Tag: council agenda

Metro’s Health & Ed Board

Over the last four years, I’ve worked to shine light on the darkest corners of Metro government. The toughest nut to crack so far has been an organization called “The Health and Educational Facilities Board of The Metropolitan Government of Nashville and Davidson County, Tennessee.” This post is to let you know where I am with this project. I’m going to do my best to state facts. You can draw your own conclusions.

What is Metro’s Health & Ed Board?

Under Tennessee state law, a health and education facility corporation — or health & ed board — may be created under certain circumstances. To create a health & ed board, a city must first pass legislation authorizing the creation, and then the city must choose the directors.

Once created, a health & ed board may issue tax exempt bonds for certain purposes for the public good. While state law requires that a city cannot be liable for any bonds issued by a health & ed board, the bonds are issued on behalf of the city.

The Metro government granted permission for the formation of a health & ed board in Davidson County by Council resolution adopted July 16, 1974. The Health and Educational Facilities Board of The Metropolitan Government of Nashville and Davidson County, Tennessee was created on August 12, 1974 upon the filing of a Certificate of Incorporation with the Tennessee Secretary of State by the law firm of Griffith and Stokes, which is a predecessor firm to the Nashville office of Adams and Reese LLP.

Is it a part of the Metro government?

Metro’s Health & Ed Board has a presence on Metro’s web site. The Metro Council appoints the directors of the Health & Ed Board. The Board meets in the Council committee rooms. The tax exempt bonds are issued on behalf of Metro by the Health & Ed Board. Despite all of these indications that it is a part of the Metro government, it is a separate entity created under state law and is not included in Metro’s financial statements.

Also, the best information I have is that Metro has never provided any significant administrative assistance to the Metro Health & Ed Board. Instead, Adams and Reese and its predecessor law firms have provided administrative assistance and record-keeping from 1974 to the present at no charge. They do charge for any legal services they provide to the board.

Why should you care?

About one year into the current Council term, in October 2016, a vacancy on the Metro Health & Ed Board needed to be filled. The Council Rules Committee had several first term Council Members at the time, including me. When we were doing our homework before the meeting, several of us realized we had no idea what the Health & Ed Board was and we couldn’t find any information online other than a list of the board members.

Starting then, and for approximately six months, I attempted to work through the board’s only staff — its outside private lawyer — to get agendas and minutes posted on the Metro web site. I was ignored. Ultimately, I threatened a public records request and the Metro Health & Ed Board finally started posting its agendas and minutes on its Metro web page.

The fact that my request was stiff armed for so long got me interested in figuring out what was motivating the resistance. Of course, I don’t know the answer to this. But my suspicion then and now is that the law firm must be making money and didn’t want to risk that. For that reason, I have consistently encouraged the Health & Ed Board to make all of their board materials publicly available, and also conduct a periodic RFP or RFQ process for their admin and legal services. To date, the Health & Ed Board has rejected these requests.

The only remedy the city has to force transparency is to wait for board members to roll off and make new appointments who will increase the transparency of the Metro Health & Ed Board.

In fairness, I will mention that the lawyers for the board are quick to mention that even though “Metro” is in the title, the Metro Health & Ed Board is not part of the Metro government. My consistent response is that with Metro fully responsible for making board appointments and with Metro’s name being used to issue tax exempt bonds, the citizens of Davidson County are entitled to the same level of transparency that would exist if this board were fully a part of Metro.

What’s the latest?

Because my requests over the years to provide more information went unanswered, CM Dave Rosenberg and I passed a resolution by unanimous vote on January 15, 2019. The resolution asked the Metro Health & Ed Board to post its board materials online and to also make its debt reports to the State of Tennessee available online. The state-required Report of Debt Obligation is a form that provides basic information about each bond issuance — including how much the lawyers make from the deal.

As I understand it, the Metro Health & Ed Board has declined the requests made in our resolution…

I’ll keep asking for their board materials to be posted. But I’ve decided to stop asking for the debt report forms. I went to the State of Tennessee and got the debt report forms for the last two years. These aren’t available online with the State…you have to ask the State for them. I’ve posted a summary and the two years of forms on this page. In the most recently available two year period, my math shows that the law firm was paid approximately $624,000 for legal services related to the Metro Health & Ed Board issuing bonds.

