. Anybody wishing to patronize a food truck at 4 a.m. in Nashville — a city with an active nightlife — will still likely have no other option than to visit a brick and mortar restaurant, regardless.

Smith acknowledges that at least one vendor had expressed interest in operating between 3:30 a.m. to 6 a.m., but that vendor will have no such luck.

“Those are the hours that we have to have the roads clear for street sweeping and maintenance. We are doing this to make sure that there are no traffic hazards,” she said.

City officials say that their new rules and any others are still subject to change based upon feedback they receive from vendors.

Nashville Food Truck Association President B.J. Lofback, who speaks for the vendors,  said in an exclusive Tennessee Watchdog video last year that city officials should provide traffic studies to back up their claim that vendors pose a safety risk. He also worried that brick and mortar restaurant owners, fearing competition from mobile food trucks, were the source of the proposed regulations late last year, through the Greater Nashville Hospitality Association.

Now, he calls Nashville’s pilot program “insanely accommodating.”

“This is something that we are willing to work with. This program probably makes sense when more and more food trucks are coming (to the city),” Lofback said.

Last year, Lofback cited Memphis, Atlanta, and Miami as cities that have regulations more favorable to mobile food vendors than what Nashville wanted to offer.

“And, as for the premise that food trucks are a safety risk, that talk has really died down. Everyone has a vested interest in this, including the Hospitality Association. We get that every one involved in this wants respect. Now, the onus is on us to make sure the program goes correctly.”

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

Get regular Tennessee Watchdog updates through our Facebook or Twitter accounts

Officials in 33 government entities throughout Tennessee wasted or misused almost $11.7 million of taxpayer money according to audits that the State Comptroller released during March.

City of Whitwell

• More than $6,200 in overdraft fees was added to two of the city’s bank accounts.
• The city paid more than $2,200 for unnecessary Internet services. The city used AOL and MSN dial-up Internet service until switching to a DSL Internet vendor in 2008. However, the city continued to pay more than $40 per month to AOL and MSN for their services as well.
• § The former city recorder sold a total of 120 hours of vacation leave back to the city at a total cost of $1,305. However, there was no provision in the city’s personnel policy allowing for the sale of vacation leave.

Boys and Girls Club of the Tennessee Valley

• The Project Director submitted fictitious invoices for reimbursement from the organization that resulted in personal gain. The fraudulent expenses included in reimbursement requests amounted to $2,524 and $4,944.

Coffee County

• A cash shortage of at least $4,768 existed, in addition to questionable payroll disbursements totaling $4,121.
• During a review of court officers’ timesheets, it was noted that at least two employees were routinely working less than the required 30 hours per week, but were still receiving benefits awarded to full-time employees. The county’s estimated cost of benefits for these two employees, including paid leave, health insurance, and retirement totaled $9,232.

Marshall County

• Expenditures exceeded appropriations in major appropriation categories, including General Purpose School and School Federal Projects by $355,034.
• Salaries exceeded line-item appropriations in the General Purpose School, School Federal Projects, and Central Cafeteria funds by amounts ranging from $319 to $64,895.
• The General Purpose School Fund purchased cartons totaling $1,194 from Southern Carton Company. David Kennedy, the husband of school board member Barbara Kennedy, is the owner of Southern Carton Company. These purchases violate the conflict of interest statute.

Putnam County

• Competitive bids were not solicited for the purchase of excess insurance coverage above self-insured amounts for liability ($121,443); property and boiler ($229,564); worker’s compensation ($124,698); employment practices ($56,734); data breech ($16,448); and other various ($24,357) types of insurance.
• Competitive bids were not solicited for the purchase of an ambulance and an ambulance remount. According to county officials, the ambulance was purchased from bids solicited by the county in 2007; however, the purchase price for the ambulance exceeded the 2007 bid amount by $13,459, and the purchase price of the remount exceeded the 2007 bid by $8,390.
• The county paid two employees $9,300 each as independent contractors for network systems installation. These amounts were not paid through the county’s payroll system and were in addition to the employees’ regular salaries. Furthermore, there was no documentation on file to support the time worked; therefore, auditors could not determine if the work was performed during or after regular work hours. Since these supplemental payments were not paid through the county’s payroll system, the payments were not subjected to income tax, Social Security, and Medicare deductions. Also, the county did not report and pay its required matching Social Security and Medicare associated with these supplemental payments. The county issued both employees an Internal Revenue Service (IRS) Form 1099 for $5,000 for 2009; however, both employees received $6,800 in 2009. The county did not report any expenditures to the IRS for 2010; however, both employees received $2,500 in 2010. Therefore, both employees received compensation of $4,300 that was not reported to the IRS.
• Expenditures exceeded appropriations approved by the County Commission in the Food Service major appropriation category (the legal level of control) of the Central Cafeteria Fund by $66,498.

Jefferson County

• Expenditures exceeded appropriations in various funds, including General, Highway/Public Works, and General Purpose/School by $202,594.
• The Sheriff’s Department received an in-store credit of $6,205 from Craig’s Firearms Company from the sale of numerous confiscated weapons. The Sheriff’s Department used this store credit to make various purchases; however, invoices were not on file to support $782.48 of the credit used.
• The Solid Waste Disposal Fund had a deficit of $4,960,508 in unrestricted net assets at June 30, 2011, an increase of $22,443 from the previous year.

City of Newbern

• Expenditures exceeded appropriations in the Sanitation fund by $43,197, in the State Street Aid fund by $28,267 and in the Drug fund by $9,178.

Intermont Utility District of Sullivan County

• Unaccounted for water at 41.74 percent, meeting the criteria for excessive water loss as established by the Utility Management Review Board.

