Category: Uncategorized

Jackson Law – rubbish or not?

Last November, CM Nick Leonardo introduced an ordinance for Nashville to adopt the State’s “Jackson Law.” If adopted, the Jackson Law would require new and expanding landfills to be approved by a Metro Council ordinance before a state permit could be issued. The legal and policy ins and outs of this proposal are complex. I don’t really have a good reason, but I have put off getting fully up to speed until the bill reached 3rd reading.

Now, 3rd reading is scheduled for May 2. So, I spent the time to learn what I needed to learn. I have decided to support adoption of the Jackson Law. I am going to let you read the ordinance on your own. Council Director Jameson has also provided deep analysis — you can go herehere, and here and search for “Jackson” to see what he has to say. Metro Legal Director Cooper has at least one memo about the Jackson Law also. I am going to run through the major differences. For each issue, I’ll let you know whether I think the existing law or the proposed Jackson Law is better policy for Nashville.

More vs. Less Factors For Council To Consider: Existing law: (1) allows the Council to consider only one factor — location; (2) if the Council’s decision is challenged later, it is easier to uphold; (3) in addition to the Council having one reading, the Board of Zoning Appeals would need to have a public hearing; and (4) there is no way to avoid the Commissioner of a State agency (TDEC) controlling one step of the appeal process.

The Jackson Law would: (1) allow the Council to consider many more relevant factors (GOOD); (2) if the Council’s decision is challenged later, it is more difficult to uphold (BAD); (3) the Council would have three readings (GOOD), but the BZA wouldn’t be involved (BAD); and (4) the TDEC Commissioner would be required to automatically approve the Council’s decision (GOOD).

My perspective is that, if we had parallel universes — one with existing law, and one with the Jackson Law, and everyone performed their respective roles properly, there would be little or no difference in the results under the different laws. However, we know that not everyone will act perfectly, and I simply can’t predict whether the weak link in any future hypothetical scenario would be the Council, the BZA, our Solid Waste Region Board, the TDEC Commissioner, a Davidson County trial court judge, or a State of Tennessee Court of Appeals. Without a crystal ball telling me who among these is going to possibly mess up, I can’t predict what extra protections I prefer. Either of the two technical processes might turn out to be better, or worse, than the other in some unknown future scenario. For this reason, this issue is a TIE.

More vs. Less Formal Notice Mailed To Neighbors: Existing law does not have a strong notice requirement. The Jackson Law has a very strong notice requirement. Obviously, more notice is better than less notice. However, when a landfill is involved, word gets out fast and thoroughly. Practically, I don’t consider a difference in notice provisions significant enough to pick one law over the other. This issue is a TIE.

What Kind Of New Landfills Must Go Before The Council: Existing law requires a Council resolution approving a new Class I landfill (municipal solid waste), but NOT for Class II, III, or IV landfills (industrial, and construction and demolition waste). Under existing law, new Class II, III, and IV landfills get approved by our Solid Waste Region Board, subject to review by the TDEC Commissioner.

Under the Jackson Law, new Class I-IV landfills all must be approved by a Metro Council ordinance. This is clearly superior to existing law. This issue goes easily to the Jackson Law.

What Kind of Landfill Expansions Must Go Before The Council: Under existing law, if a landfill wants to laterally expand its footprint, the Council does not get a say in the process. These expansions get approved by our Solid Waste Region Board, subject to review by the TDEC Commissioner.

Under the Jackson Law, lateral expansions of existing landfills all must be approved by a Metro Council ordinance. This is clearly superior to existing law. This issue goes easily to the Jackson Law.

Solid Waste Transfer Stations: A transfer station is a local site to temporarily store waste until it can be shipped, usually in larger vehicles, to a permanent landfill. Under existing law, a new solid waste transfer station must get the same Council/BZA approval required for a new Class I landfill.

Under the Jackson Law, a new solid waste transfer station is exempt. The advice I have received tells me that the most likely result is that our existing law would continue to apply to requests for a new solid waste transfer station. Because this is “most likely” and not a certainty, this issue goes slightly in favor of existing law.

Solid Waste Processing Facilities: A processing facility is used to change the physical characteristics of the waste, or to remove particular components from the waste. Under existing law, the Council does not get a say in the process of approving a solid waste processing facility. These get approved by our Solid Waste Region Board, subject to review by the TDEC Commissioner.

Under the Jackson Law, processing facilities all must be approved by a Metro Council ordinance. This is clearly superior to existing law. This issue goes easily to the Jackson Law.

The Jackson Law Is All-Or-Nothing: State law does not allow us to pick and choose which parts of the two laws we like. We have to take all of the Jackson Law or none of it. Because the balance of the other factors weigh in favor of the Jackson Law, this issue also goes to the Jackson Law.

Overall, I think the Jackson Law is the better policy for Nashville. If nothing else, adopting the Jackson Law will give the community and the Council more control over new Class II, III, and IV landfills, lateral expansions of existing landfills, and solid waste processing facilities. This makes the Jackson Law the better choice.

April 4 Council Agenda

For the April 4 Metro Council agenda, here’s what I am looking at:

For public hearing

There are two bills (-641 and -642) that were disapproved by the Planning Commission. Since the media coverage in January about how the Council approaches disapproved bills, I don’t think we have passed any disapproved bills on 3rd reading. Usually, disapproved items get approved on 2nd reading on the night of the public hearing, or the sponsor defers to do some more work on the bill. Here, the sponsor of both of these bills is CM Robert Swope. I do not believe he has previously asked the Council to go against the Planning Commission.