I’ve got another three years of the debt report forms in my Metro Inbox if anyone wants to do a records request for them. I haven’t looked at them yet.

 

 

Council Feb 5 Agenda

The Council has a full agenda on February 5. It includes several items that are guarantied to make someone mad. Here’s what I am looking at (in the order they appear on the agenda):

Public Hearing

Murphy Road developmentBL -1357 and -58: This is the proposed development on Murphy Road near West End. I believe the developers have met with the neighbors and that discussions are ongoing. I understand that CM Kindall will defer the public hearing again.

Resolutions

NES round-up, RS -1508: NES has a program where customers may opt-in to rounding their monthly bill up to the nearest dollar and allowing NES to use the extra cents to fund its low-income weatherization program, Home Energy Uplift. This non-binding resolution would ask NES’s board to consider transitioning to an opt-out program instead. If NES switched to an opt-out program, all bills would be rounded up to the nearest dollar unless the customer opted-out. This is consistent with other large cities in Tennessee. Supporters argue that this is a relatively harmless way to fund an important program. Detractors feel like it a bit like taxing people without them realizing it. Since the program would come with the ability to opt-out and, by definition, it involved less than $12 per year, I’ll vote in favor of this.

Surplussing property to new community land trust, RS-1570: This resolution would send surplus Metro property to our new community land trust (CLT) for future use as affordable housing. This is a tremendous step forward — and a lot better than selling off Metro’s valuable property to make ends meet temporarily. But this is the first surplussing for the CLT and I’ll have some questions at our committee meetings. I’ll want to make sure I understand the process, how long any units built will be affordable, and how these properties interact with our short-term rental laws. Depending on the information we get in committee meetings, I may vote in favor or to defer one meeting to make sure everyone understands this new process of getting properties into the CLT.

Asking Jill Speering for an apology, RS -1597: This one is guarantied to make a lot of people mad. You can read the Tennessean’s coverage of the back story here. The problem, from my perspective, is that there are some people who have been raising legitimate questions about MNPS and Dr. Joseph’s leadership, and then there are others who tend to not talk about the merits and instead talk about Dr. Joseph being “scary” or “intimidating” or having a “crew” to enforce his will. The second group of critics, to my ear, have helped to inject a race element that’s damaging into the dialogue.

Almost a month ago, I called out the second group as being out of bounds:

Back to the pending resolution…with all respect to those defending Ms. Speering’s text message statement, the intent to the statement is beside the point. In the context where some are raising well thought out concerns backed by evidence, but others are using rhetoric that rings of stereotypes, her statement was wrong. And, as I understand it, Ms. Speering has not publicly expressed any regret for the statement or how it has been interpreted.

Having said all that, I don’t know yet how I’ll vote. I’ll abstain because I’m not that interested in opening the door to a lot of future apology seeking, or I’ll vote in favor because my personal opinion is that some public expression of regret would be appropriate.

Censure the former mayor? RS -1598: This is another one that will make some people mad whichever way it goes. Opponents of this resolution say the Council is beating a dead horse and suggest that the former mayor has suffered enough for what she did. Let me try to get the debate framed by facts.

First, the Metro Board of Ethical Conduct received a complaint while she was still Mayor. In December 2018, that complaint was resolved by the Ethics Board and it recommended that the Council censure her. Under Metro’s laws, once the Ethics Board makes a recommendation, the Chair of the Council Rules Committee “shall” file a resolution for the Council to consider the recommendation. Hence, we have the current resolution.

Now, there are some (perhaps including Metro Legal) who feel that the Ethics Board lost jurisdiction once she resigned, and that the complaint should’ve been dropped at that time. Remember, Metro Legal had a conflict of interest and the Ethics Board used outside legal counsel. That outside legal counsel recommended that the Ethics Board continued to have jurisdiction to make a decision after she resigned. What should we make of the fact that Metro Legal probably thinks there was no jurisdiction and outside counsel thinks that there was? Well, I’ve read Metro’s ordinances on this and, wearing my lawyer hat, my expert opinion is that the drafting of the ordinance was crap. I think the best reading is that there is continuing jurisdiction to consider a complaint after someone resigns, but it was poorly drafted and could use clarifying one way or another.

