2020 Metro Legislative Scorecard

The Chamber values our partnership with elected officials as we work together to create jobs, develop workforce, and build communities. Every year, the Chamber’s board of directors adopts a State and Metro Legislative Agenda based on issues identified by our members in our annual policy survey. We share these agendas with state and local elected officials. Throughout the year, we work to provide information to our members and advocate as a collective business voice for Middle Tennessee. We are pleased to share our 2020 Legislative Scorecard, which reports how our elected leaders at the Nashville-Davidson County Metro Council have voted in the past year in four policy areas:

  • Creating an environment where business can prosper.
  • Promoting talent development of the region’s workforce. 
  • Ensuring quality of life that attracts and retains residents and workers.
  • Leading regional efforts to ensure economic prosperity.

Overview:

✅ Affordable Housing – Expedited Permit Review

Workforce and affordable housing are needed in Davidson County to retain and attract residents and workers. According to the American Community Survey’s 2018 1-year estimates, 49.9 percent of Davidson County renters were housing cost-burdened (allocating more than thirty percent of their income to rent) and 26.7 percent of Davidson County homeowners were housing cost-burdened (allocating more than thirty percent of their income to housing costs).

BL2020-150, sponsored by Council members Allen (At-Large), Sledge (17) and O’Connell (19), built upon previous legislation requiring prioritization of Metro departmental review of permits for certain affordable housing projects. BL2020-150 added Codes Department inspections, the issuance of certificates of occupancy, and construction inspections of stormwater facilities to the prioritization list for affordable housing developments.

Chamber Position

The Chamber seeks to expand affordability by increasing the supply of housing and expanding transit service across the region to provide affordable and reliable access to neighborhoods, jobs and education. The Chamber endorsed expanding the list of permit and review types subject to prioritization for certain affordable housing developments.

Status BL2020-150 (Allen, Sledge, O’Connell) was adopted by the Council at its February 18, 2020 meeting. See recorded vote.

✅ Aid for Businesses Impacted by the March 3, 2020 Tornado

In May and June, two ordinances were adopted in response to the March 3 tornado that damaged residences and businesses across Davidson County. The Chamber endorsed both ordinances.

BL2020-234, sponsored by Jeff Syracuse (15), Zulfat Suara (At-Large), Burkley Allen (At-Large), Russ Bradford (13), Kyonzté Toombs (2), and Tanaka Vercher (28), allows Metro Codes to waive certain building permit fees to facilitate the quick repair and rebuilding of residential and commercial properties damaged by the tornado.

BL2020-277, sponsored by Jeff Syracuse (15), permitted nonconforming structures that were damaged or destroyed by the March 3 tornado to be reconstructed so long as the reconstruction did not result in a substantial increase in the degree of non-conformity.

Chamber Position

Support predictable and transparent development and zoning policies that encourage development, investment and support for entrepreneurs and small businesses. The Chamber supported BL2020-234 and BL2020-277.

Status

BL2019-234 (Syracuse, Suara, Allen, Bradford, Toombs and Vercher) was adopted by the Council on May 5, 2020. See recorded vote.

BL2019-277 (Syracuse) was adopted by the Council on June 16, 2020. See recorded vote.

✅ FY21 Metro Nashville-Davidson County Operating Budget & Property Tax Rate Increase

On June 16, 2020, the Metro Nashville-Davidson County Council adopted Council member At-Large Bob Mendes’ substitute Metro FY 2020-2021 operating budget, as amended, by a vote of 32-8. On May 29, the Nashville Area Chamber of Commerce Board voted unanimously to support Mayor Cooper’s proposed budget and any substitute budget proposal that would replenish Metro’s Fund Balance (rainy day fund), put the city on a path to financial sustainability, and continue to provide needed services for residents and businesses. Mayor Cooper’s proposed FY21 budget achieved these goals as did Council member Mendes’ substitute budget.

Mayor Cooper’s proposed budget included significant expense cuts across Metro departments and a $1.00 property tax rate increase. Council member Mendes’ proposed budget included a $1.066 property tax rate increase and directed the additional revenue to, securing $15/hour minimum wage for over 1,500 school employees and $7.5 million more to Metro Nashville Public Schools, among other enhancements.