CM Angie Henderson’s sidewalk bill (-493) is also set for a public hearing. I am one of twenty-two co-sponsors. Henderson has done an incredible amount of work on this. The bill is complex. I’ll quote Council Director Jameson’s summary of the bill:

The ordinance under consideration would amend these Code sections to support walkable neighborhoods and access to and use of Nashville’s transit system. Overall, the ordinance would close a loophole wherein sidewalk installation has not been required for single- and two-family infill development on major and collector streets in the USD and on neighborhood streets in the UZO or within ¼ mile of a center designated in the general plan. For multi-family and nonresidential development, it would also reduce instances where “in-lieu” payments may be applied and require more physical construction of sidewalks throughout the city as development occurs.

You can read Jameson’s full analysis here (see page 3 for discussion about -493).

Resolutions

There is a non-binding resolution asking Judge Moreland to resign (-642). Since Moreland has now resigned, I am not sure if the sponsors will go forward with this. If they do, I’ll need to abstain from voting. As I explain here, I have had a formal role as a neutral fact-finder in an attorney disciplinary proceeding where Judge Moreland was a witness. I need to maintain that neutrality.

2nd Reading

I am a co-sponsor of CM Jeremy Elrod’s bill that would require additional Council approval for any construction that would require closing or obstructing a Metro right-of-way for more than a year (-498). For me, the goal it to try to address the fact that it remains nearly impossible to walk across downtown without getting stuck having to backtrack to a pedestrian crossing that you already passed, or to cross the street mid-block. We can do better.

We’ve got CM Freddie O’Connell’s bill requiring U.S. Presidents and candidates for the office to provide Metro with their tax returns before they can use Metro facilities (-644). I’ll need to talk to the sponsor about this before I can support it. I’m all for fighting the good fight…but I’m not sure this is it.

CMs Pardue and VanReece have a bill that would allow alcohol to be consumed by passengers in horse-drawn carriages (-645). I want to hear more about this one also. I’ve seen some ‘pedal tavern’ groups that were clearly over-served and pretty boisterous. I’m not sure that level of partying and horses fit well together. I haven’t made my mind up on this one either way.

CM Dave Rosenberg has a bill that would regulate the use of surveillance devices by Metro in the public right-of-way. I’ll say this for CM Rosenberg, I appreciate him thinking about evolving technologies and how they might be used in Metro. This bill is worth reading. Jameson’s analysis says that Rosenberg has been in touch with MNPD about this, and that we should expect a “comprehensive amendment.” I’m looking forward to seeing that.

3rd Reading

CM Erica Gilmore and I are the lead sponsors (along with 24 other co-sponsors…thanks to all of them) for a bill requiring annual reporting by MNPD about traffic stops in Nashville (-483). Instead of having private third party groups trying to compile relevant traffic stop data, Metro would provide the information. This bill passed 2nd reading on a voice vote (so — it was unanimous…), and I expect this to pass 3rd reading.

Our bill to update storm water fees (-588) has reached 3rd reading. I am a co-sponsor. I expect this to pass.

Not on our agenda, but important…

If you are interested enough in the Council to read this post, then you also saw the story in the Scene last week about the impasse between Chief Anderson and the TBI. The bottom line is that the TBI (supported by District Attorney Glenn Funk) want the TBI to be able to conduct a truly independent investigation of any use of force situation involving MNPD. And Chief Anderson disagrees — he wants his officers to be able to conduct a simultaneous parallel investigation at the same time as the TBI’s investigation.

I have three positions on this. First, MNPD clearly has excellent investigation skills. I think we have the best police force in the State of Tennessee. There’s no question about that.

Second, despite MNPD’s capabilities, the best practice in law enforcement is for there to be a single investigation. To say you want parallel investigations is the same thing as saying you don’t want the TBI involved. That can’t be — the Mayor wants the TBI involved, our DA want the TBI involved, and our citizens want the TBI involved. I would bet that our MNPD officers want the TBI involved. I would urge Chief Anderson to accept a single independent investigation by the TBI in these situations.

Second, speed matters. Having this impasse linger is bad for everyone. Let’s get to the finish line on this now.

Latest STRP scam

I’ve stumbled into learning about a scam to get Metro Codes to issue an improper owner-occupied short term rental permit when the property is really a large investor-owned hotel-like property.

Here’s how it works. There is a corporate development company that is setting up multiple LLCs each to own a single property.  In one example, the LLC has a 95% owner and a 5% owner.

The 95% owner is yet another company related to the corporate developer. And the 5% owner is an individual person employed by the development company or related to the owner of the development company. Then the individual 5% owner applies for an owner-occupied permit in parts of town where there are no more investor-owner permits available. This violates the spirit of the law by pushing the number of corporate owned units higher than allowed. This also violates the letter of the law because the individual who is applying simply is not the owner — the LLC is the owner.

These LLCs can’t even keep their story straight about where they “live.”  Every LLC in Tennessee has to provide a “principal place of business” to the Secretary of State.  In two examples I have seen, the supposed owner-occupying LLC listed the parent development company’s downtown business address as the LLC’s principal place of business. So for the State of Tennessee, these LLCs operate principally from a downtown address. But for their short term rental permit application, each “resides” in a different home around town.

These units push the envelope and break at least the spirit of the law in other ways too.  At least one of these homes is being advertised online in a way that indicates the rental is for the whole house, 5 bedrooms, and 10 beds — for nearly $800 per night. The advertisement mentions that 12 is the maximum capacity. But when you list 5 bedrooms and 10 beds, you are clearly sending the message that more than 12 guests is acceptable.

Amazingly, this scam has worked at least twice that I know about, and Codes has issued owner-occupied permits for these properties!