The fact is that the Ethics Board did make a recommendation and under Metro law the Council “shall” consider it. We can either vote no (either because you think the Ethics Board should have dropped it after she quit or because you don’t think she should be censured) or vote yes (because you think admitting a felony also warrants a censure). Either way, this ridiculous episode will finally be over. I’ll keep listening to my colleagues. But for now, I plan to vote to adopt this resolution.

2nd Reading

Match affordable housing funding to job credit funding, BL -1472: This bill would require setting aside $1 of affordable housing spending for every $1 of job credit spending. In particular, this is aimed at the upcoming legislation to approve job credits for Alliance Bernstein and Amazon. For several reasons, I’m opposed to this. To start, I have been consistently opposed to what I call silo-izing Metro’s budget. I think that slicing and dicing the budget with a ton of required micro-spending cuts into the city’s ability to be flexible and match the needs of a particular year. Beyond that, this is really just disguised opposition to the job credits, I think. From my perspective, if you don’t like the job credits, just vote ‘no’ on them. But passing this bill would just make the job credits literally twice as expensive to the city AND cut down on flexibility in future years.

I don’t know how I’ll vote on the Alliance Bernstein or Amazon job credits — we’ve not seen that legislation yet. But I don’t think doubling the cost of the job credits is the right direction. I think I’ll vote against this bill.

Surplussing $5.4 million of real estate for schools budget, BL -1476, -1477, -1478, -1479: Folks, this is part of the “belt-tightening” that Mayor Briley told us about last year. Instead of properly funding the government from its tax base, the proposal is to sell off one-time assets to make money to balance the budget for the year. The Council can either vote in favor and participate in unloading valuable assets that will never be recovered, or we can vote against and help put a bigger hole in the MNPS budget. Both options are bad.

Among the many reasons why this is a bad way to run a city are: (1) all potential buyers know Metro is in a hurry to sell (which tends to drive price down); (2) at least one of the parcels would benefit from  more dense zoning, but it’s not clear whether Metro has time to do that (which may tend to drive price down); (3) nobody is making more land — once these are sold, they are gone forever; and (4) Metro is losing an opportunity to discuss whether affordable housing would be appropriate on these parcels.

Honestly, I don’t know yet whether I’ll vote ‘no’ to protest this method of balancing the budget or vote ‘yes’ to make sure MNPS’s minimal budget this year gets funded.

3rd Reading

Nashville Yards participation agreement, BL -1442 (as amended): This bill would approve Metro paying for approximately $15 million of the proposed $80+ million in infrastructure improvements related to the former Lifeway campus. This bill has gotten some push back because it is downtown and because Amazon will move there in a few years.

My perspective starts with “This isn’t tax increment financing.” Instead of giving away all new property tax revenue for up to 30 years, Metro will make the upfront investment and keep all of the property tax revenue going forward. There should be more agreements like this where Metro and developer share in the infrastructure costs, especially downtown. These agreements allow Metro to get long-sought after infrastructure improvements without Metro having to pay the full cost.

Also, keep in mind that these agreements are not limited to downtown. For example, in Antioch where I-24 and Hickory Hollow Parkway meet, Metro has agreed to pay half ($12 million of $24 million) to improve the interstate exchange. Like with Nashville Yards, that interstate exchange participation agreement was a once-in-a-generation opportunity to dramatically improve the infrastructure in the area for everyone. I’ll vote in favor of this cost-sharing participation agreement.

 

Will the Council get the Donelson TOD right?

I’m prepping for the Council meeting this week and see the proposed Donelson transit-oriented development district up for 3rd reading again.

