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Shelbyville City’s statement regarding ’74 Sales Tax Agreement

Posted on Friday, March 8, 2024 at 12:00 pm

The City of Shelbyville takes pride in serving its community and bettering the lives of its citizens. However, Shelbyville has been limited in providing improved or needed services due to an almost fifty-year agreement with Bedford County in which the City relinquished a portion of the local option sales tax to the County to retire bonds incurred by the School Building Program in 1974. The City has continued to relinquish its portion of that tax long after the bonds were retired.

On May 12, 2023, the City of Shelbyville sent the Bedford County Mayor and County Commission a letter that was signed by the Mayor and all City Councilmembers notifying the County of the City’s need to use the revenue for other purposes and offering a reasonable proposal to amend the 1974 Sales Tax Agreement that would allow all parties to benefit from the local option sales tax dollars that are generated within the City of Shelbyville. Specifically, the letter proposed an amendment that would allow the County School System to continue to receive a portion of the proceeds while also allowing the City of Shelbyville to keep some of the local option sales tax dollars generated within the City for its much-needed other purposes. That same letter included a request to meet and talk about the proposal in hopes of a negotiated agreement that would be mutually beneficial for all parties involved.

The City’s good faith efforts to meet with the County to discuss this issue went unheeded and no information was received from the Bedford County government until the City received a September 27, 2023 letter from the County’s outside counsel. Excerpts from the letter include language such as “your proposal to ‘amend’ the Contract is entirely unacceptable,” and a heading that reads “The City’s proposed amendment to the contract is unacceptable and irresponsible.” The letter concluded with the implied threat of actions against the City if the City pursues efforts to regain a portion of the local option sales tax generated within the City of Shelbyville.

The County’s response was puzzling, not only because of the harsh and vitriolic tone, but also because it came after the Tennessee General Assembly approved the Governor’s budget that took effect July 1, 2023. In the approved State budget, the Bedford County School System will receive a significant increase of State funds for education in reoccurring allocations. Based on information on the Bedford County Government website, the increase in State funding for the Fiscal Year July 1, 2023 – June 30, 2024, is $18,459,084.

Based on Bedford County’s refusal to even discuss the issue, the City’s legal team submitted a letter on October 23, 2023, to provide notice that the City of Shelbyville is terminating the 1974 contract. The letter further explained the City takes serious issue with any suggestion that the City does not have the best interests of local families and children at heart, as well as the accusation that by reclaiming revenue the City has voluntarily relinquished for nearly 50 years, the City is callous to the needs of children. Nothing could be further from the truth. For decades, the City has supplemented funding Bedford County already receives from the state by relinquishing tax revenue that, under Tennessee law, otherwise belongs to the City. The City’s letter once again asked Bedford County government officials to have discussions with the City about a new agreement that benefits both parties.

Despite this plea to meet at the negotiating table, it once again appears that the City’s request was ignored. A response from the Bedford County government was not received until the City of Shelbyville pressed forward with an affirmative action during the February 8, 2024, meeting of the Mayor & City Council. Only after this action did the legal counsel for Bedford County issue a new letter, dated February 14, 2024. The letter simply restated the County’s position from September 27, 2023, and did not acknowledge the City of Shelbyville’s request to meet in an effort to reconcile the issue.

The City of Shelbyville’s Mayor and City Council were elected and sworn to represent the taxpayers of the City of Shelbyville to the best of their ability. Although City taxpayers also pay property taxes to Bedford County, this seems to be disregarded by Bedford County government officials. When news of the City’s intent to negotiate the 1974 Local Option Sales Tax Agreement reached the Courthouse, the response from Bedford County officials was not to agree to a meeting, but to punish the City and its citizens by initiating a fee to the City’s Public Works Department for taking tires to the County’s tire disposal center. In addition, City residents were informed that they could not take their trash to a Bedford County convenience center if they took it there in a City issued trash container, despite the fact that the City residents pay taxes for that very service. Lastly, Bedford County officials notified the City that they could no longer acquire topsoil from the County’s “dirt pit” to be used by the City’s Parks and Recreation Department, the same City Department that maintains and provides tennis courts, sports fields, and an indoor pool for use by County school athletic teams and individuals from numerous Bedford County schools, not just those located within the municipal limits.

The City of Shelbyville and Bedford County have been good partners, and the City is eager to continue the partnership. We applaud the efforts and vision of Bedford County officials with the recent construction of the new Bedford County Justice Center, the renovations of the Historic Courthouse, the new Cartwright Elementary School, and most recently, working on constructing a new juvenile center. The City of Shelbyville and all the other Bedford County residents benefit from these progressive actions and accomplishments. However, the City has infrastructure needs as well as the County.

Just as Bedford County needed to renovate or build new facilities, the City is in the same dire situation. The 1960’s era buildings that house the Police Department, Fire Department, City Hall, and others are no longer adequate to meet the demands of a rapidly growing city. Furthermore, the City is understaffed in several key departments, notably Police and Fire. In order to be effective in serving the needs of its citizens, discussions need to be held. The City would rather have productive discussions with the County about changes to the 1974 Sales Tax Agreement, rather than litigate it in court. To Bedford County officials, the City of Shelbyville says: Let’s talk.