Town of Alexandria

• Unaccounted for water at 50 percent.

City of Mt. Pleasant

• Unaccounted for water at 42 percent.

City of Puryear

• Unaccounted for water at 41 percent.

Roane Central Utility District

• Competitive bids were not solicited for the building renovation project, which had a total cost of $193,458.

City of Niota

• Expenditures were in excess of the approved budget by $16,061.

Town of Atoka

• Actual expenditures exceeded the amount appropriated in the approved budget for the Town’s Drug Fund by approximately $13,000.

Stewart County

• Expenditures exceeded total appropriations approved by the County Commission in the Highway/Public Works Fund by $7,586.

City of Friendship

• Expenditures exceeded appropriations in the General Fund by $91,709, in the State Street Aid Fund by $25,750, and in the Sanitation Fund by $6,762.

Hardeman County

• Expenditures exceeded appropriations approved by the County Commission in the General Fund’s Victims Assistance Programs and the General Debt Service Fund’s Interest on Debt – General Government major appropriation categories (the legal level of control) by $1,084 and $225, respectively.
• Several salary line items exceeded appropriations in the General Fund by amounts ranging from $77 to $5,574.
• The budget and subsequent amendments submitted to and approved by the County Commission for the Drug Control Fund resulted in appropriations exceeding estimated available funding by $28,232.
• The Solid Waste Disposal Fund had a deficit of $1,146,899, in unrestricted net assets.

City of Gleason

• There is apparently a direct conflict of interest between an alderman and his personal interests. The city purchased goods and services from an alderman.
• The City entered into a lease agreement in which the City will lease property to a nonprofit corporation for the consideration of $1 per year. Legal opinions issued by the City’s attorney and attorneys for MTAS state that this type of arrangement is not allowed within the parameters of the City’s charter. However, the City Board voted to enter into the agreement with three yes votes, one no vote, and one pass.

Scott County

• Expenditures exceeded appropriations approved by the County Commission in several major appropriation categories of the General Fund in amounts ranging from $55 to $15,810, and in the General Purpose School Fund in amounts ranging from $1,387 to $6,382.
• Scott County comingled American Recovery and Reinvestment Act (ARRA) expenditures for the Energy Efficiency and Conservation Block Grant Program, Recovery Act with other local, state, and federal funds. U.S. Office of Management and Budget’s (OMB) Compliance Supplement requires grantees to agree to maintain records that identify adequately the source (i.e., revenue) and application (i.e., expenditure) of ARRA awards. When ARRA grant requirements are not followed, the OMB can terminate the grants; suspend or debar the county from receiving grants; or, in serious cases, may apply civil or criminal penalties.

Town of Livingston

• Total operating expenditures of the General Fund exceeded total appropriations by $119,676.

Maury County

• Expenditures exceeded appropriations in the General Fund by $130,944.
• Expenditures exceeded total appropriations in the General Debt Service Fund by $5,812.
• The School Department paid $2,144 to B’s Tees, a business owned by Board of Education member Robert Burcham. In the prior year, the department paid $1,086 to B’s Tees. These payments, to a business owned by a member of the Board of Education, violate the conflict of interest statute.
• Expenditures exceeded appropriations approved by the Board of Education in the Transportation major appropriation category by $42,291 in the School Federal Projects Fund.
• The Office of Circuit Court Clerk received a call from a probation officer inquiring about expunging the record of defendant No. 1. Research into the file led to the discovery that defendant No. 1 had not paid any fines and costs associated with the sentencing she received. It was also discovered that fees and costs had been removed from the computer records. Further research on a defendant No. 2, who was related to the    aforementioned caller, led to the discovery that fees and costs had been removed from defendant No. 2’s records that should not have been. It was also discovered that a     Court Action Report was with paid. In October 2010, after the clerk investigated these discrepancies, the employment of the court employee who submitted the false Court      Action Report was terminated. Auditors further identified that a falsified document was used in court   to suspend supervised probation on defendant No. 1 who had not paid    any fines or costs.During the investigation, it was also noted that employees of the office share passwords, and passwords are not always secured. Fees and costs were removed from the pending court case of defendant No. 1 by an employee using another employee’s password, who was out of the office that day. Auditors have discussed this finding with the district attorney general.

Calhoun-Charleston Utility District of McMinn and Bradley Counties

• The District experienced a 39.83 percent water loss.

Rhea County

• The Drug Control Fund paid for recurring wireless telephone charges for employees not involved in drug enforcement.
• The Office of Circuit and General Sessions Courts Clerk had a cash shortage of $5,297. This is because an employee voided 15 receipts totaling this amount after issuing receipts to customers and collecting funds for the amounts of the receipts. These funds were not credited to customers’ cases or otherwise accounted for. The clerk reported the matter to the district attorney general, and the district attorney general requested that the Tennessee Bureau of Investigation (TBI) investigate the matter. The employee was interviewed by the TBI and admitted voiding the receipts and taking office funds for personal use. She was dismissed from employment on the same day. She was indicted by the Rhea County Grand Jury for theft of property. No restitution has been made.

Sumner County

• The Self-Insurance Fund had a deficit of $933,538 in unrestricted net assets.

Morgan County

• Expenditures exceeded total appropriations in the Drug Control Fund by $3,903.

Perry County

• The Solid Waste/Sanitation Fund had a deficit in unassigned fund balance of $8,300 and a cash overdraft of $9,827.
• Expenditures exceeded appropriations in the General category and the Ambulance Service category by $8,665.
• Expenditures exceeded total appropriations approved by the County Commission in the Drug Control Fund by $3,629.
• The County Commission approved an $80,000 loan to the Perry County Senior Citizens Center to be repaid over a 10-year period; however, the county did not enter into a formal written contract with the Senior Citizens Center for the loan.
• § Competitive bids were not solicited for the purchase of an air conditioner and supplies ($12,438); lighting supplies ($10,380); and computers ($12,072).