I’ve worked hard trying to make this legislation better over the last half year or so. I have decided however to vote against it. I hastily put together two posts about this before the 4th of July holiday. One critiques the financial assumptions underlying the plan, and the other explains why I’ll vote against it. The summary is that this legislation would intentionally spur $300 million of development over a decade without Metro getting any revenue for important services in return. I think this would be irresponsible. A few weeks later, I’m still a ‘no’ on this…but I want to take another crack at talking about how weak the financial assumptions are.

This Metro Council and prior Councils are often accused of too easily letting tax revenue get side-tracked into development dollars. This Council and prior ones also are accused of just going along to get along – especially on complicated financial matters. This legislation is a good example of what successive Councils have passed. A year ago, I think this Council would’ve passed this too. I hope we go a different path now.

To get projects like this created, you start with a great goal. Here, Donelson understandably and deservedly wants a library and coherent development for its historic downtown area. That is a great goal. And then you present the Council with a 22 page single space plan that has lots of details and looks very official. From there, momentum is gathered and legislation is passed.

But let’s look at the financial assumptions behind the proposed plan

This proposed tax increment district will capture ALL new property tax revenue in the district. This is true for existing buildings and new construction in the district. All increases in tax revenue will be side-tracked and none can be used for Metro’s operating expenses until development loans get paid off. This is a new way to do tax increment financing in Nashville. Every other TIF district in Nashville only captures new revenue from individual properties that have TIF loans on them. In calculating the revenue from this new approach, MDHA has assumed that tax revenue will grow by 6% per year for each of the first 10 years, and then 5% per year for the remaining 20 years of the proposed plan. These assumptions are wrong.

(Please be careful to distinguish between appraised property values and tax revenue…they are not the same thing…the former is the value of the property if it gets sold, and the latter is how much tax revenue Metro gets from the property each year…)

First, common sense and our recent collective experience tells us that 5-6% compounding annual growth in tax revenue for every property is not realistic. Metro’s operating budget crunch has been caused in large part by property tax revenue for existing buildings being lower this year than last year. Metro has increased its tax rate only once in a dozen years. Intuitively, it doesn’t make sense to assume 5-6% tax revenue growth compounding year after year for 30 years.

Second, just for a data point, I took a look at the tax records for One Nashville Place, the R2D2 high rise office building downtown at 4th and Commerce. Built in the mid-1980s, its total appraised value in 1990 was $33,299,200.00. With the tax rate at the time of $4.81, the property tax revenue should’ve been $640,677 for 1990.

In 2018, the building’s total appraisal value was $89,245,284.00. Higher for sure, but with the tax rate now at $3.155, the property tax revenue is 2018 was $1,126,275.

In the dead center of downtown Nashville, over these 28 years, this would mean that the appraised value of One Nashville Place increased by about 3.6% per year while tax revenue increased about 2.0% per year. If this is what nearly 30 years of explosive growth downtown gets us, assuming 5 or 6% per year of compounding property tax revenue growth just doesn’t makes sense.

You may ask, “So what? Who cares if some sheet of numbers is wrong?” Here’s why – once you use more realistic tax revenue growth assumptions, there is no new money for Metro’s operating expenses coming from this area for many, many years – probably more than a decade I estimate. This project would intentionally spur $300 million of new development over the next decade and generate no new money for Metro to provide basic government services like schools, police, or fire protection. This would be irresponsible. When coupled with a poorly set property tax rate, this is how Nashville gets A+ gleaming development and has to renege on employee raises.

Finally, remember that these districts are beyond the Council’s control once they are created. If we pass this legislation, the Council will never be consulted on a single TIF loan in the district. If we pass the legislation, the Council can never make changes to the Donelson transit-oriented development plan unless MDHA also agrees to the change. Because of these factors, this legislation has more permanence that most of what the Council does.

I appreciate all of the hard work that has gone into this legislation, but I can’t support it.

What was in the soccer stadium bond resolution?

It looks like the Council has a new ordinance to consider on first reading next week that is aimed at removing the 10 acres of development from the soccer stadium deal.

When thinking about this latest effort to remove the 10 acres, I think it is worth reviewing what the Council actually passed last year.

Here’s what passed: Substitute RS2017-910. Everything that is underlined was added due to negotiations between the administration and Council members.

