ELIZABETHTON — Local funding for the Carter County Emergency Communications 911 District has become an item of concern at the state level.
The local board’s chairman, Elizabethton Police Chief Matt Bailey, has previously sounded the state’s concern over a lack of local support and the spending of reserves. He is now sounding the alarm over a different concern, a cut in the agency’s funding by the Carter County Commission that in the eyes of the state appears to be a “back door tax.”
Bailey said that was a phrase used by officials of the Tennessee Emergency Communications Board in describing the county’s cut in funding for 911 in 2006, shortly after the state had agreed to increase the tax on both residential and commercial telephones.
That concern led Lynn Questell, the state emergency communications board’s executive director, to write a certified letter to the Carter County board requesting they attend the state board’s Feb. 2 meeting. In the letter, Questell told the local board members to “be prepared to show cause why the board should not reduce the emergency telephone service charge ... and to answer any questions the board members may have.”
Bailey said the problem revolves around an increase in the phone tax the Carter County board requested in 2005 in order to bolster revenue in the face of declining landline use. The state approved the increase from 60 cents to $1.50 for residential phone customers and from $2 to $3 for commercial customers.
The next year (2006) the Carter County Commission looked at cutting donations the county made to “outside agencies” as one way of reducing expenses and keeping taxes low. Since 911 was included in the outside agencies, the county’s funding for 911 was cut by $4,000.
While the cut may have had nothing to do with the recent increase 911 received from the phone tax, it raised a red flag in Nashville. It looked from the state’s perspective that the county was diverting 911 fees to other county needs.
Tennessee Emergency Communications Policy No. 14 requires a local board seeking a telephone tax increase to include an interlocal agreement from all local governments promising not to decrease their contribution to the local 911 at the time the additional phone tax revenue is received.
Questell said “the alleged decrease in the local government’s support to 911 is of great concern, particularly as the ECD (emergency communications district) provides dispatching for most, if not all, emergency responders in Carter County.”
Bailey said the state board wants the county to return the funds it says were diverted to the county after the phone taxes were increased. This amounts to $4,000 per year since 2006, for a total of $24,000.
Bailey said if the county does not agree to return the funds, the state board may reduce the phone tax to the pre-2005 rate of 65 cents for residents and $2 for commercial use. He said that would be catastrophic for the local 911, decreasing phone tax revenues by $200,000. Bailey said it would be a double blow because the board is already losing revenue as more and more people give up landline service in favor of cell phones.
The state board agreed to delay a decision on the tax reduction until its next meeting on May 17, Bailey said, giving the local board time to go before the County Commission and its Budget Committee next month to explain the problem and seek a resolution.
If the issue is resolved by the commission next month, Bailey said it is only one of two concerns the state board has with Carter County. The second is a “maintenance of effort” concern over the pay for 911 employees.
The state board has noticed that for the past two years the local agency has spent reserves for the purpose of balancing its budget. The budget in 2010 used $6,187 in reserves. The 2011 budget decreased reserves by $41,117.
Bailey said if the reserves are decreased for a third consecutive year, the state board has the power to declare the Carter County agency “financially distressed” and to consolidate it with a neighboring agency.
To understand the problem, Bailey said it is necessary to study the original agreements that set up the local 911. He said the county and Elizabethton agreed to move its dispatchers to 911. He said part of the understanding was the city and county would continue to fund the personnel. Although a written agreement was not found in Bailey’s search of the archives, he said invoices showed the city and county were paying the salaries.
Bailey said that perception changed in later years as new leaders assumed positions who were not aware of the original agreement. The agreement was further clouded because 911 funding was listed with other outside agencies.
That meant later county leaders saw 911 funding as a lump sum donation not tied to expenses. This became a problem as salaries and benefits rose and the annual donation failed to cover these increases. In the state board’s eyes, the local governments were not keeping up with the required “maintenance of effort.”
To prevent the problem, Bailey said the agency’s funding should be move from “outside agencies” to a “contracted services” line. That way, the 911 board can show the local funding is going to directly pay the salaries and benefits of dispatchers.
Bailey said 911 Director Dale Blevins has been an asset during the budget crisis. He said Blevins was the first to sound the alarm to the board about funding problems and looking for ways to save money, going through expenses with a finetooth comb. He said Blevins “has been a very good steward ... he has cut everywhere he can.”
Despite Blevins’ efforts, Bailey said it will take the community’s leaders to solve the concerns the state board has with the local maintenance of effort and the 911 revenue cuts it finds “a very troubling precedent that could seriously impact the operations of your 911 system and the ECD’s ability to continue providing dispatching.”