McNairy County

• Expenditures exceeded appropriations approved by the County Commission in the Miscellaneous major appropriation category in the General Fund by $65,604.

Cheatham County

• The General Fund had a $1,440,811 deficit unassigned fund balance.
• The budget and subsequent amendments submitted to and approved by the County Commission for the General Fund resulted in appropriations exceeding estimated available funding by $485,459.
• Expenditures exceeded total appropriations in the General Capital Projects Fund by $6,774.
• Expenditures exceeded appropriations in the General Fund by $18,073.
• Salaries exceeded line-item appropriations in the General and Solid Waste/Sanitation funds by amounts ranging from $7 to $11,950.
• Competitive bids were not solicited for the purchase of de-icing salt totaling $36,274.
• Competitive bids were not solicited for the purchase of computers ($25,755) or classroom supplies ($56,142).

Benton County

• General Fund Expenditures exceeded appropriations by $2,794,139.
• Salaries exceeded line-item appropriations in the General Fund by amounts ranging from $59 to $292.

City of Maynardville

• The state street aid fund had a fund deficit of $2,217.

Union City

• The city had total expenditures in excess of the total budgeted expenditures in the Hotel/Motel Tax Fund ($2,158)

Murfreesboro City Schools

• Comptrollers noted negative profit margins for school publications ($3,893)

Bangham Utility Water District

• A person unknown stole $1,000 in cash from the District during business hours. The theft was reported immediately to the Sheriff’s office and to the Comptroller’s office. However, this event constitutes a lack of internal control and compliance in the safeguarding of District’s assets.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

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Chattanooga Metropolitan Airport officials admit their plan to use millions of taxpayer dollars to compete against a private company that services private jets is already losing money  — more than $300,000 thus far, and counting.

Tennessee Watchdog reported in 2010 that Airport Authority officials would use $4 million in Tennessee Department of Transportation grants to establish a new Fixed Base of Operations (FBO). This new FBO would compete against TAC Air, which at the time was the only FBO at the airport.

“The new FBO has lost about $317,000 since it opened (last summer) through November of last year,” said Christina Siebold, Airport Authority spokeswoman, when Tennessee Watchdog approached her about the matter (seen in this exclusive video).

According to traditional definitions, an FBO is a company that services general aviation aircraft (providing aircraft fuel, hangar storage and other facilities for airplane crews and passengers). Some FBOs operate privately, while others operate under the authority of a particular airport municipality.

Airport Authority officials chose Wilson Air as the company that would manage the taxpayer-subsidized FBO and compete against TAC Air. Airport officials wanted a second FBO at the airport for the stated purpose of providing more competition and lowering jet fuel prices.

TAC Air officials have already said that market conditions do not support a second FBO at the airport. Because of the recession, the private FBOs that once operated in Chattanooga either consolidated their operations with TAC Air or ceased doing business altogether.

Chattanooga Metropolitan Airport

“We aren’t just crying because we have a competitor on our field. We are competing with our landlord and we are subsidizing their (FBO) facility with the land lease that we pay the airport, the two percent of gross receipts that we pay,” said Pam McAllister, general manager for TAC Air in Chattanooga.

“All of that goes to the operating budget that they are using to fund the loss. So we are subsidizing our competitor. Who would want to be in this situation?”

TAC Air officials, along with the National Air Transportation Association (NATA), and a Seattle-based firm specializing in real estate issues in aviation have heavily criticized the taxpayer-subsidized FBO in a 2011 Tennessee Watchdog story. They said last year that the project is a no-win scenario for taxpayers.

Airport Authority officials told Tennessee Watchdog this month that the new FBO will continue to lose money for its first five years of operation before it turns a profit.

“From the beginning we talked about a five-year window,” Siebold said.

“Any business that you look at has a startup period where they are getting their feet under them and introducing themselves to the market, and you’ll sustain some early losses in the startup phase.”

Siebold and other Airport Authority officials, however, could not provide any documentation that they had made such a claim while seeking state grant money to start the project.

Siebold said last year that Airport Authority officials are not willing to wait for a private company to establish a second FBO with its own funds.

Furthermore, the Tennessee Aeronautics Commission has awarded the airport an additional $5 million in grant money to establish new hangar space on the side of the airport nearest Wilson Air. TAC Air officials said a large number of customers are not flocking to the airport as they were five years ago — and many hangars are empty as a result.

“There is currently 40,000 square feet of available hangar space, and we expect 20,000 more square feet of hangar space will be available once a new airport (in Cleveland, 35 miles away) opens,” said Dave Edwards, TAC Air spokesman.

Airport Authority officials said in a grant request that new hangar space is needed because they anticipate that Chattanooga will boom with new industry in coming years — including the new Volkswagen plant. Because of the new industry, more people will use the airport in the future, they said.

A spokesman for Volkswagen Chattanooga, however, would not say whether the company plans to make extensive use of the airport.

“I have no information to share on this subject and, as any answer I give would be pure speculation, I won’t venture one,” said Scott Wilson, speaking for Volkswagen.

Other than Volkswagen’s occasional freight runs, McAllister said she and other TAC Air employees rarely see that company’s aircraft fly into the Chattanooga airport.

State officials apparently gave the hangar grant money to the airport without determining for themselves if the airport was truly in need of it.

A spokeswoman for the Tennessee Aeronautics Commission told Tennessee Watchdog that Commission members do not independently verify the claims that Airport Authority officials make in their grant requests.