I don’t know whether to more bothered by the clearly intentional efforts to sneak by Nashville’s laws, or Metro’s inability to sniff out a scam before a permit is issued.

It doesn’t matter, I guess.  Either way, the whack-a-mole character of short term rental enforcement continues. I am asking Codes to tighten up their processes to enforce our laws, and not allow an LLC to have an owner-occupied permit.  I am also asking for these two owner-occupied permits to be revoked because the owner (an LLC) doesn’t reside there.

 

Statement about Judge Moreland

I’ve been asked whether I will join the list of Councilmembers asking Judge Casey Moreland to step off the bench while the Tennessee Board of Judicial Conduct investigates recent allegations. I will not be taking a position on this – let me tell you why.

Since before I was elected in 2015, I have served as a hearing panelist for the state board that oversees the conduct of lawyers. When the Tennessee Board of Professional Responsibility charges a lawyer with breaking our ethical rules, the Board appoints a panel of three local lawyers to act as the judge. At any given time, I typically am serving as an appointed hearing panelist for two or three lawyer disciplinary cases.

In 2015, I was appointed to be a hearing panelist in a disciplinary case against Bryan Lewis. Judge Moreland was identified as a witness in that case. We were scheduled to begin a three-day hearing on February 13, 2017. The media has reported that the week before the hearing, the case was resolved when Mr. Lewis agreed to accept a “public censure.” My job in Mr. Lewis’s disciplinary case was to be impartial toward Mr. Lewis, the witnesses (including Judge Moreland), and the facts. Even though Mr. Lewis has accepted a public censure, I am obligated to maintain that impartiality.

According to media reports, the challenges facing Judge Moreland now are connected to Mr. Lewis, and are at least tangentially connected to the situation that led to Mr. Lewis’s disciplinary case. Because of my role as a hearing panelist in the Lewis case and the mandatory impartiality that goes along with that, I won’t have any comment about whether Judge Moreland should continue to serve as a judge in Nashville.

Council Meeting Protest Tonight

The Metro Council meeting tonight was brought to a halt by protesters demanding a response to the shooting death of Jocques Clemmons by an MNPD flex officer. The protest is covered in the Tennessean already, and I expect to see a Scene article soon. You can also follow what happened @joeygarrison and @iamstevenhale. I want to share a few thoughts myself.

First, though, goodness, there’s a lot going on these days. The federal government appears to be on the verge of trying to deport every non-citizen charged with or convicted of a crime. I fear that the DACA kid detained in Seattle, and the domestic violence victim detained in El Paso, soon are going to be the norm and not the exception. For those who might somehow be unmoved by the human and family tragedies that will unfold, be prepared for public safety issues as non-citizens stop reporting crimes, and be prepared for economic consequences as real live human beings get disappeared from our economy.

Then there are the Russians, threats of violence against the Jewish community, inflamed anti-Muslim sentiment, and another season of scorn from the State legislature. Oh, and a public hospital working through financial distress, and short term rentals too. I’m not complaining because I volunteered for this Metro Council gig, but it’s a lot.

Back to tonight. It’s tragic. Jocques Clemmons is dead. The TBI is conducting an investigation, with the FBI riding shotgun. People — residents and law enforcement alike — are on edge. And, it is essentially impossible to describe these events in a way that makes everyone happy. On one side, anything short of saying that Mr. Clemmons was murdered is perceived as an insult. On the other, anything short of saying police officers have the hardest job in the world and this was a justified shooting is perceived as an insult. Although it feels like our language, our words, are failing us, and failing to convince the “other,” we can’t shut down the conversation.

I don’t have all the answers. I do feel though that if an argument doesn’t work, maybe a story will. Here’s one story — it is a story that most of white Nashville needs to hear — and I mean really hear and feel and believe. If you gather together a group of African American Nashvillians and ask them to tell their stories about nephews, sons, uncles, cousins, and husbands getting pulled over by MNPD, you will absolutely believe that African Americans get pulled over at significantly higher rates than white drivers. I can’t be any more plain than this — you can look at the statistics, but they are flat and easy to gloss over. But hearing a group of average Nashvillians who happen to be black look you in the eye and tell you about their experiences is moving. It is a truth that all of us need to hear.

Of course, this isn’t the only story that matters. MNPD didn’t create chronically bad education for minorities in Nashville. MNPD didn’t create poverty that unfairly impacts minorities. MNPD didn’t create the desperation that can sometimes lead to drug use or crime. For too many Nashville citizens, the “It City” is just the place on the horizon where you can catch a glimpse of a skyscraper. “It” isn’t real. “It” isn’t home. Yet, officers have to operate in that environment. It is a very hard job.

After a report last fall about traffic stops in Nashville, Council Member Erica Gilmore and I filed two pieces of legislation. I linked to the legislation when I wrote about it in December 2016. My perspective is that Nashville will find its way through these issues by talking about our stories. The Scene recently had a story that made the point that there is a history of racial strife in Nashville and we skim over that at our peril.

There has to be a public discussion that acknowledges the reality that much of Nashville’s African American population feels either over-policed or unfairly policed, and also acknowledges that we have to figure out how our entire community can be policed fairly and safely. This won’t be easy. It will be hard. But we absolutely have to be willing to have hard conversations in order to find the best way forward.

The Council is full of Type-A leaders. We saw that while the protest was starting. I saw at least a dozen of my colleagues trying to jump in to figure out something. I wanted the protesters to be able to speak — I think having them speak at the end of the meeting was a good result.

My legislation about traffic stops was never supposed to be contentious. Honestly, having Metro simply respond about whether it agrees with the data presented in the traffic stop report, and having Metro update the data once a year, was never going to be anything more than a first small, modest step toward shining a light on the conversation we need.

