Dispute over Town of Mason, Tenn. heads to court Wednesday

‘The fact of the matter is that Mason’s finances are bad and have been getting worse’ the Comptroller’s legal filing says

By: - April 6, 2022 7:00 am
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 in Mason, Tenn. (Photo: John Partipilo)

Attorneys for the Town of Mason and the Tennessee Comptroller are expected to appear in a Nashville courtroom Wednesday morning on an emergency request to prevent the Comptroller from taking control of the town’s finances.

Mason officials, represented by attorneys with the NAACP, filed suit on Friday, claiming the Comptroller’s office lacks the authority to take over Mason’s finances and alleges its actions violate both the U.S. and the Tennessee Constitution.

Mason, a small, majority black town located five miles from the future site of a $5.6 billion Ford Motor Company electric vehicle plant, has struggled for years to balance its books — in part due to large debts incurred under previous administrations, which were largely White, Mason’s lawyers have argued. Mason’s current mayor, vice mayor and five of its six alderman are Black.

“The Town’s baseless allegations that any act by the Comptroller has been motivated by the demographics of the Town’s government officials are inflammatory and merely distract from the Comptroller’s statutory purpose,” wrote attorneys for the Tennessee Comptroller in a legal response.

The Comptroller’s actions — first, an unusual outreach directly to Mason’s citizens, asking them to urge their local elected leaders to cede the town charter — and subsequently placing the town under state financial control “demonstrates the (Comptroller’s) actions are inconsistent with typical government actions,” Mason’s lawyers wrote.

Ceding its charter would subsume the majority Democrat, majority Black town into predominantly White, and largely Republican Tipton County.

“The proposed treatment of Mason and its leadership is marked by irregularities and differs significantly from the treatment of similarly situated predominantly white jurisdictions,” attorneys for Mason wrote in their petition seeking an temporary injunction — which would bring an immediate halt to the Comptroller’s oversight, which was to begin Monday.

In a lengthy response filed Tuesday, the Tennessee Attorney General — which represents the Comptroller — disputed those claims.

“The Town’s baseless allegations that any act by the Comptroller has been motivated by the demographics of the Town’s government officials are inflammatory and merely distract from the Comptroller’s statutory purpose,” the legal response said.

“The fact of the matter is that Mason’s finances are bad and have been getting worse. Contrary to the Town’s allegations, the Town’s finances have not significantly improved under the Town’s current administration.”

State attorneys argued Tennessee law indisputably gives the Comptroller the authority to pursue financial oversight of a city that has consistently failed to comply with state accounting laws.

“The comptroller of the treasury or the comptroller’s designee shall require any periodic information from a local government,” a citation to state law in the filing says.

“If the budget does not comply with this chapter, then the comptroller of the treasury, or the comptroller’s designee shall have the power and the authority to direct the governing body of the local government to adjust its estimates, to reduce expenditures, or to make additional tax levies sufficient to comply with this chapter,” the law says.

Train track through Mason, Tenn. (Photo: John Partipilo)
Train track through Mason, Tenn. (Photo: John Partipilo)

Attorneys for the Comptroller contend the Davidson County Chancery Court lacks jurisdiction over Mason’s claims. State attorneys also argue that local government entities do not have constitutional rights under the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution or the Tennessee Constitution, as cited by Mason’s attorneys.

Should the court maintain jurisdiction, state lawyers argued there is no basis for the court to grant the temporary injunction being sought.

Mason, like all Tennessee municipalities, must adopt and maintain a balanced budget and submit annual budgets to the Comptroller for approval. City governments that operate their own water, sewer or gas systems cannot tap utility revenue to fund city government. Mason, the state’s legal filing argued, has failed to comply with those rules.

The Comptroller’s office has worked to “assist the Town in overcoming its dire financial plight, which was caused by many years of financial mismanagement and other misconduct of the town’s elected officials over many election cycles,” the state’s response said.  One major challenge has been a failure to submit annual audits of the town’s budget that would allow for an accurate review of its finances, it said.

The legal response also claims Mason officials provided inaccurate information to the Comptroller and his staff. In June 2021, town leaders told Comptroller’s office staff that the funds borrowed from their utility districts had been fully repaid, according to the legal filing.

By November, Comptroller staff had learned from the town’s auditor that the balance of those “inter-fund transfers” had — instead of being paid off fully — only grown, the legal filing claims. A draft annual audit submitted to the Comptroller’s office showed that the balance of Mason’s debt to its utilities was $597,000, the filing said.

“The Town’s long-term use of utility funds to pay for government operations and the failure to provide the Comptroller with timely, audited financials sufficient to support the Town’s budgets has led to the Comptroller’s exercising heightened financial oversight over the Town,” lawyers with the Tennessee Attorney General’s office wrote.

“The Comptroller’s actions have no discriminatory intent. The Comptroller intends to assist the Town with achieving a balanced budget, ceasing the use of restricted utility funds, and ensuring the Town repays restricted utility funds back to its utility accounts.”

The Comptroller and his staff “have proceeded diligently and in good faith to improve the financial condition of the Town so that the Town’s residents may benefit from their government.”

The hearing takes place at 11 a.m. before Chancellor Anne Martin.

 

 

 

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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.

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