In making its decision to support the FY21 Operating Budget proposals and the property tax increase, the Chamber Board balanced the circumstances of business recovery and Metro fiscal recovery. The Board understood how Chamber members are struggling with the impacts of the March tornados and COVID-19 on their businesses and their employees. The Board also understood that Metro’s finances were under duress before the tornado and COVID-19, which had only worsened the city’s fiscal challenges.

Earlier this year, the Chamber released an independent study of Metro Finances conducted by Elliott Davis. The study determined:

  • Metro’s financial difficulties were primarily an issue of revenue.
  • Nashville’s tax and fee burden (including property tax, as well as other common taxes and fees) was found to be 16 to 53 percent less than all of the peer cities.
  • While property taxes made up 53 percent of the revenue included in the city’s 2018 general fund, Metro Nashville-Davidson County’s property tax growth has not kept up with property values due to lack of property tax rate adjustments that traditionally accompany property reappraisal years.
  • On the expense side of the ledger, Metro Nashville’s expenses were found to be at the median of peer cities.
  • As a result, Metro reported the lowest fund balance (less than a month’s operating funds at the time), compared to peer cities. The city is bound, by state law, to maintain a fund balance representing three percent of schools’ operations and is bound, by city policy, to have a five percent fund balance for the general fund.

With the uncertainty of how COVID-19 will impact the city’s budget in the coming year, the depleted fund balance has become the priority issue for the city. Chamber members recognize the value of stable city government – 77 percent of members responding to a policy survey stated that a financially-stable city government with the ability to provide services is critical to their business’ success. Mayor Cooper’s proposed budget and Council member Mendes’ substitute budget addressed the fund balance and set Metro on the path to financial stability.

Chamber Position

Support budget proposals that correct Metro’s diminished fund balance, provided basic, needed services for residents and businesses, and put Metro’s finances on the path to stability. The Chamber supported BL2020-286, Mayor Cooper’s proposed FY21 Operating Budget and Council member At-Large Mendes’ substitute budget.

Status

Substitute BL2019-286, as amended (Mendes, At-Large), was adopted by the Council on June 16, 2020. See recorded vote.

✅ FY21 Metro Budget – Amendments to Eliminate Economic Development Grants for Jobs

During the Council debate on Metro’s FY21 Operating Budget (BL2020-286), amendments were offered to Mayor Cooper’s budget and Council member At-Large Mendes’ substitute budget to eliminate all Metro economic development grants. Each fiscal year, the city honors commitments made to companies that have provided jobs in Davidson County in the previous calendar year, as per each company’s agreement with Metro government. Mayor Cooper’s budget proposed to cut these grant payments in half for each business; a cut that was accepted by the businesses given Metro’s difficult financial situations. Amendments were offered, however, to cut these grant payments entirely. Council member Angie Henderson’s (34) amendment was one such amendment that came to a recorded vote on the Council floor.

Chamber Position

The Chamber opposed Amendment 24 and all amendments to eliminate the economic development grants, arguing that the companies who have agreements with Metro to receive these grant payments for jobs created and maintained in Davidson County had already taken a cut of half the grant. To eliminate the grants entirely sent a message to businesses that Metro would not honor its commitments.

Status Amendment 24 to the Metro FY21 operating budget failed at Council on June 16, 2020. See recorded vote.

✅ FY21 Metro Budget – Amendments to Eliminate the Nashville GRAD Program

Mayor Cooper’s proposed FY21 operating budget (BL2020-286) included $500,000 for the Nashville GRAD (Nashville Getting Results for Advanced Degrees) program – a program in its second year that provides wraparound academic and career advising and financial assistance to cover costs for textbooks, transportation, technology fees, industry certification fees, and emergency needs for full-time students at Nashville State Community College and Tennessee College of Applied Technology. Council member At-Large Mendes’ substitute budget increased the GRAD funding to $1m, which was the program’s level of funding in its first year. Amendments were offered that would cut the GRAD funding. Council member Courtney Johnston (26) offered such an amendment that came to a vote on the Council floor.

Chamber Position

The Chamber understands that recruiting and retaining qualified workforce is critical for businesses to succeed in Middle Tennessee and that there are many Nashville-Davidson County residents who want to secure a post-secondary degree or credential, but need financial assistance to cover the many costs that come with being a full- or part-time student. The Chamber opposed cuts to the Nashville GRAD program.

Status

The amendment to eliminate funding for the Nashville GRAD program failed on a voice vote at Council on June 16, 2020. No recorded vote.