Meanwhile, a member of the Tennessee Aeronautics Commission, who voted to use taxpayer money to establish Wilson Air in Chattanooga, was that company’s first tenant in Chattanooga, raising questions about a possible conflict of interest.

LOSING MONEY

Originally, Airport Authority officials did not expect that the second FBO would lose $317,000 halfway through its first year of operation (August through November 2011, according to the most recently released reports).

According to a proposal that Wilson Air submitted to Airport Authority officials in 2010 (when they were considering which company would compete against TAC Air), the company expected to lose exactly $108,413 in all of year one. The company would start generating profits in its second year of operation and beyond, at least according to its proposal.

“The $317,000 that they have lost in the first five months does not include their startup costs of over $1 million,” McAllister said.

“If it continues going at the pace it’s going right now, at the end of the first year in operation, it stands to lose three-quarters of a million dollars.”

Wilson Air/Chattanooga Metropolitan Airport

Despite the financial loss, Siebold said the second FBO is providing much needed competition in the Chattanooga area to private planes in need of fuel.

In the exclusive video, she said the following:

“Our number one goal in this endeavor was to make sure that we introduce competition on the airfield and lower the fuel prices here at the airport. We believe it’s been hugely successful, and I think the numbers reflect that.”

“It’s great to see that you have fuel prices that are much more competitive. An offshoot of the competition that has been added to the market is that it will take us a little bit longer to reach profitability.”

According to airnav.com, a website used by many aviation professionals to determine which airport offers the best fuel prices, this is not necessarily the case, at least as of March 23 of this year.

According to the web site, fuel prices at the two FBOs in Chattanooga remain lower than they are at Tennessee’s two largest airports (in Nashville and Memphis, both of which have two private FBOs). Tennessee Watchdog investigated TAC Air’s fuel prices in Chattanooga in 2010, when it had no competition, and reported similar findings.

Now that TAC Air has a government-subsidized competitor in Chattanooga, full-service fuel at TAC Air is less expensive than what Wilson Air charges.

Wilson Air officials have denied Tennessee Watchdog’s request for comment, but, in a flier, company officials accuse TAC Air of spreading misinformation about their FBO, claiming that fuel prices have gone down as a result of the competition.

Siebold referred all further questions to April Cameron, the airport’s vice president of finance.

Cameron agreed to answer a variety of questions concerning the need for new hangar space. She also agreed to answer whether airport officials could furnish proof that they always believed the second FBO would lose money during its first five years of operation. Cameron would only answer those questions via e-mail. She has thus far not responded.

HANGAR SPACE?

McAllister has a question for the Tennessee Aeronautics Commission, one that nobody will thus far answer.

“Why would the state of Tennessee turn around and give them (the Chattanooga Airport Authority) $5 million to invest in another hangar when we have about 40,000 square feet of empty (hangar) space right now that I can’t fill?”

B.J. Doughty, spokeswoman for the Tennessee Aeronautics Commission, told Tennessee Watchdog that Commission members listen to requests for grant money and review project proposals.

Their duties, however, do not include confirming that what Airport Authority officials said was true when they requested the grant money.

“The due diligence for local needs is done by those with first-hand knowledge — the airport sponsor or manager.  The Aeronautics Commission may ask questions for clarification. They do not routinely become involved in independent audit or investigation beyond that scope,” Doughty said.

Aeronautics Commission member Jim Berry is a Chattanooga businessman. He has a potential conflict of interest as it pertains to Wilson Air.

Jim Berry

According to the Aug. 11, 2011 edition of the Chattanooga Times Free Press, Berry was Wilson Air’s first hangar tenant after it opened last summer. That means Berry used his position as a public servant to allocate taxpayer money to a company he later used for personal reasons.

Berry did not respond to any of Tennessee Watchdog’s questions about the matter.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

Get regular Tennessee Watchdog updates through our Facebook or Twitter accounts

According to AirNav.com
• As of March 23, Full-service fuel for one type of fuel at TAC Air in Chattanooga (100LL) was $6.32, whereas Full-service fuel for the same type of fuel at Wilson Air was $6.35 (self-service at Wilson Air was $5.65).  Fuel for another type of full-service fuel (Jet A) was $5.97 at TAC Air, but $6.05 at Wilson Air. In both instances, full-service fuel was more expensive at Wilson Air.
• At Nashville International Airport, the fuel prices were much more expensive. The 100LL fuel (full-service) was either $8.17 or $8.08 depending on which FBO a customer uses. Jet A fuel was either $8.04 or $7.79.
• At Knoxville McGhee Tyson Airport, self-service 100LL fuel was either $5.36 or $6.32, depending upon which FBO a customer uses. Full-service Jet A fuel was $6.55.
• At Memphis International Airport, 100LL full-service fuel was either $6.97 or $7.71. Full-service Jet A was either $6.76 or $7.63.

The county commission meetings in Fentress County are not nearly as quarrelsome as they were this time last year — but many people have reason to believe that is actually a bad thing.

County officials have implemented a new policy that makes it difficult for any resident to speak publicly at any county commission meeting. Citizens of most other counties in the United States have the right to speak at commission meetings, with only certain time restrictions specified.

As Tennessee Watchdog reported last year, many residents are unhappy about a 50 percent increase in property taxes that was originally created to fund construction of a new jail. One resident, David Beaty, appeared at a county commission meeting to complain about the plan when County Executive Frank Smith publicly called him a “dumbass.”

Frank Smith

The odds of such an occurrence repeating itself, however, are unlikely at this time.

“The meetings are now tame because no one (in the audience) is allowed to speak anymore,” said resident Kristen Rosecrants.

