Town of Mason files suit against Tennessee Comptroller

An emergency hearing over the Comptroller’s financial oversight of the rural, majority Black town to take place Wednesday

By: - April 3, 2022 11:56 am
Mason, Tenn. City Hall. (Photo: John Partipilo)

Mason, Tenn. City Hall. (Photo: John Partipilo)

The Town of Mason’s elected leaders have filed a lawsuit against Comptroller Jason Mumpower, seeking an immediate halt to a financial takeover of the small, majority Black community in rural west Tennessee, located just miles from a new electric car plant expected to economically rejuvenate the region.

In a petition filed Friday afternoon, Mason’s Mayor and Board of Aldermen are seeking a ruling from the court that the Comptroller’s actions are illegal under state law.  The “Comptroller does not have the power to take full control of Mason’s financial expenditures,” the suit claims.

The state’s financial oversight plan also violates the Tennessee Constitution and the Equal Protection Clause of the Fourteenth Amendment of the U.S. Constitution “by trying to take over Mason’s finances without proper justification and because most of the town’s leadership and residents are African-American,” the lawsuit says. Mason is represented by attorneys with the NAACP national organization and its Tennessee chapter.

“The proposed treatment of Mason and its leadership is marked by irregularities and differs significantly from the treatment of similarly situated predominantly white jurisdictions,” the attorneys wrote.

“The fact that the attempted takeover is being perpetuated now — rather than years ago, when Mason’s white leadership actually caused the financial issues complained of — demonstrates the (Comptroller’s) actions are inconsistent with typical government actions and (the Comptroller’s) own history of handling jurisdictions experiencing financial difficulties.

Vice Mayor Virginia Rivers, Mason, Tenn. (Photo: John Partipilo)
Vice Mayor Virginia Rivers, Mason, Tenn. (Photo: John Partipilo)

An emergency hearing has been set for Wednesday in Davidson County Chancery Court by Chancellor Anne Martin.

John Dunn, a spokesman for the Comptroller, on Sunday declined to comment on pending litigation. In her order, Martin set a deadline of 3 p.m Tuesday for the state’s legal response, which will be filed by the Attorney Generals office.

Takeover garners national attention

The Comptroller’s dispute with Mason captured widespread public interest last month after Mumpower took the unprecedented step of mailing a letter to 1,337 of its residents. The letters said Mason could be left out of opportunities that loom ahead with the arrival of a new $5.6 billion Ford Motor plant — as a result of a long history of poor financial management by city leaders, leaving it in deep debt and with the highest tax rate in the county. Mumpower made a direct appeal to residents, encouraging them to urge their elected officials to cede the town’s charter.

“The new Ford plant offers a major opportunity to West Tennessee, but Mason will be left out if it continues to be judged by its poorly run government.” the letter said.

The Comptroller has subsequently noted that Mason’s financial problems are ongoing, including delays in submitting budgets and audits required by law and improperly transferring customer utility payments into the town’s general budget.

Ceding Mason’s charter would subsume the majority Black, majority Democrat community into predominantly White, majority Republican Tipton County. At a community meeting on March 14, Vice Mayor Virginia Rivers said town leaders had no intention of ceding a charter that dates back to 1871. Rivers told the Tennessee Lookout that the Comptroller’s actions were “akin to a hostile takeover” and she questioned their timing, just ahead of one of the largest manufacturing investments in Tennessee history — just five miles from Mason — that will bring more residents, more business and a broader tax base.

Rivers noted that the financial debt accrued by town government occurred in prior administrations, which were predominantly White. Mason’s Mayor, Vice Mayor and five of its six alderman are Black.

Days after the community meeting, Mumpower announced he would move forward to take financial control, imposing a strict budget to make payments on improperly transferred utility funds and requiring that any expenditure over $100 receive his office’s approval.

The takeover, however, could be shorter than the Comptroller initially predicted, after Mason officials used federal American Rescue Act funding to pay down its utility debt, Mumpower said. Mason officials also provided accounts to show a history of debt payments in the past year. The takeover arrangement formally begins Monday.

Ford Motor officials also weighed in, saying they had reached out the Comptroller and local officials, and expressed concern.

Since then, civil rights organizations including the NAACP and the Equity Alliance have sent staff and volunteers to Mason to hold meetings and knock on doors, saying they want to show support.

Lawsuit: ‘inconsistent and irregular steps’

The lawsuit narrates a timeline of contacts between the Comptroller’s office and Mason officials that lays out an  “intermittent” engagement with Mason officials prior to September 2021.

Newly-elected Tennessee Comptroller Jason Mumpower. (Photo: Tennessee Office of the Comptroller)
Tennessee Comptroller Jason Mumpower. (Photo: Tennessee Office of the Comptroller)

Immediately following Gov. Bill Lee’s September 28 announcement of Ford’s new Blue Oval City electric vehicle plant, the Comptroller increased contact, seeking nearly twice-monthly “touch-base” meetings with Mason officials, the lawsuit claims.