My guess is that we’ll soon see additional legislation — maybe to move body camera funding into this fiscal year instead of next. No matter what legislation gets filed, my primary objective is to take steps toward having a conversation where stories from the entire community are heard and acted on. There will always be some who simply deny that race ever plays a role, and there will always be some that paint all police officers as racist. But I’m willing to bet that the majority of people who hear everyone’s stories can work together in good faith to move Nashville forward.

Feb 7 Council Agenda

The Metro Council has a long agenda on February 7. I am guessing that the short term rental bills will generate the most public interest. I have put those items in bold so you can skim for them easily. Here’s what I am looking at:

For public hearing

There are two bills (-491 and -555) that were disapproved by the Planning Commission. After some recent media coverage about how the Council approaches disapproved bills, it will be interesting to see if the dynamic changes. Usually, disapproved items get approved on 2nd reading, or the sponsor defers to do some more work on the bill.

There’s another (-559) where the Planning Commission made no recommendation. This one is inside baseball. Currently, for a property owned by Metro, an application to change the zoning can only be initiated by the Mayor or the head of the department to which the property is assigned. This bill would add Council members to the list. One side of this would argue that the executive branch is in the best position to manage Metro’s property as a whole. The other would argue that the legislative branch should be able to start a zoning change on Metro owned property.

Resolutions

At our last meeting, the Council voted to defer consideration of a contract with a software company to help with short-term rental enforcement. That was Resolution -519. Since then, the Mayor’s office canceled that contract and they are putting it out for a competitive bid. I think -519 will be withdrawn.

The Barnes Housing Fund has awarded $8+ million in new funding (-536). I expect the Council will approve this award.

We are being asked to approve up to an additional $16 million for Nashville General Hospital (-538). I have written about this previously. This should be approved.

We are also being asked to approve $540,000 for the Knowles Assisted Living Facility (-539). There has been media attention to this also. Basically, Metro’s effort to privatize the facility has stumbled because the new operator was not up to the task. Metro is trying again. These funds are necessary to pick up the slack from the failed operator while Metro works on getting a qualified transition operator in place.

1st reading

Usually, 1st reading isn’t very interesting because most everything gets passed on to 2nd reading more or less automatically. Let me briefly put a few of the new bills on your radar.

The legislation that created the Downtown Central Business Improvement District is expiring. Bill -580 would extend the Downtown CBID. I haven’t gotten all the details yet, but I understand the boundaries are changing a little, and I understand that the district would become automatically renewing under the new bill.

There is a bill to update Metro’s storm water fees (-588).

There is a bill to provide a financial incentive to Ryman for their new indoor water park facility (-589).

There is a bill to authorize the use of eminent domain to acquire the real estate necessary to realign the intersection of Crestmoor Road and Hillsboro Road in Green Hills (-590).

There are three new short term rental bills (-608, -609, -610). You can read my post from last week about these new bills.

2nd Reading

I have sponsored a short term rental bill (-492). All of the new short term rental bills seem to assume that -492 will pass. That’s good. I filed -492 for two reasons — to fix a few definitions that a Court thought were vague, and to move the short term rental legislation to “Title 17” which allows us to have much-needed public hearings about any changes to the short term rental rules. I hope this passes.

Council Member Jim Shulman has a bill that would have MNPD providing quarterly reports about their extensive community service activities (-525). A few have criticized this bill as somehow creating more work for MNPD. I don’t see it that way. As it is, MNPD is engaged in significantly community relations work. And, if you attend one of their weekly COMSTAT meetings, you can get an update on this work. CM Shulman’s ordinance would demonstrate that the full Metro government stands behind this important work, and that it should be more widely publicized.

This one isn’t super-interesting, but it’s my bill…so, I’ll mention it. Bill -560 updates two parts of the Metro ethics ordinance. In both places, there were incorrect citations to statute sections that had been changed over the years.

3rd Reading

There is one bill (-297) that was disapproved by the Planning Commission by a narrow 4-3 margin. I don’t recall opposition at the Council public hearing, and I have not been getting emails about this from the community. I’ll need to hear out the sponsor and Planning about this.

Council Member Freddie O’Connell has a bill that would require contracts for correctional facility management to be approved by the Council (-542). I am a co-sponsor. CM O’Connell has talked to Sheriff Hall about this, and he is okay with it. I expect this to pass.

 

Three new short term rental bills

There are three new short term rental property (STRP) bills filed for first reading next week. I am not the sponsor of any of them. This post is really me thinking out loud in an effort to understand the new bills. I am calling them the residential phase out bill, the one year moratorium bill, and the three year moratorium bill.

There is a lot in common between the bills. All of them assume that BL -492 (which fixes some technical problems raised in a lawsuit) will pass.  All of them allow existing permit holders to continue in business for now. All of them would halt the issuance of new permits for investor-owned short term rentals in residential areas. All of them will go to the Planning Commission. That means the public will have the chance to speak about all three bills twice – once at the Planning Commission, and again at a Council public hearing.

The residential phase out bill would eliminate new permits for investor-owned STRPs in the parts of Nashville that are zoned residential, and phase out all existing investor-owned STRPs in residential areas by 2021. The one year moratorium bill and the three year moratorium bill would stop the issuance of new permits for investor-owned STRPs in residential areas for one year and three years, respectively. To me, the similarities outweigh the differences — in all scenarios, no current owner goes out of business in the near future, and no new investor-owned units will be allowed in a residential neighborhood.