Also, as Tennessee Watchdog reported, Beaty’s attempt to film a subsequent commission meeting failed when Smith ordered Beaty to put the camera down, or else face removal from the chambers (as seen in this video).

Several months earlier, Smith, in fact, ordered a deputy to remove Beaty from the commission chambers by force.

At the time, Smith told Tennessee Watchdog that anyone who wishes to film a commission meeting may do so — provided he or she asks for Smith’s permission in advance. Beaty did not ask for Smith’s permission.

Because of those events, Beaty has filed a lawsuit against the county alleging, among other things, that Smith and other county officials are guilty of malicious harassment and assault and battery against him.

Beaty wanted to say little about the lawsuit — but he did say that he no longer attends county commission meetings because of the new rule that limits public speaking.

“They stopped letting people speak. They shut us off. Now, they passed a rule that says you have to go through a county commissioner or a county executive and submit in writing what you want to talk about. Then, when you do make it up there, they (commissioners) can make a motion not to let you speak. This is all so they can turn a deaf ear to complaints about taxing and spending,” Beaty said.

One resident told Tennessee Watchdog that Smith recently denied him the right to film a commission meeting, even though he asked for Smith’s permission.

Also, angry county residents organized a bond protest petition against the proposed jail and gathered many signatures. Election commissioners certified the petition, and county commissioners then rescinded their original bond resolution (that would have resulted in the property tax funding the jail). County commissioners are now looking for other ways to finance the building.

The property tax remains, regardless — and elderly residents said it has affected their livelihoods.

THE NEW RULE

“Even people who raise their hands at the end of a meeting are not allowed to speak anymore (because of the new rule),” Rosecrants said.

The exact language of the new rule specifies the following:

“A non-commission member who wishes to address the Board should have his/her name placed on the commissioner’s agenda by the Chairperson or a Board member. They should state the subject matter in which they wish to address the Board and submit any documentation they wish the Board to review with their request. Then the non-commission member may address the Board at the appropriate time unless a Board member objects, then the Board will vote whether or not the non-commission member can participate. The chairperson may set a limit on the time a non-commission member may be allowed to speak.”

Tennessee Watchdog attended a recent commission meeting. Commissioners ended the meeting without any apparent opportunity for public comment.

Smith, however, said an opportunity for public comment did exist.

“As I was ending the meeting, I clearly asked if there was any further business. No one (in the

A Fentress County sheriff's deputy approaches county resident David Beatty and orders him to stop filming the county commission meeting, at the orders of County Executive Frank Smith (still shot from video taken by David Beatty)

audience) raised their hand, so I called for the meeting to adjourn.”

The new rule was put in place to prevent residents such as Beaty from abusing their right to speak, Smith said, adding that Beaty had a habit of speaking well beyond a specified time limit.

FILMING

Tennessee Watchdog sought Smith’s permission to film the recent commission meeting, and Smith granted that request.

“As long as anyone asks, I will grant that privilege (of recording) to them.”

Resident Justin Miller, however, said Smith denied him the same right before a meeting last year.

Miller had considered running for county commissioner and thought filming a commission meeting might help him as a learning experience.

“I approached Mr. Smith and asked ‘Can I film the meeting?’ He responded by saying ‘No. I just don’t see any sense in that.’”

“This was after Smith had Mr. Beaty forcibly removed and after he said anyone who wanted to film only needed his permission. I don’t think that what he did was right. We live here. We pay taxes (for this business).”

Tennessee Watchdog tried contacting Smith about what Miller had to say, but Smith was unavailable to comment on either this matter or the issue of why the property tax is still in effect.

PROPERTY TAX?

“Because of the property tax, most people say they would love to leave, but they can’t sell their property — and it’s not just because of the increased taxes and lack of jobs. It’s also the attitude of the county government,” Beaty said.

Beaty previously told Tennessee Watchdog that his finances can sustain the property tax increase, but that other people, particularly many elderly residents, cannot.

One such resident, Barbara Brannon, said she and her husband receive less than $850 a month on a combined fixed income. The monthly payment on their mobile home is $500 a month, utilities normally run about $220 a month, leaving around $250 a month for food. This year, however, that extra $250 for one month will have to go toward their much higher property taxes, she said.

“I can’t buy anything else. The property tax increase is not right. I don’t think they ought to raise the property tax on people who can’t afford it, especially with the price of gas and groceries going up. It is an enormous hardship.”

Despite their difficulties, Brannon said she and her husband have no choice but to remain.

“I’ve lived in Fentress County all my life — and I will remain here for the rest of it.”

Smith said the following to Tennessee Watchdog last year, concerning complaints over the property tax increase.

“It’s the people who move here who bitch about it. They should go back to the bigger cities (that they came from). The people who have always lived here aren’t bitching any.”

Another elderly resident, Shirley Dishmon, who is also handicapped, is more fortunate than Brannon, thanks to her landlord, who chose not to pass along the higher property tax costs in the monthly rent.

“I think it’s sad that they should take so much from the elderly, because we only draw so much. The other elderly around here don’t have much. Many people around here draw food stamps. And there are a lot of people in Jamestown that are out of work,” Dishmon said.

According to state statistics, the average median household income in Fentress County is about $28,000. Almost 25 percent of the residents live at or below poverty levels, while 33 percent of residents receive food stamps.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

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Officials in Tennessee wasted or misused more than $3.6 million of taxpayer money during the month of February, according to audits that the State Comptroller’s Office released last month.

Among the problems that the Comptroller cited were government officials knowingly allowing government employees to sell scrap metal for personal gain, expenditures exceeding appropriations, and a lack of competitive bidding for taxpayer-subsidized projects.

