County officials respond to recent audit

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Here are statements from the recent audit of Cannon County concerning the Industrial Development Board.

Deficiencies were noted (by the auditors) in the administration of the Industrial Development Board.

Our examination of the fund maintained by the Cannon County Industrial Board (the Board) and administered by the county executive revealed the following deficiencies:

A. The Board did not exercised sufficient oversight for its financial transactions. During the year ended June 30, 2012, the Board held only two meetings. The Board minutes dated October 2011, reflected no details of any discussions held or actions taken. On June 12, 2012, the County Commission appointed new board members, and the new board met for the first time that same night. The only significant actions resulting from that meeting were the election of officers, setting a regular meeting time, and approval of the budget for 2012-13. This lack of oversight resulted in financial transactions and certain decisions being made and carried out by the county executive without the knowledge of the Board..
B. Our review of the financial statements and the minutes of subsequent Board meetings reveal that three companies occupied buildings owned by the Board during the year examined. At June 30, 2012, all three of these companies were delinquent in rent payments owed to the Board …. Of the uncollected amounts …. Only the among due from PC Disposal is reflected as a receivable in the financial statements of the Board at June 30. The failure to collect rent due resulted in a significant loss of revenue for the Board.

Management's Response - Industrial Development Board Chairman

A. In the spring of 2012, I approached the Cannon County Commission chairman and informed him of the fact that the county industrial development board had not had one meeting with a quorum for several years and therefore was having issues conducting business. Until I spoke with the commission chairman, the county commission had never been informed of this problem. The commission chairman contacted every member of the former board and attempted twice to call a meeting of this board. Both attempts to have a meeting failed due to lack of a quorum. On June 12, 2012, the county commission voted to completely replace the membership of the industrial board, except for myself, due to a lack of meeting attendance. The newly formed board has met monthly, with a legal quorum, since their appointment in June and has dealt with numerous issues. I want the record to show that the current board, which is made up of unpaid volunteers, is exerting tremendous amounts of energy to exercise sufficient oversight of its financial transactions; however, years of inactivity by the previous board cannot be corrected in one meeting. As the one remaining member of the former board, I completely agree with the auditor's statement that the lack of oversight of the former board resulted in transactions and decisions being made and carried out by the county executive without knowledge of the board. For increased internal control of industrial board funds, the current board has formally requested that the board chairman be required to cosign all checks written on the board's fund. However, the county executive has refused to allow this change.

B. I concur that the failure to collect monies resulted in a significant loss of revenue. I would like to point out that the county executive was responsible for administering this fund, and he failed to collect these monies. It should be pointed out that two of the companies the audit points out as owning rent did not have written lease contracts nor a cost/benefit analysis performed on both of these companies to determine the correct PILOT amount to begin with. Upon formation, the current board discovered this and immediately had a cost/benefit analysis performed on both of these companies and south to secure written PILOT agreements. One company chose to vacate the industrial park instead of sign a lease contract, and the other is currently in litigation with the board. As stated before, the previous board did not have a quorum when dealing with these companies.

C. This issue took place prior to the current board being instated. The current board has initiated a policy that all future repair work, which is the responsibility of the board, be performed by the county instead of repairs in-lieu-of rent. In the defense of the company in question, the previous board had not had a quorum in years, so the company was having difficulty getting formal board approval for needed repairs.

D. Due to ongoing liti-gation, I cannot comment except to say that I agree with the audit finding in that here was never an executed written contract or lease agreement between the industrial development board and this company.

I agree with the recommen-dation that the Industrial Board should implement policies and procedures to insure adequate oversight of financial trans-actions. The newly appointed board is in the process of doing just that. However, I do not believe that implementing policies will address many of the issues this audit has indentified plus the numerous other deficiencies that the current board has discovered. Policies adopted by the board are practically worthless if they are not followed by the entity's financial management.

Management's Response - County Executive

A. No financial transac-tions or decisions concerning financial transactions were made by the county executive without approval from the chairman of the Industrial Board.

B/C. It is the responsibility of the Industrial Board to ensure that companies occupying buildings owned by the Board stay current, and it is the responsibility of the County Executive's Office to collect such payments. The P.C. Disposal Company was two months delinquent as of June 30,. 2012. The T.H.C. Select Company was delinquent due to a disagreement between company officials and county officials as to how much the company spent readying the building at the time the company took possession. Crane Interiors was not delinquent as of June 30,. 2012, due to an agreement between the company, the county executive, and the chairman of the Industrial Board to allow rent abatement for much needed building repairs. The repairs consisted of drainage ditches, rock, and a concrete slab at the rear of the building. All repairs were visibly inspected by the county executive to ensure the work was completed.

D. It is admitted that the Board had no formal contract with T.H.C. Select as of the June 30, 2012, date. There was a verbal agreement between T.H.C. Select, the Industrial Board, and the county executive at the time T.H.C. Select occupied the building. The county attorney had been asked to prepare a lease agreement, but some issues were not clear at the time and no lease agreement.

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audit, county executive, IDB
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Members Opinions:
March 15, 2013 at 7:58am
It appears those appointed to the board do not want to do their job. Find someone who has the time and will take the initiative to do the right thing for the county.
March 15, 2013 at 3:13pm
I sincerely welcome you to come to every meeting we hold ewimbush. I believe you would see that this board is absolutely dedicated to helping Cannon County grow and prosper.