Beyond what they have in common, I am also struck with the continued desperate need for Metro to improve its enforcement capabilities immediately. If any of these bills were to pass, Metro would still need to track down short term rentals operating without a permit. If any of these bills were to pass, Metro would still need to find the owners who are not paying their taxes. If any of these bills were to pass, Metro would still need to create a real-time noise ordinance enforcement ability to protect neighbors from abuses.

These three new bills will take a few months to work their way through the Planning Commission and the Council. My guess is that hundreds of citizens will end up speaking on all sides of these issues. For now, I think that I will probably not take a position until after I hear from the community. While this is happening, I am going to keep saying that, no matter what we do with the regulations, Metro must keep working at improving enforcement efforts. Metro will need to do better with that whether or not any of these bills pass.

Quick update before Council meeting tonight

Tonight, there is a meeting of the Council Public Safety Committee and its Minority Caucus in response to the Driving While Black report issued in October 2016 by Gideon’s Army.

This meeting is the result of a resolution and an ordinance that I have co-sponsored with Erica Gilmore. The resolution asks for MNPD to let the Council know whether the data in the report is accurate, and whether there is any additional information that the public needs to understand the data in context. The ordinance asks for annual reporting of data similar to what is in the report.

Today, Chief Anderson has provided lengthy materials in response to the report. You can see his letter to the Council, his letter to the public, and some additional statistics for context. I thank Chief Anderson for providing this information.

Chief Anderson’s materials explore the idea that, even though we have community-based policing in Nashville (i.e., do your policing where victims report crime) and minorities are involved in the criminal justice process at higher rates than non-minorities, there is no evidence of a causal link between the two. He explains that any racial disparities in outcomes are a reflection of our broader society.

I appreciate Chief Anderson acknowledging that his department has been “…reluctant to publish parts of this information.” He says (and I agree) that “…for there to be any meaningful improvement in [this situation] there must be candid, maybe painful, conversations across Nashville.”

The reason I proposed the current legislation was to encourage all of us to fully confront any differences between how people of different races experience the criminal justice process in Nashville. Even when the data is “unsettling” as described by Chief Anderson, it is better for Nashville to be unsettled and be talking.

I would like to see my legislation passed as a statement that Nashville and MNPD together believe the right thing to do is to disclose and confront unsettling statistics.

Context for the Upcoming Supplemental Hospital Appropriation

On December 29, 2016, the Hospital Authority voted to request a supplemental appropriation from Metro for Nashville General Hospital. I expect this request to come before the Council on February 7, 2016.

Before the request for a supplemental appropriation gets discussed broadly in the community, I would like to spend a few minutes providing context for the hospital’s finances. My main point is that the hospital’s finances have been challenging for a long time and we should NOT be surprised that they need a supplemental appropriation to get through the year.

I’ll write more about this after the appropriation request is formally made to the Council. For now, I just want to compare a few key financial statistics for NES (which is in good shape financially) and the hospital. By putting these numbers side-by-side, I am not trying to embarrass the hospital. In fact, I think it is amazing that they can keep plugging away with these finances. It is a testament to how much they believe in their important mission that they can make these numbers work.

First, by comparing the amount of bills you owe at any time to your total expenses for the year, you can get a quick snapshot of how you’re doing financially. For example, if you are 6 months behind on the mortgage and a year behind on your credit cards, you are in worse shape than if you are current on your bills.  Businesses often try to stay around 60 days outstanding on their bills.  In the chart below, you will see that as of June 30, 2016, NES’s current bills were just under 60 days of expenses for the full year.  At the same date, the hospital’s current bills were almost a 100 days of expenses.

For the hospital to have gotten down to 60 days outstanding on its current bills as of June 30, 2016, it would have needed an additional $10 million appropriated to it for the current fiscal year.

Second, we have all heard the rule of thumb that families should maintain an “emergency fund” of 3 or 4 months of expenses. And, without that, your family is at financial risk due to the unpredictable circumstances of life.

Let’s look at how NES and the hospital do with this. As of June 30, 2016, NES had enough cash on hand to pay approximately 100 days of expenses — that’s a healthy, appropriate reserve. The hospital had under 4 days of cash available on June 30, 2016.

For the hospital to have had even a modest 1 month of cash in the bank as of June 30, 2016, it would have needed an additional $7 million appropriated to it for the current fiscal year (in addition to the $10 million I mentioned above to bring the days of bills due down to 60 days).

My last financial point is there is absolutely nothing new about this situation.  I took a quick look at Metro’s audited financials for 2005 and 2010. By my math, as of June 30 of each of those years, the hospital had less than 1 day of cash available to it. In fact, in 2010, the hospital had $97 million of expenses and ended the fiscal year with $11,094 in cash.  (I didn’t forget zeros — it was 11 grand!)

In the coming weeks as we discuss a supplemental appropriation for the hospital, there may be some of the usual voices saying “shut it down.” That’s the wrong answer. I think the right answer is to look at what it will take to properly pay down the bills, and properly fund its bank account to help the hospital weather the inherent unpredictability of the healthcare industry.

You can read my previous posts about Nashville General Hospital here and here.

NOTE: All of the dollar amounts in the charts are from pages B-27, 31 and 34 of Metro’s FY2016 audited financials. The percentages and “approx days” calculations are mine.