• Hardin County

• Employees of the solid waste department sold scrap metal for personal gain. One of the employees maintains a personal scrap metal business. Solid Waste Department management had knowledge of this illegal activity and took corrective action. Auditors could not ascertain the amount and the value of the scrap metal sold. This practice resulted in a loss of revenue from the sale of scrap metal by the Solid Waste Department. The district attorney is reviewing the finding.

• Expenditures exceeded appropriations approved by the County Commission in the Highway/Public Works Fund by $284,794.

• Expenditures exceeded appropriations in the General Purpose School Fund by $71,028.

• Salaries exceeded line-item appropriations in the General Purpose School and School Federal Projects funds by amounts ranging from $77 to $33,640.

• Cannon County

• Expenditures exceeded total appropriations approved by the County Commission in the Solid Waste/Sanitation Fund by $1,012.

• Expenditures exceeded appropriations approved by the County Commission by $29,117 in the General and General Debt Service Fund.

• Employees of the Solid Waste Department admitted to auditors that they had removed scrap metal from the county’s convenience center and sold the metal for personal gain. The county executive advised us that since the employees weren’t making much money, he had given them verbal approval to take scrap metal that was “given to them.”

Also, the county executive advised auditors that sometime around the summer of 2010, he told employees that they could no longer take the scrap metal. However, based on statements from an    employee, inmates who worked at the convenience center were allowed to remove the wiring from items, and at least one employee would sell the copper for the inmates. Auditors could not determine the amount of and the value of the scrap metal sold. This unauthorized        removal of scrap metal resulted in a loss of revenue for the county.

• Expenditures exceeded appropriations approved by the County Commission in the Operation and Maintenance of Equipment major appropriation category (the legal level of control) of the Highway/Public Works Fund by $2,907.

• Lauderdale County

• Expenditures and encumbrances exceeded appropriations approved by the County Commission in the Regular Capital Outlay major appropriation category (the legal level of control) in the General Purpose School Fund by $149,528.

• Competitive bids were not solicited for the purchase of wireless service for several schools totaling $248,224. This purchase was made using federal grant funds under the Title I Grants to Local Educational Agencies, Recovery Act.

• A cash shortage of at least $4,102 existed in the office.

• A Lauderdale County deputy repeatedly spent undercover funds for unauthorized purposes and falsified documents to cover his tracks.  The same deputy used his county cell phone for personal business and overstated the amount of compensatory time he had earned.         Winchester’s actions resulted in a cash shortage of more than   $4,000, although the total could have been higher because the records of undercover fund expenditures were falsified.

• Expenditures for the Office of Director of Schools exceeded the office’s approved budget by almost $150,000 because officials failed to properly account for costs related to a school renovation contract.

• Cumberland County

• The Solid Waste Disposal Fund had a deficit of $1,457,597 in unrestricted net assets.

• Expenditures exceeded total appropriations in the Drug Control Fund by $20,390.

• Expenditures exceeded appropriations approved by the county commission in the following funds major appropriation categories: (1) Drug Enforcement: $12,572.  (2) Solid Waste Sanitation: $2,878 (3) General Debt Service: $17,793 (4) School Federal Projects: $7,515.

•  Certain collections at the Juvenile Detention Center could not be accounted for, resulting in a cash shortage of $1,437.

• Town of Crump

• An investigative audit revealed that 343 pills, including hydrocodone, that were seized by the Crump Police Department were not in evidence and were unaccounted for.  A subsequent investigation revealed a more widespread scheme to remove specific drug items from the police department evidence room and offices.

• A pickup truck seized during a narcotics arrest was titled to the town and used for public works and other non-drug enforcement related purposes.

• Campbell County

• The Highway Department did not have the time or necessary equipment to complete a dirt removal project. County officials did not solicit competitive bids for the work. County officials instead hired contractor J.B. Arnold to complete the project for $26,412.

• General Fund expenditures exceeded appropriations approved by the County Commission in the Jail major appropriation category by $51,659.

• Competitive bids were not solicited for the removal/installation of a fence totaling $45,788 and the construction of a parking lot at Valley View Elementary School totaling $39,160. The failure to solicit competitive bids could result in the county paying more than the most      competitive price.

• Town of Scott’s Hill

• Unaccounted for water was at 39.16 percent, over state standards of 35 percent.

• City of Waverly

• The city’s percentage of unaccounted for water is 52 percent.

• Town of Ridgely

• The mayor (who has since left office) owed $3,279 in unpaid property taxes.

• Benton County Library

• The library exceeded budget appropriations on several line items for a total of $27,321 in expenditures above the budget.

• Giles County

• The Highway/Public Works Fund borrowed $450,000 from the General Fund to provide cash for operations in anticipation of revenue collections. The state Comptroller’s Office did not approve the loan.

• Salaries exceeded appropriations in the General Purpose School and School Federal Projects Funds by amounts ranging from $2 to   $119,534.

• The school department allowed an IDEA-funded teacher to work with higher-level kindergarten students. The school department calculated the time spent on unallowable activities at 76.5 hours, for a total salary and benefits cost to the Tennessee Department of         Education from the General Purpose School Fund.

• Decatur County

• Expenditures exceeded appropriations approved by the County Commission in the Soil Conservation major appropriation category of the General Fund by $69,402.

• McKenzie Water Department

• The department’s unaccounted for water totaled at 53 percent.

• Sullivan County

• The Sullivan Grand Jury indicted a court employee with the Office of Circuit and General Sessions Courts Clerk for modifying court-ordered interest rates on civil cases in which she was personally involved. The woman was indicted on four counts of official misconduct.

• An employee improperly used a credit card to purchase fuel for her private vehicle, resulting in a cash shortage of $72.17.

