HomeUncategorizedEducation Foundation seeking $1.2 million from Madison County

Education Foundation seeking $1.2 million from Madison County

The board of the Jackson-Madison County Schools Education Foundation met last week and discussed how to approach getting funds from Madison County that Foundation President Tina Mercer said the County owes.

She first went over the monetary breakdown of how much the EF is owed from the County and the City of Jackson.

The EF is to receive sales tax accrued each year within Madison County from $12 million until it reaches $13 million.

This agreement was reached in 2017 when the County sued the City in Chancery Court for funds the City Council voted to no longer give JMCSS – $12 million per year – when the Council felt the money it was contributing wasn’t being utilized properly.

The document that proposed the EF as a compromise was written by Jackson Mayor Scott Conger, who was a member of the City Council at the time. City Council, County Commission and the JMCSS Board all met in court and agreed to the establishment of the EF. The agreement was ratified by Jimmy Butler, who was the Chancellor of the 26th Judicial District at the time.

When sales taxes reach $12 million for a fiscal year, the County and City combined owe every dollar raised until the $13 million mark to the EF with each entity paying half the amount – meaning if there’s $13 million in sales tax revenue, that would be $1 million going to the EF with the County and City each paying $500,000 each year until 2027.

Mercer told the Board last week she met with Conger last year to verify the sales tax numbers for each fiscal year since the EF’s establishment to make sure she had the correct numbers on what was owed to the EF.

Here’s a breakdown of what the City and County owed for each year and if that money has been paid according to Mercer:

Fiscal yearCity funds owedCity funds paidCounty funds owedCounty funds paid
2016-17Sales tax revenue did not reach $12 million
2017-18Sales tax revenue did not reach $12 million
2018-19$161,539Paid on time$161,539Paid on time
2019-20$215,692$215,692 (City has cut the check and will be received in coming days)$215,692Not paid yet
2020-21$500,000$500,000 – received in May of ‘22$500,000$500,000 – received in June of ’22 (from JMCSS fund balance)
2021-22$500,000$500,000 – received in October of ‘22$500,000Not paid yet

The reason the funds paid from both entities for 2019-20 are just now coming in is because when Mercer asked about the money last year, there was a discrepancy in how much money was owed between the City’s internal audit and the County’s audit, which is done by the State of Tennessee and a question of if that money is counted on a cash basis or accrual basis.

The City has paid a total of $1,215,692 the County hasn’t paid, according to Mercer. According to the 2017 agreement, when one entity pays a certain amount of money, the other entity is automatically obligated to match that amount. That means the County owes $715,692 to the EF and the $500,000 to JMCSS that King had sent to the EF from the JMCSS fund balance in June of 2022.

Mercer brought an article to the Board from The Jackson Post’s March 16 edition: “Commissioners adamant in opposition of giving $500k to Foundation.”

In that article, County Commission budget committee members Gary Deaton and Mike Taylor are quoted as being against giving $500,000 to the EF for 2021-22 when the committee met on March 8.

Their reasoning is that the County sent that money to the County Trustee’s office after the State had audited the County’s funds. Then-Trustee John Newman would’ve been the one to put that money into the account.

At the time, the EF was dormant, so the money went into the JMCSS general fund, according to Deaton, who’s also the chairman of the County Commission.

“It’s the school system’s money anyway, so if there wasn’t a Foundation, which there wasn’t an acting foundation at the time, then it should’ve gone there,” Deaton later clarified in an interview last week.

During the EF meeting on March 21, Mercer recommended the Board hire an attorney to sue the County for the money. Board member Kara Reeves made the motion, seconded by Melissa Summar.

There was discussion about the necessity of a lawsuit.

Larry Lowrance, who was a County Commissioner in 2017, suggested not filing a lawsuit to keep the three governing bodies related to the EF – JMCSS Board, County Commission and City Council – working together in the long term.

Ben Phillips asked if there wasn’t a way to track $500,000 in the JMCSS budget. Mercer said JMCSS Superintendent Marlon King said if the money had been given to the district they would be over the County’s maintenance of effort – the annual amount the County is required by the state to contribute to the school district to keep it running. According to Mercer, King said the district hasn’t received funds from the County over maintenance of effort.

Trey Cleek asked Mercer if King had given her his thoughts on the potential lawsuit. She said she hadn’t discussed it with him since the school district wouldn’t be involved in it.

When the board’s eight present members voted, there were three “yes” votes from Reeves, Mercer and Summar. Lowrance and Cleek voted “no.” Phillips and Peter O’Brien passed on the vote because they felt they needed more information, and Marcus Love abstained since he’s a member of the County Budget Committee. Because rules stipulate a majority of the nine board members (five votes) is required to pass anything, the motion failed.

The Board said they’d like to hear from members of the County who can speak to the County’s perspective in the disagreement, so Mercer said she will invite County Finance Director Karen Bell and County Mayor A.J. Massey to their next meeting on April 4.

Massey and Bell were at the meeting but were not asked to speak then.

Other business conducted during the meeting:

The Board voted to run the silent auction at the JMCSS Gala on April 20 as the EF’s fundraiser for 2023.

The Board also discussed their having voted through e-mail to spend $7,500 for a cornerstone sponsorship of the Gala, which was started last year as a separate fundraiser for the district.

Brandon Shields, brandon@jacksonpost.news

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