We meet the first Tuesday of every month at 6:00 PM at the Cannon County Courthouse.

You are also so very welcome to review any and all video, audio and written minutes of the past meetings to ensure you have a complete understanding of what the current IDB has faced and accomplished in the last nine months. I would also suggest reading the State of Tennessee Comptroller's aduit findings which cannot be questioned as biased in any way. The findings speak for themselves.

It helps to see it, hear it and read it in its entirety. I so hope you and others will take me up on the offer.
March 15, 2013 at 7:25pm
ewimbush, It appears you missed the two most important statements in the story. The first in paragraph A which states
" On June 12, 2012, the County Commission appointed new board members, and the new board met for the first time that same night." And the second in paragraph A. which states
"The newly formed board has met monthly, with a legal quorum, since their appointment in June and has dealt with numerous issues. "
The IBD Board that was not doing the job or even attending meetings was the board that served prior to
June of 2012.

March 18, 2013 at 1:04pm
What recruiting methods are being employed by the current Industrial Board in their attempt to attract and draw industry to Cannon County? What are the talking points when meeting with prospective businesses? What relationship does this board have with the County Excecutive? Are both entities working together toward a common goal of attracting industry and business to Cannon County? Does the Industrial Board work with the Chamber of Commerce toward common goals? Is tourism believed to be a valid business enterprise by the Industrial board and if so, how are they working with existing businesses to grow this resource?
These are all questions involving mission statements, goals, active participation and things that may not seem apparent during monthly meetings. What transpires between those meetings will most likely determine success or failure.
March 18, 2013 at 5:10pm
Sounds like Bonnie could be a good board member!
James Adkins
March 18, 2013 at 8:55pm
I speak for myself and no one else, but I wanted to answer your questions Bonnie.

1. The board recently had Rebecca Smith with UCED meet with businesses here in Cannon County about three weeks ago to help them understand what grants are available to help their businesses grow.
The board also met with the Rutherford Co. IDB in an effort to let them know we were interested in any business they deem too small for them or they felt would be a good fit for Cannon County. That is the first time that has ever been done to my knowledge.
We have also created a brochure to give to prospective businesses that showcases many good things about Cannon County and we are actively pursuing land to use as potential building sites for the many different companies the State of Tennessee notifies us of that could use a “site ready” piece of property.
2. When we discuss potential businesses we talk about our location here in Cannon County next to Rutherford Co. which is a huge benefit. We talk about the work force and what we have available. We talk about the small community atmosphere and the low crime rate and many more things too numerous to mention.
3. We have a great working relationship with the Chamber of Commerce as one of our IDB members Neal Appelbaum is the current President of the Chamber. We also pay the Chamber of Commerce a monthly fee to use their office as a headquarters since we do not have a building of our own like most other counties do.
4. I believe and I am sure others on the board do as well that tourism is and will become a huge part of the success of Cannon County in years to come. We have many different tourist attractions that would generate tax dollars such as Antique stores, the Square, the Good Old Days, the Moonlite Drive In, the Arts Center, White Oak fair, the Short Mountain Distillery, the flea markets, etc. I absolutely think and hope we should market all of those things to our benefit. One idea I have had for years would be for us to get businesses and locals to sponsor buying a Cherry tree and plant them all around town and have a Cherry Blossom festival similar to Washington D.C. I think that would generate a lot of people to come when they all got in bloom and people would buy our gas, our food and perhaps other stuff. People could name their tree in honor of someone or an event.
5. We have a very active board who is working behind the scenes to develop, grow and promote Cannon County very much. We have a mission statement and many goals we wish to accomplish, but it will take time and help from everyone here in Cannon County.
Lastly, you asked “What relationship does this board have with the County Executive? Are both entities working together toward a common goal of attracting industry and business to Cannon County?” and I will simply say this.
We (the members of the board) have spent the last nine months trying to right a sinking ship. We have dealt with many different things that are tangible, provable and without a doubt things that had to be done or the citizens of this county could have been on the hook to pay for thousands of dollars without their knowledge or approval. Unfortunately for everyone, some of those things we have dealt with have not been comfortable for some people to accept or admit because it doesn’t make them look good at all politically speaking. I cannot speak for anyone but myself, but I believe that the current IDB members are the most dedicated and determined group of individuals working toward making a difference here in Cannon County that I have ever known.
I invite you and everyone who reads this to come to our meetings on the first Tuesday of every month at 6:00 PM at the courthouse. Meet the board. Learn what we have faced over these past month in our efforts to fix a mountain of debt, lack of income, instability and negligence. We are an open book and would be glad to share everything. Watch as we try to spend the next nine months and years to come being proactive instead of reactive.
P.S. I agree with James that you would make a good board member.
March 18, 2013 at 10:07pm
Corey, Thank you very much for such a thoughtful response. These are answers our county citizens need to hear and understand. Cannon Countians need to hear the good things that are happening and not just all the bad things that make the news. Your responses indicate a new found direction and determination on the part of the IDB to push Cannon County forward. It appears from all you have said that the IDB is exploring avenues of potential never before explored and networking with other counties in the effort to attract industry. I wish the IDB the greatest of success in this effort and feel optimistic that good things are in store for our county.
Thank you Corey and James for your sentiments but I hold no interest in active participation in county government. My interest lies in the stability and well being of our county's future for the generations to come. Please keep up the great work and rise above the temptation to involve politics in the IDB. What you do is for the good of all citizens of Cannon County.
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