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Lenoir City Schools asks council to oppose county cut to adequate facilities tax share
Summary
Lenoir City Schools Director Dr. Mills Smith told council an apparent county effort could eliminate the city's 12.5% share of the adequate facilities tax, potentially costing the district about $209,000; councilors agreed to send a non-inflammatory letter to county leaders and requested the underlying agreement.
Lenoir City — Lenoir City Schools Director Dr. Mills Smith told the city council that the district faces a possible loss of its 12.5% share of the adequate facilities tax, which she estimated would reduce school revenue by roughly $209,000 if the county removes the city's allocation.
Dr. Mills Smith said she learned that county commissioners may be considering eliminating the city's 12.5% allocation under the adequate facilities tax agreement, which the director described as having been negotiated previously for a four-year period ending this fiscal year. "I just wanted to get all the context and all the information to get support to say we really need these monies for the students that are in Lenoir City Schools currently," she said.
Dr. Smith presented council with background numbers, saying the city previously received larger shares in earlier years (she cited a 2021-22 figure of about $416,087 when the city's share had been higher) and that the current 12.5% share has produced amounts in the low $200,000 range in recent years depending on new construction and building permits.
Council members asked procedural questions about how the money is remitted and whether a statute governs the division of facility tax revenue. Staff said the city does not retain the tax; instead the city processes paperwork and forwards collections to the county trustee for disbursement. Dr. Smith asked council whether she should send a formal letter to the county mayor and county commission asking them to retain the 12.5% share for Lenoir City Schools.
Councilors agreed to send a non-inflammatory letter to county leadership urging retention of the school's share and asked city staff and the city attorney to supply the copy of the 2021-22 agreement that established the current allocation. "I would like the letter sent. I agree," one councilor said during the meeting.
Councilors emphasized a diplomatic approach. One council member said the relations with the county were "strained at best" and recommended the letter avoid inflammatory language and seek a voluntary resolution.
The agenda indicated the resolution or agreement referenced is effective July 1 and was adopted for a minimum of four years; council asked staff to provide a copy of the 2021-22 agreement and to notify the schools if county action changed the allocation.
No formal vote to send a letter was recorded as a council ordinance; councilors directed staff and the mayor to prepare the letter and obtain the underlying agreement.