• City of Dyersburg

• Several city employees owed real estate taxes at year’s end. The unpaid taxes were at least six months overdue.

• South Giles Utility District

• Unaccounted for water was at 40.74 percent.

• Town of Rossville

• The Solid Waste Fund overspent its budget by $6,200.

• Polk County

• Several employees had accrued vacation leave balances that exceeded the 15-day maximum balance established by the county’s personnel policy.

• General Purpose School Fund Expenditures exceeded appropriations approved by the County Commission in the Fiscal Services major appropriation category by $8,010.

• Town of Atoka

• Expenditures exceeded the amount appropriated in the approved budget for the town’s Drug Fund by approximately $13,000.

• Industrial Development Board of the City of Fayetteville and Lincoln County

• The Industrial Development Board entered into contracts for the purchase of a sign ($17,680) and related landscaping and installation services ($40,550) as well as an agreement for contract design and inspection services ($4,192). The Board solicited bids from three companies for the sign and four companies for the related landscaping and installation work, but no advertisement for bids was published.

• The bid request for the landscaping and installation work contained specifications requiring the bidder to use specified vendors for construction and electrical services as well as lighting and irrigation equipment. These items appear to account for approximately one-half    of the $40,550 contract. These items, along with contract design and inspection services, were not subject to any bid process.

• The business that was awarded the contract does not have a Tennessee Contractor’s License. Generally, any construction contract exceeding $25,000 can only be awarded to an entity that is licensed as a general contractor.     

• Monroe County

• The School Federal Projects Fund had a cash overdraft of $19,149.

• Town of Gadsden

• Expenditures exceeded appropriations in the State Street Aid Fund   by $21,153. The General Fund expenditures exceeded appropriations by $7,774.

• City of Church Hill

• General Fund Expenditures had a negative fund balance of $30,066.

• Town of Clarksburg

• The Town of Clarksburg had expenditures in excess of appropriations of $1,139 for the General Fund and $8,170 for the State Street Aid Fund.

• City of Collinwood

• Collinwood’s former city recorder took almost $85,000 in city utility collections throughout a 27-month period. The city recorder, whose name is Sherry Gallient, destroyed payment records to cover up her activity, Comptrollers said.

Authorities arrested Gallient last month and charged her with theft.

She was the only person responsible for recording and accounting the money that the city took in from utility collections.

• Town of Gadsden

• Expenditures exceeded appropriations in the Street Aid Fund by $21,152. The General Fund Expenditures exceeded appropriations by $7,774.

• Fayetteville-Lincoln County Regional Airport Authority

• The airport negotiated separate contracts for hangar floor paint removal and sandblasting of $4,158 and hangar floor repainting of $4,247 without using formal bid procedures.

• Siam Utility District of Carter County

• Unaccounted for water was at 39.3 percent.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

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The former executive director of Cannon County’s REACH After-School Program used more than $37,000 in program funds for personal use and made more than $26,000 in questionable expenditures, according to state auditors.

Taxpayers are responsible for supporting the REACH program through various state and federal grants.

The woman who was the program’s executive director in Cannon County in 2008 explains the concept of REACH in this video.

Comptrollers say that the former executive director transferred funds from the program’s bank account to her personal bank account. She also cashed at least one check to herself from the program’s bank account, according to the investigation, done with assistance from the Tennessee Bureau of Investigation.

She also requested and received reimbursements for expenditures for documentation that had been falsified.

A spokesperson for the program told Tennessee Watchdog that REACH officials are not going to comment on the matter.

Among the Comptroller’s findings:

• A cash shortage of at least $37,259 existed because REACH   checks ($6,230 worth) went into the executive director’s personal checking account. The executive director also gave money to a friend  without doing the proper paperwork. She also fabricated $5,115 worth of documentation for reimbursements.

• Questionable disbursements totaling $26,474 existed in the REACH program.

• Purchases totaling $7,970 were made from Wal-Mart, Sam’s Club, Dollar General, and HSBC Business Solutions. The executive director would make the purchases on account or by credit card, keep the receipts, and send the receipts to the County Executive’s Office to be paid by the county’s General Fund. These purchases were purportedly for the REACH program and Christmas gifts for the students. Auditors, however, could not account for these    disbursements during interviews or observations at the REACH sites.

• Six payments totaling $1,999 were paid from the REACH checking account to the executive director’s minor son. These payments were purportedly for work performed for the REACH program. The individual responsible for approving the timesheets told auditors that her signature of approval had been forged. In addition, the timesheets included time worked on the weekends when the REACH facilities were closed. These funds were deposited into the personal account of the executive director.

• The executive director requested duplicate reimbursements from the county’s General Fund on 10 occasions, totaling $560. Each of these reimbursements had been previously paid through the REACH checking account, the “Good Ole Days” fundraiser account, or     previously reimbursed by the county’s General Fund.

• Auditors found $904 that should not have been paid from the REACH petty cash fund.

• The executive director submitted reimbursement requests from the   county’s General Fund for a monthly utility bill paid on behalf of a   friend totaling $100 to Middle Tennessee Electric Company and for purchases at Dollar General Market totaling $156 for bath rugs and shower hooks.

• Overpayments of $129 were made to the executive director for REACH related travel.

• The executive director administered an American Recovery and Reinvestment Act (ARRA) grant entitled the Emergency Food and Shelter Program. This grant totaled $3,600 and was for the emergency payment of rent and other necessities for low-income residents of Cannon County. The executive director diverted $1,600 of these grant proceeds to her personal account.

In addition, the executive director had $575 paid from the county’s General Fund directly to her landlord. The documentation sent to the county to support this rent payment was from another individual who had no knowledge of the grant program and received no rent assistance.