FY2016 Audited Financials Are Out

Metro’s Comprehensive Annual Financial Report For the Year Ended June 30, 2016, or CAFR, was accepted by the Metro Audit Committee yesterday and is posted online. It’s 320 pages of financial details about Metro. Since I’m still recovering from my rotator cuff surgery, and typing doesn’t feel great, I’ll just hit a few points of interest:

  1. The auditors provided an unqualified opinion — that’s good. See pages 19-21 of the PDF. That means that Metro’s financials fairly present its financial position in accordance with generally accepted accounting principles.
  2. The auditors did not find any material weaknesses in Metro’s financials. This is good.
  3. Metro added some information about tax abatements to the Notes this year. This was voluntary by the administration — it’s not required to be included. It is at pages 153-54 of the PDF, and describes nine current real property tax abatements.
  4. If you want to read up about Metro’s long term bond debt and commercial paper program, there’s lots of detail from pages 96-110 of the PDF.
  5. Metro’s pension plans are discussed at pages 111-131 of the PDF.
  6. Metro’s other post-employment benefits (OPEB) plans are discussed at pages 132-134 of the PDF. This shows the OPEB obligations are funded at 0%.  This will bite Metro at some point if left unaddressed.
  7. There is information about our investment in roads, streets and bridges at pages 155-56 of the PDF. There’s some interesting data about how the quality of our roads and streets took a hit with the flood in 2010, but are making a comeback over time.
  8. The fact that Metro does not have a good, accurate budget for Nashville General Hospital has an impact on the audit.  At page 20, the auditors include a “going concern” note about NGH.  At page 144 of the PDF, there is more detail.  Basically, because we continue to budget about $35 million even though the real cost is higher, the audit has to say, “The Government has budgeted and legally approved an appropriation of $35 million to the Hospital Authority for the year ended June 30, 2017. The Government has also not committed to provide additional funding to the Hospital Authority should such funding become necessary.” If Metro would budget a realistic budget and NGH met the budget, we would likely eliminate the “going concern” comment about the hospital.

Feel free to email me any questions or comments.

That DWB report…

On October 25, 2016, a report entitled “Driving While Black – A Report on Racial Profiling in Metro Nashville Police Department Traffic Stops” was released by Gideon’s Army in collaboration with about a dozen other community organizations. The report claims that data from the Metro Nashville Police Department traffic stop database “…shows that ‘driving while black’ constitutes a unique series of risks, vulnerabilities, and dangers at the hands of the Metro Nashville Police Department (MNPD) that white drivers do not experience in the same way” and “…shows that MNPD’s traffic stop practices impose a severe disparate or discriminatory impact on the predominantly black and low-income communities that MNPD’s traffic stop and search regime disproportionately targets.”

These are serious claims and warrant a response from Metro.

Councilmember Erica Gilmore and I filed a resolution asking MNPD to let us know whether the data in the report is accurate, and whether there is additional data that would help put the report’s data and conclusions in context. We also filed an ordinance asking for traffic stop data to be reported to the Council annually with crime reports that are already required to be produced.

The resolution was considered by the Council’s Public Safety Committee at our last meeting (Nov. 15), and deferred. Several committee members, and the MNPD officer who was present, had not yet read the report, and I was asked by committee members to arrange for Gideon’s Army to meet with MNPD to describe the data and methodology used in the report. Both the resolution and ordinance will be before the Public Safety Committee on Dec. 6.

There have been some developments.

First, there won’t be a meeting between Gideon’s Army and MNPD. I started with Gideon’s Army and the bottom line is that they would want any meeting to be public or recorded, and I wasn’t comfortable with that request. I felt like the scope of the proposed meeting was narrow and sort of technical — just to talk about the source of data and the report methodology. I felt like the presence of a recording device would push all sides to state their formal positions and conclusions rather than focus on actually understanding the data and the methodology. Conversations about a meeting concluded with Gideon’s Army sending me a letter, copying the Mayor, Vice Mayor, and many Council members. As I have told them, I respect their position, but that’s not the kind of meeting I had in mind.

Second, despite the fact that there won’t be a meeting, it looks like MNPD understands what data was used in the report.  On Nov. 29, Chief Anderson sent me a Memorandum, and two reports (here and here). Chief Anderson copied the Vice Mayor and the Public Safety Committee on his email also. In these materials, Chief Anderson supplied the data requested by the proposed ordinance for 2015 (although there is one detail I am trying to pin down with Chief Anderson still).

I want to make sure I am clear about my purpose with the proposed resolution and ordinance. The current public narrative is that: (a) a group of 16 community organizations put out a 213 page report that looks at first blush to be pretty well annotated and footnoted, and apparently written by a variety of credentialed social scientists and others; and (b) other than Don Aaron’s comments quoted in the Nashville Scene on October 25, I am not aware of any substantive response from the Metro government.

I think it is fair for Metro (through MNPD) to respond with “that data is wrong…here is the correct data” or “that data is right, but you really need to also be looking at x, y or z to properly understand what is going on” or “that data is right, and we stand by it because that’s the natural outgrowth of our policing strategies” or something.

The resolution simply asks if the data in the report is accurate and if there is other data we should be looking at for context. And the ordinance asks for traffic stop data to be reported annually with other crime reports that are already required. We should pass this legislation.

That next $10 million…

It costs Metro more than $35 million for Nashville General Hospital to operate. The average annual cost to Metro to operate NGH has been more than $35 million per year for more than a decade.

I understand that the Hospital Authority was created in March 1999 and had a $15 million cash deficit that year. I believe that, through fiscal year 2007 (so, before the Dean administration even), that cash deficit grew to $62 million. Even though the formally budgeted contribution from Metro was in the mid-$30 million per year range at that point, there was average additional cost of at least $5 million per year through those years due to the deficits. If you dig through the Metro audits for these years, you can find all of this.

For me, it is important to note that the public’s perception about cost focuses on the idea that “it costs Metro $35 million per year to run NGH.” I would guess that political pressures on all involved going back to the early days of the Hospital Authority contributed to a popular impression that it costs Metro $30-35 million per year to operate NGH, when really – all-in – it was more.

