Tag Archives: municipal

Niota Loses Insurance, Shuts Down Most Operations

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NIOTA, Tenn. (AP) — The city of Niota is again without insurance and has shut down most city services.
According to The Daily Post-Athenian, only a skeleton staff remains in the city of about 800 residents.
Coverage through the Tennessee Municipal League lapsed at 12:01 a.m. Tuesday. Athens Insurance owner Allen Carter said he received a letter from TML stating that the city did not meet the “long term results needed” for coverage to continue.
Carter had negotiated 60-day temporary coverage for the city through TML.
“Niota just needs to handle their affairs and their business correctly,” said Carter. “But right now, there’s just not that option.”
Carter said a lawsuit against the police department was a factor in TML’s decision, but noted the major issue was errors and omissions by public officials.
The insurance pool indicated in April that it wouldn’t renew the city’s insurance because Commissioners Richard Rutledge and Leesa Corum refused to participate in an investigation. A former city worker had accused both of harassment.
Rutledge said on Tuesday that the loss of insurance is not only because of the actions of him and Corum.
“If I felt in any way that it was my problem, I would step down,” Rutledge said.
The Chattanooga Times Free Press reported six employees were laid off Tuesday. The police department is closed, the volunteer fire department is shut down as are the library and the parks.
Mayor Lois Preece said the sewer department had been contracted out to avoid steep environmental fines from the state if it ceased working. Preece said garbage collection might go to a contractor as well.
Preece said the layoffs were not a surprise to those now without jobs.
“They knew it was coming,” she said. “I try to be very upfront with my employees.”

Lawmakers Approve Letting Cities Start New School Systems

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By Lucas Johnson, Associated Press
NASHVILLE, Tenn. — Legislation that would clear the way for cities to begin forming municipal school systems is needed to continue education reform in Tennessee, proponents of the measure said Monday.
The proposal was overwhelmingly approved 70-24 in the House before passing the Senate 24-5. The measure is headed to the governor for his consideration.
The legislation would lift a 1998 ban that forbids municipalities from starting their own school systems.
The measure would benefit six Memphis suburbs seeking to bypass a merger of the Shelby County and Memphis school districts and run their own schools.
The suburbs voted in August to create their own districts after the Legislature passed a narrowly crafted bill that allowed it.

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Anti-annexation Bill Zips Through House Committee, Stuns City Lobbyists

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Stunned lobbyists for Tennessee cities are trying to regroup after Rep. Mike Carter’s bill upending the state’s 15-year-old urban growth boundary law barreled through the House Local Government Committee on Tuesday despite their concerns,reports Andy Sher.
The freshman Ooltewah Republican says he brought the bill affecting annexation (HB231) because of Chattanooga officials’ previous efforts to amend its growth plan in order to, in Carter’s words, “cherry pick” affluent suburbs. But he says the problems extend well beyond Chattanooga, and so does his bill.
Calling it the “Ryan’s buffet rule” after the all-you-can-eat restaurant chain, Carter says the bill requires cities to “clean” their “plates” by annexing everything in their current urban growth plans before seeking to amend them.
Another bill provision requires cities to meet their requirements to provide services to all previously annexed areas before amending the plans. Because the bill affects every town and city in the state, that brought officials from the Tennessee Municipal League, which represents them, running to the full committee after the measure passed subcommittee last week.
“This is not limited to Chattanooga,” TML Deputy Director Chad Jenkins told committee members. “It’s not limited to Hamilton County. It’s not limited to big cities. It’s every city in the state.”
Jenkins warned of “unintended consequences if this bill is passed” with impacts far beyond Hamilton County.
He also said the 1998 law, which requires cities to create urban growth plans as a solution to urban sprawl, worked in Chattanooga’s case because other cities and Hamilton County easily blocked the city’s effort on the local coordinating committee comprised of local mayors.
Jenkins also warned Carter’s bill would block cities from annexing property held by property owners who wish to come into the city for various reasons. He cited as an example a farmer who wants to increase the value of his land by obtaining services like water and sewage to entice developers.

Shelby County Municipal School District Votes Derailed

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After moving confidently and rapidly toward forming municipal school districts, suburban officials received notice Wednesday that their efforts are “procedurally defective,” reports the Commercial Appeal.
The Shelby County Election Commission voted 5-0 to deny requests from Arlington, Bartlett, Collierville, Germantown and Lakeland to hold referendums on May 10 to authorize the formation of municipal districts.
The election commission vote was based on recommendations from commission lawyers John Ryder and Monice Hagler, who on Wednesday conferred with the state’s coordinator of elections and Atty. Gen. Robert Cooper’s office.
Halting the referendums is a setback for suburban cities, but not necessarily the death knell for municipal districts, if bills being debated in the state legislature are passed. Cooper issued an advisory opinion Tuesday that the statewide ban on municipal districts had not yet been lifted and could not be lifted until after transfer of administration of Memphis City Schools to Shelby County Schools is completed.

AG: TN to Get $$ from ‘Municipal Bond Derivative’ Deal

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News release from state attorney generals office:
Tennessee Attorney General Bob Cooper and 26 other attorneys general announced a $58.75 million agreement with Wachovia Bank N.A. and Wells Fargo Bank, N.A. as part of an ongoing nationwide investigation of alleged anticompetitive and fraudulent conduct in the municipal bond derivatives industry.
As part of the multistate agreement, Wachovia has agreed to pay $54.5 million in restitution to affected state agencies, municipalities, school districts and not-for-profit entities nationwide that entered into municipal derivative contracts with Wachovia between 1998 and 2004. In addition, Wachovia agreed to pay a $1.25 million civil penalty and $3 million in fees and costs of the investigation to the participating states. It has not yet been determined how much Tennessee and the other states will receive from the agreement.
Municipal bond derivatives are contracts that tax-exempt issuers use to reinvest proceeds of bond sales until the funds are needed. They may also be used to avoid fluctuating interest rates. In April 2008, the multistate working group began investigating allegations that some large financial institutions, including national banks and insurance companies, and brokers, engaged in various schemes to rig bids and commit other deceptive, unfair and fraudulent conduct in the municipal bond derivatives market.
The ongoing investigation revealed some Wachovia employees colluded with other financial institutions and brokers with whom they had working relationships to secure an unfair advantage over other firms. The defendants are alleged to have rigged bids by submitting non-competitive courtesy bids and submitting fraudulent certifications of compliance to government agencies in addition to other violations of U.S. Treasury regulations.
“We are not finished,” Attorney General Cooper said. “We will continue working to ensure there are no financial institutions or brokers benefiting at the expense of taxpayers through anticompetitive activity. We appreciate the cooperation Wachovia has demonstrated in this ongoing matter.”
The multistate task force agreement is part of a coordinated global $148 million agreement that Wachovia entered into today. The financial institution also reached agreement with the U.S. Department of Justice’s Antitrust Division, the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Internal Revenue Service.