The executive director diverted additional grant proceeds for a friend’s utilities totaling $175 and his rent totaling $850. The executive director disbursed the remainder of the grant for the rent of another REACH employee totaling $400.

• REACH sponsored two horseshows to raise money for REACH related programs. The executive director requested and received two cash advances from the county’s General Fund totaling $4,000 and $4,820 before each show for purported start-up expenses. Auditors were unable to determine how these advances were spent since no   receipts were maintained by the executive director or submitted to the county for reconciliation.

• The executive director requested and received reimbursement from the county’s General Fund purportedly for the purchase of fundraiser supplies totaling $476. The executive director had previously requested and received a cash advance for $4,820 for the purchase of these supplies to be used for the horseshow fundraiser.

• The Cannon County Executive’s Office paid $1,100 in maternity leave to a REACH employee in violation of the county’s approved personnel policy.

• The timesheets for a REACH employee who worked as a tutor in the General Education Development (GED) program reflected hours that were not worked (totaling $635).

Auditors said that internal control weaknesses contributed to the opportunity for the cash shortage to occur, including the failure of the Cannon County executive to adequately review documentation submitted for reimbursement or payment and to correct deficiencies noted in prior years’ audit reports.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

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Polk County officials gave $50,000 to a nonprofit that was formed to raise money to build a new library — but that was six years ago, and there is still no formal agreement to construct a library.

Furthermore, four years have passed since county officials formally requested in a lawsuit that the nonprofit, known as Friends of the Library, give the money back. For unknown reasons, county officials dropped that lawsuit less than two weeks later. They have taken no further action on the matter, according to a new audit from the state Comptroller’s Office that is critical of the arrangement.

A message left with Friends of the Library Chairwoman Sally Love was not returned.

The county currently has a part-time library with an all-volunteer staff. Friends of the Library members want to move that library into another building.

Polk County Courthouse

Instead of constructing a new building, as it originally planned, the Friends of the Library nonprofit has now changed its mind. The organization is now interested in remodeling an already existing building elsewhere into a new full-time library — six years after it took taxpayers’ money. Another tenant, however, still occupies that building, and any plans to renovate it into a library are very tentative, said County Executive Mike Firestone.

“If the Friends of the Library still want to pursue this project, then they could use those funds toward remodeling. The commission has made no commitment one way or the other on this (library) issue, and it’s still a work in progress,” Firestone said.

Tennessee Watchdog asked Firestone if commissioners will ask Friends of the Library to return taxpayers’ money to the county, should this tentative agreement fall through.

Will county officials ever try to get taxpayers’ money back if the nonprofit fails to make a firm commitment on a new library?

For those questions, Firestone referred Tennessee Watchdog to County Commission Chairman Mike Curbow.

Curbow said he and other commissioners are scheduled to discuss the library issue next week.

“Without talking to the rest of the commissioners, I’m not sure we’re going to try to get that money back. I wouldn’t want to speak without input from the whole commission. I’m not sure what everyone else is thinking,” Curbow said.

In their report, auditors questioned the wisdom of the agreement.

“By providing county funds to the nonprofit organization and allowing the nonprofit to control the construction of a building to house the county library, the nonprofit may not follow county purchasing laws and regulations. Also, questions arise as to the timing and planning of this project.”

The matter concerning the library construction costs is only one of many negative findings in the new audit.

Among the other findings, which include numerous flaws in the county’s accounting and record-keeping practices:

• Several employees had accrued vacation leave balances that exceeded the 15-day maximum balance established by the county’s personnel policy.

• General Fund expenditures exceeded appropriations approved by the County Commission in the Contributions to Other Agencies major appropriation category by $6,639.

• General Purpose School Fund Expenditures exceeded appropriations approved by the County Commission in the Fiscal Services major appropriation category by $8,010.

• In eight different offices within the county government, responsibilities for money collection, handling and record-keeping were not properly separated.

• In four different offices, multiple employees operated out of the same cash drawers.

“Failure to assign each employee a separate cash drawer reduces accountability if money is lost or stolen,” Comptroller Justin Wilson said in the report.

Curbow did not address the Comptroller’s findings with Tennessee Watchdog.

“I haven’t had a chance to read the audit yet,” Curbow said.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

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The owner of a doggie daycare facility once threatened with jail because he could not afford to comply with a Nashville zoning requirement over parking will have an official grand opening for his business tomorrow.

The Dog Spot will have its formal ribbon cutting and grand opening celebration at 3:30 p.m. Tuesday (Feb. 7) at 1004 Gallatin Avenue.

Chad Baker, at work in his Nashville business

As Tennessee Watchdog reported in November, Nashville authorities had sentenced Dog Spot owner Chad Baker to five consecutive nights in jail for not complying with the Gallatin Pike Improvement District Specific Plan. Metro officials told Baker that he had to move the parking from the front of his doggie day care facility to the back.

After a long, protracted fight, members of the Metro Planning Commission told Baker in December that they would approve his revised site plan for his business. The revised plan allowed for parking in the front.

“The Dog Spot is now officially open for business and 100 percent legal,” Baker said.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

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Beacon Center of Tennessee President Justin Owen tells Tennessee Watchdog that General Motors’ lobbying efforts for taxpayer money in Tennessee harms other businesses and is ultimately counterproductive for the state.

“There are many problems with corporate welfare. You ultimately get states participating in a bidding war against each other over bringing a company into a state so they can claim it creates jobs — but that just drives up the costs to taxpayers,” Owen said in this exclusive podcast.

As Tennessee Watchdog reported last month, GM’s lobbying efforts have paid off handsomely. The company has already accepted more than $17 million from Tennessee officials and more than $1 billion from other states — despite having more than $35 billion in cash reserve.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

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