The fact is that, for whatever reasons, more than a decade ago, the seeds were planted that created the impression that it costs Metro about $30-35 million to operate NGH. The more precise perception would have been that the formal operating subsidy was $30-35 million per year and that Metro spent more than that on average over the years once you took deficits and unpaid payables into account.

I am more interested in having the “all-in” number be the one that gets discussed publicly. I believe the Barry administration feels the same way. I think the Hospital Authority and Dr. Webb agree too. But the long-standing political ground rule that “it costs $30-35 million” is persistent.

With that as background, let me give my answer to each of the questions raised in David Plazas’ editorial yesterday.

Question: Why do we need another bailout?

My perspective is that the use of the word “bailout” is an unfortunate downside to the perception that was created more than a decade ago about the supposed cost to Metro to operate NGH. The average cost over many years has been higher than $35 million. And much of that time was before the most recent, well-documented challenges in medical reimbursement nationally.

NGH needs more than $35 million this year because it historically costs more than $35 million from Metro to operate the hospital, and because medical reimbursements are as challenging now as they have ever been.

That doesn’t mean NGH gets (or wants) a blank check. Obviously, we have to look at how the money is being spent. But I don’t think the traditional notion of “bailout” applies.

Question: Why did Dr. Webb say early this year that the last $10 million was a one-time event?

I can’t speak for Dr. Webb. But my sense is that there were at least two things he had in mind. First, I believe that it was his goal to make it a one-time event. Second, since long before Dr. Webb took over at NGH, one of our local political ground ground rules has been that “it costs Metro $35 million to operate NGH.”

I have shared with Dr. Webb that I am more interested in knowing a realistic all-in number for what it costs Metro to operate NGH – even if the number violates a long-standing ground rule by being higher than $35 million.

Question: Why did Dr. Webb say during the budget process that $35 million would be enough for this fiscal year?

I have the same response to this one. Dr. Webb will need to answer this, but I suspect that the NGH budget for this year was what I would call aspirational.  I think it was likely built to reflect what the results would be if everything broke just the right way – especially with reimbursements for medical services provided. I suspect that Dr. Webb and his team, in an effort to meet the long-standing political expectations that it is supposed to cost $35 million for Metro to operate the hospital, set budget goals that were aggressive.

Question: Why was Metro was surprised by the request? Why were Metro officials caught unawares? Why were hospital administrators not forthcoming?

On this one, I think the Finance Director can best answer the question for Metro.  For me, there was no surprise. It cost Metro $45 million to operate the hospital last year.  And the running average over more than a decade is higher than $35 million.  And lots of hospitals are having reimbursement issues. I was sure there would be a supplemental appropriation request at some point.

I understand that Metro and NGH have had regular, frequent meetings or calls to discuss budget and cash forecasting throughout this fiscal year. I think both Metro and NGH have seen the possibility of the supplemental request coming.

I suspect that NGH, through the first quarter of the fiscal year, was fully committed to the budget I am calling aspirational. I think that, after NGH closed its books for the first quarter (which would have been late October or early November), they saw the handwriting on the wall, and let Metro and the Hospital Authority know that they would need a supplemental appropriation.

Question: Why did NGH brief the Hospital Authority before the Mayor or the Council?

Two things here.  I understand that NGH did talk to Metro Finance in the days before talking to the Hospital Authority. But also, that’s the way the governance structure works.  Dr. Webb and his team report to the Hospital Authority.  As for the Council, Metro Finance let the Council know within a week or ten days about the situation.

Put all together, the NGH management team worked their budget for the first quarter. Those results show trending that will require a supplemental appropriation.  They let Metro Finance and the Hospital Authority know.  Metro Finance let the Council know.  All of that seems to have happened in a matter of several weeks.

Let me wrap up with two final points.

First, don’t lose track of some positives.  I understand that NGH has successfully dealt with all of the Joint Commission issues raised last year. I am told that, over the last two years, NGH has dramatically decreased infection rates, and the rates are now better than national averages. I believe that the medical staff morale is in a good place. These positives matter, and I think the newly re-formulated Hospital Authority will help continue the push in a good direction.

Second, and I’ll be trying to write more about this in the coming weeks, NGH needing more money isn’t the story.  That’s consistent with historic costs. The more important issue is for us (NGH, the Hospital Authority, the Mayor, the Council) to get rid of the long-standing political ground rule that it costs $35 million for Metro to operate the hospital. It’s arbitrary…it gets in the way of proper management and governance. We all need to know the actual all-in cost to Metro, and we need to be able to know that NGH has a realistic budget and can meet that budget.

(You can see what I wrote about NGH earlier in 2016 here.)

New FCC filing in LOU

Here is the new FCC filing in the Louisville OTMR lawsuit.

In my blog post on October 13, I said:

“In Louisville, if AT&T wins the federal preemption argument in their summary judgment motion, it will be good news for AT&T here in Nashville. Due to some nuances in Kentucky law that are different than in Tennessee, the converse is not necessarily true.  If AT&T loses its summary judgment motion, it might be, but won’t necessarily be, bad news for them in the Nashville lawsuit.”

The FCC letter today addresses the nuance where Kentucky law is different than Tennessee law. In Part A of the Discussion, the FCC notes that “Kentucky has invoked the reverse-preemption provision…”  Because of this, argues the FCC, there is no federal preemption of the Louisville OTMR ordinance.

Unlike Kentucky, Tennessee has not made any regulations in this area and so this reverse-preemption argument does not apply in Tennessee. This isn’t a random opinion I am asserting. In Council Director Jameson’s Analysis (see page 19) of OTMR, he said “Although states may ‘opt out’ and assume individual responsibility for their own poles by certifying with the FCC that it does so, Tennessee has yet to submit any such certification.” Kentucky opted out. Tennessee hasn’t.