“Nearly from that moment on, (the Comptroller) has sought to disrupt the affairs of Mason,” the lawsuit said. “Now, with construction slated to begin shortly and Mason standing to profit from the influx of labor and money, (the Comptroller) has taken the inconsistent and irregular step of trying to seize Mason’s finances and pressure the town to dissolve its charter.”

And, the lawsuit said, the Comptrollers actions are a “clear departure from traditional procedures followed by the Tennessee Comptroller.”

Lawyers for Mason — Van Turner, Jr. president of the NAACP Memphis Branch, Nashville attorney Terry Clayton and three attorneys with the Baltimore-based NAACP Legal Defense and Education Fund — are arguing that the state lacks the authority to take over day-to-day operations of Mason under the Tennessee law cited by the Comptroller.

The law says that the Comptroller may direct local governments to adjust budget estimates, reduce expenses or levy additional taxes.

“But this provision does not establish that (the Comptroller) has the authority to exert the control he seeks here: to require Mason to receive his office’s approval before any expenditure of over $100,” the lawsuit said.

In affidavits submitted by Mason Mayor Emmitt Gooden, Vice Mayor Virginia Rivers and Reva Marshall, Mason’s part-time financial officer, town officials described a pair of recent video conferences with officials from the Comptrollers office.

On March 29, town representatives posed questions about what to do in an emergency that could require immediate funds in excess of $100. The lawsuit cited recent examples involving urgent expenses: a sewer line back-up that risked flooding residents’ homes, emergency responder vehicle  breakdowns and a disruption in IT services that brought town business to a halt until it was repaired. All were urgent expenses.

Comptroller staff they would allocate funds for emergencies, but did not say how much, the lawsuit said. They told Mason officials that, regardless of the time of day, or day of week, the protocol for emergencies would require first responders at the site of an emergency first contact Marshall, the finance officer, who then must contact the the Comptroller’s office for approval, the lawsuit said.

“The ability of Mason to provide emergency services would be dependent upon a chain of telephone calls,” Marshall said in a written affidavit. “Indeed the ultimate decisions related to the health and well-being of citizens would be made by accountants 180 miles away, rather than first responders at the scene.”

Calvin Blades, 75, with glasses, listens during a recent community meeting. (Photo: John Partipilo)
Calvin Blades, 75, with glasses, listens during a recent community meeting. (Photo: John Partipilo)

Marshall noted that her position was part-time, and the takeover would require her to be on call 24-7.

‘Three facts about Mason’

The lawsuit stressed three facts about Mason that are “particularly relevant” to its legal claims. First, it noted the town is majority Black, as is its leadership.

Second, the lawsuit noted financial mismanagement by the previous leadership of Mason, almost exclusively White, forced Mason into debt. When that mismanagement came to light by 2016, Mason’s leadership resigned en mass.

Since then, Mason’s mostly Black, leaders have “steadily paid back Mason’s debt and remedied Mason’s financial standing,” the lawsuit said.

Last, Mason’s location, just five miles from the site of Ford’s new $5.6 billion electric vehicle and battery plant, positions Mason as a prime location for commercial and residential real estate development, the lawsuit said.

Since 2013, the Comptroller has exercised oversight over two other entities: the city of Jellico and Van Buren County. Van Buren, which the lawsuit notes is 96% White, fell under state oversight when it was nearly $9 million in debt and had $1,395 in cash on hand. The county received an unrestricted loan of $680,000 from the state legislature and was not subject to $100 expense approvals, the lawsuit said.

Jellico, which the lawsuit describes as 93% White, came under oversight after its city recorder was indicted for stealing $100,000 in public funds. It similarly did not have to wait for approval of $100 or more in expenses, the lawsuit claims.

Unlike Jellico and Van Buren County, Mason’s attorney wrote, “Mason has dramatically improved its financial situation over the past few years. What’s more, neither of those jurisdictions expected a multi-billion-dollar business to emerge near them. So, rather than stepping in to try to save the finances of a city or county on the brink, (the Comptroller) targets Mason at a time when its financial position is sturdy and improving — and when it stands to gain even sounder economic footing from the construction of the Blue Oval Plant,”

Separately, on Friday, a letter from the NAACP Legal Defense and Educational Fund to Mumpower urged him to release Mason from financial oversight.

There “is no legitimate justification for state takeover of Mason’s finances under these circumstances” the letter said.

“Indeed, the timing of the State’s decision—while the State did not take over the town’s finances when they were in much worse condition under previous white leadership— raises concerns about arbitrary and discriminatory application of state law in violation of the United States Constitution and the Tennessee Constitution.”

 

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Anita Wadhwani
Anita Wadhwani

Anita Wadhwani is a senior reporter for the Tennessee Lookout. The Tennessee AP Broadcasters and Media (TAPME) named her Journalist of the Year in 2019 as well as giving her the Malcolm Law Award for Investigative Journalism. Wadhwani is formerly an investigative reporter with The Tennessean who focused on the impact of public policies on the people and places across Tennessee. She is a graduate of Columbia University in New York and the University of California at Berkeley School of Journalism. Wadhwani lives in Nashville with her partner and two children.

MORE FROM AUTHOR