No Action - Metro’s Other Post-Employment Benefits

In February 2020, Mayor John Cooper recommended, and the Metro Council appointed, five Nashvillians to serve on the Employee Benefits Study and Formulating Committee. As required by the Metro Charter, the Study and Formulating Committee will review and make recommendations on the fiscal health of the city’s benefits, including the health benefit for Metro retirees, also called the Other Post-Employment Benefits or OPEB. Metro’s OPEB obligations are not pre-funded. Rather, they are managed on a “pay as you go” basis in which benefits are only paid when they become due, versus as they are earned. Per the study of the previous Study and Formulating Committee in 2015, this payment model had generated a projected liability of $2.6 billion.

Chamber leadership has long been concerned about this unfunded liability. It grows each year as more current and former Metro employees retire and they – and their spouses – make use of the benefit. Because the benefit is “pay go,” it was projected, in 2015, to consume an every-increasing portion of Metro’s operating budget; funding that is needed for Metro’s many other priorities. In 2019, the Chamber and the Greater Nashville REALTORS® commissioned Elliott Davis to study OPEB in a broader study of Metro’s finances. The study found that, “[As reflected in the figure below] as of June 30, 2019, Nashville carried an OPEB liability of approximately $4.6 billion which is an increase of $673 million over 2018. While new accounting requirements… resulted in a spike in fiscal year 2018, the City’s OPEB liability had already been growing at an average annual rate of 34% from 2009 through 2017.”


The Elliott Davis Study can be found here.

The Chamber regards this growing OPEB liability as a threat to Metro’s financial security and its ability to meet the needs of the city in the future.

No bills were filed on this issue. The work of the Employee Benefits Study and Formulating Committee is scheduled to begin in fiscal year 2020-2021. The recommendations of the Study and Formulating Committee – including any proposed changes to the structure of OPEB to decrease the long-term liability for the city – must be adopted by the Metro Council.

✅ Metro Water and Sewer Charges

Investing in public infrastructure is critical to improving the quality of life in the community. From entertainment and convention venues to investments in multi-modal transportation and below-ground infrastructure – Nashville-Davidson County makes infrastructure investments to support a growing city and build facilities and venues that promote economic development and improve quality of life.

On December 3, 2019, Metro Council approved increases to water and sewer charges and fees in a 38-0 vote. The new revenue will be used by Metro Water Services (MWS) to pay for the operation, maintenance and capital improvements to water and sewer systems (MWS is an “enterprise fund” meaning that its operating revenues come from customer rates and fees, rather than sales and property taxes.) Maintenance and new capital investment in water and sewer have lagged, as noted in the Council analysis on the ordinance, “Water/sewer capacity charges were last adjusted in 2007. Since then, operating costs have increased 30%, not including the requirements for system upgrades and maintenance.” The Council analysis also found that, “According to MWS, more than 65% of Metro’s water pipes and 58% of the sewer pipes are over 40 years old.”

Chamber Position

Support investment in public infrastructure that has a strong business and financial case. The Chamber supported, BL2019-45, the increase in water and sewer charges.

Status BL2019-45 (Mendes, Henderson, Glover, Benedict, Welsch) was adopted by Council at its December 3, 2019 meeting. See recorded vote.

✅ Small Business Incentives

Designed to generate positive economic returns by creating jobs and generating new tax revenue, economic development tax credits and incentives are valuable investments critical to maintaining a competitive business environment in Nashville/Davidson County.

Council members Colby Sledge (17) and Nancy VanReece (8), sponsored BL2019-2, which amended Metro’s Property Investment Incentive, one of two incentive programs that Metro Nashville-Davidson County has for small businesses. The Property Investment Incentive provides a grant for 50 percent of the investment in the construction or rehabilitation of exterior portions of commercial properties in specified Census tracts, up to a $50,000 cap with a minimum $10,000 investment by the owner. BL2019-2 addressed the unintended consequence of the Property Investment Incentive whereby individual storefronts in a multi-tenant commercial property could not qualify for the grant because the value of the overall multi-tenant commercial property exceeded the limit for a property to qualify for the incentive.

Chamber Position

Support the use of local government tax credits and incentives for economic development as additional tools to encourage the relocation or expansion of business in Nashville. The Chamber supported BL2019-2.

Status BL2019-2 (Sledge, VanReece) was adopted by the Council on November 5, 2019. See recorded vote.

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