Today’s filing by the FCC in Louisville: (1) is a good, solid restatement of the known preference of FCC leadership for faster high speed broadband deployment, including policies like OTMR; (2) it does not change any of the FCC regulations that some argue are at odds with OTMR (3) may well influence the Court in Louisville to rule against AT&T’s federal preemption argument in that case; (4) is good news for Google and bad news for AT&T; and (5) is not directly applicable to Tennessee because our state has never chosen to regulate pole attachments and therefore FCC regulations should apply here.

Everyone who is mostly interested in sound bites will gravitate to the extremes of “the FCC just totally validated OTMR in all imaginable ways” or “this means nothing.” Both positions are wrong. The precise points made by the FCC are that they prefer faster broadband deployment, including policies like OTMR and that federal preemption doesn’t apply in the Commonwealth of Kentucky. I assume AT&T would have preferred that the FCC keep its opinions to itself. But the specific FCC opinions stated in today’s filing will not resolve the legal disputes in Nashville.

Comcast sues Metro

The debate over the One Touch Make Ready ordinance has moved from the Council to the courts, and I am moving from advocating about it to analysis of the lawsuits. Here’s an update I wrote a few weeks ago.

Today, Comcast filed suit against Metro. It looks like they are raising basically the same issues that AT&T has raised.

Nashville deserves to have faster, better broadband service. That is what’s best for our economy, our schools, and our families. Unfortunately, this litigation may slow down transitioning our digital infrastructure to high speed fiber and future wireless technologies. I hope for a quick end to these lawsuits.

STRP Case Ruling Today

Judge Kelvin Jones apparently ruled today that Metro’s short term rental ordinance is unconstitutional. Stacey Barchenger and Joey Garrison have the most complete reporting I have seen. You should read their story for background.

There are wildly different perspectives on what the ruling means. The Beacon Center said in a press release that this lower court ruling “is an enormous victory for the Beacon Legal Foundation” and “sends a loud and clear message to cities across the state when it comes to restricting homeowners’ rights in the new economy.” They believe they have defeated all short term rental regulation in Nashville. At the other end of the spectrum, the Vice Mayor and one of my colleagues tweeted late today that they think, without an authorizing ordinance, short term rentals are not an allowed use at all in property that is zoned residential. These are obviously very different perspectives.

Here’s what I think I know:

  • The ruling was given verbally from the Judge in the courtroom. There is no written ruling and apparently won’t be until the court reporter completes a transcript of the hearing. There is no binding order of the Court until it is on paper and signed by the Judge. This may take as little as a few days or as much as a few weeks — so it will be soon either way. But the lack of a signed order at this time underscores the idea that everyone should take a breath and wait to see exactly what is being decided.
  • I am told, and Ms. Barchenger reports, that the entire STRP statute is being struck down. For determining next steps, the precise basis of the ruling matters. Specifically, if it is correct that the basis of the ruling is solely due to vagueness, that can be corrected. There would probably be multiple ways to make short term rental laws very precise in their meaning. Again, seeing a transcript or a written order will be important for people to understand the implications and possible next steps.
  • It is going to take at least a few business days — probably longer — for everyone’s view of the new landscape to come into focus. My initial reaction is that both ends of the spectrum have things to worry about.
  • I’ll start with the side claiming that, without an authorizing ordinance in place, short term rentals are not allowed because: (1) they are taxed as hotels; and (2) hotels aren’t an allowed use in residential districts. The Beacon Center has been making arguments on Twitter about why they think this is wrong. I’ll just mention that I have heard that the BZA apparently ruled sometime in the last few years that short term rentals are an allowed use in residential zones in Nashville. I don’t know if this is true, and that BZA ruling would have been before the State Attorney General stated that short term rentals should be taxed as hotels. Regardless, I suspect that the “short term rentals are dead” argument would have to deal with that BZA ruling somehow.
  • At the other end, there is the argument that property rights are vindicated now, and there are no short term rental regulations in Nashville any longer. This argument has to contend with the possibility that either the lower court, or the Court of Appeals, might allow the ordinance to stay in place pending appeal. The plaintiffs might also be the dog that caught the bus. They clearly succeeded today, but based on my conversations this afternoon with multiple investor-owned short term rental operators, this decision creates massive uncertainty about what happens next. Uncertainty is bad for business.
  • Five minutes after I learned about the ruling, I got a call from the Tennessean and told them, “If the thought is that the law regarding investor-owned short-term rentals is vague, that sort of pushes us toward having no regulations or outlawing them completely.”
  • Now I’ve known about this for almost 9 hours, and I think I still feel the same way.
  • For better or worse, Nashville came up with a set of rules that tried to balance the desire of some to run a short term rental business in their residential real estate with the desire of their neighbors to enjoy their neighborhood free of sometimes distracting business activity. Now we have a judge telling us that our attempt to find that balance failed and that it is unconstitutionally vague. That is probably going to force us to take a side — to decide that short term rentals are an allowed, unregulated use for a residence, or to decide to prohibit that use in a clear, non-vague way.

My inbox and phone blew up when the ruling came out. I’m going to see what the actual court order says when it comes out. I’m going to listen to what Metro Legal has to say about the impact of the ruling and about options for Nashville. I’m definitely going to hear from a whole lot of Davidson County constituents about what they think should happen next. I’m not going to rush to a decision about any of it — it’s been less than half a day and there isn’t enough information available to make a decent decision, or to even know what all the questions are.