Many of you know that I negotiate and litigate complicated contracts for a living…most of the changed/added language came from me and was supported by my Council colleagues. I mention this only because I am very clear that my central goal in the negotiations was to beef up the conditions required to take place before any bonds could be issued to build a stadium. In particular, it was clear that the legislation was going to be approved (it passed 31-6). And just like what I would recommend for a private paying client, if you are going to do a deal, you want the “conditions precedent” to you spending money to be clear, robust, and meaningful.

The final legislation added many new conditions. Some of them are:

  • Added the requirement of a signed development agreement absolutely limiting Metro’s obligations to $225 million with cost overruns to be paid by the team.
  • To protect the historic uses of the Fairgrounds like the popular flea market, added a requirement that the team’s lease includes a reasonable mechanism for resolving scheduling disputes for the facilities and parking.
  • Added a guaranty requirement if a controlling interest in the team is transferred to someone new.
  • Added a requirement that the Fair Board approve the demolition of the structures at the Fairgrounds necessary to construct the stadium.
  • Added a requirement that the Council approve an ordinance with 3 readings and with 27 votes authorizing the demolition of structures at the Fairgrounds necessary to construct the stadium.
  • Added language clarifying that the Council would need to approve the zoning and the site plan for the 10 acres.

Especially with these last two bullet points, the Council already negotiated for itself the absolute right to refuse to allow the current structures from being torn down, to refuse to approve whatever new zoning will be sought, and to refuse to approve any site plan for the 10 acres.

This saga is going to unfold in the next few months. The team is trying really hard to be a good neighbor, including working on a meaningful community benefits agreement. Yet there continues to be opposition to the 10 acre development.

The team and the administration are going to be trying to meet these conditions over the next several months. Each Council member will have to weigh the perceived benefits and costs of having a soccer team in Nashville. My advice would be for the Council to rely on the protections we already negotiated for ourselves in the original resolution rather than attempting to make the process more chaotic with new after-the-fact conditions.

BL -983 about economic incentives

Bill -983 is sponsored by 22 Council members and is set for 2nd reading in the Council tonight. The bill would create new reporting and enforcement mechanisms for economic incentives. I think the motivation behind the bill is great. I think big parts of it are great. But I voted against it in our Budget & Finance Committee last night.

Since the bill has 22 sponsors and passed Budget & Finance last night by a 10-2 vote, I wanted to explain my position against the bill.

The bills has four main components — it requires an incentive recipient to predict in advance of its project the number of jobs that will be filled by Davidson County residents and the wages that will be paid, it requires the predictions to be incorporated into the formal incentives agreement each recipient has with Metro, it requires quarterly reporting after the incentive starts, and it empowers the Council to cancel the incentive if the recipient fails to comply with the predictions.

As things stand today, every incentives recipient has a formal agreement with Metro, and there are different degrees of enforcement or claw backs built into each contract.  Importantly, the Metro Council has to approve every incentives agreement before Metro can enter the agreement.

I am all in favor of standardizing the information we receive before an agreement is signed. I am in favor of continuing to strengthen the enforcement mechanisms in our incentive agreements. However, I don’t think it makes sense to shift enforcement from the executive branch to the legislative branch of Metro government. I don’t think it makes sense to have 40 Council members reviewing quarterly reports and also then deciding whether to pull the plug on the incentive agreement. I think it is much better policy for the Council to focus on our existing power to review and approve all of these contracts before they go into effect.

Tried to condemn white supremacy this evening…

After the events in Charlottesville over the weekend, I submitted a late-filed resolution condemning white supremacy.  You can see it here.  Multiple additional Council members signed on as co-sponsors.

Under our Council rules, because it was late-filed, I had to move to suspend our rules in order to consider the resolution tonight.  Under the rules, if two members object, the rules cannot be suspended.

When I moved to suspend the rules, Council members Pardue and Vercher objected. So the Council could not consider the resolution tonight. Immediately after this, two other late-filed resolutions were considered — including one to honor the birthday of Jerry Lee Lewis. Both of these other late-filed resolutions were allowed to proceed and they were passed by the Council.

I plan to file the resolution for consideration at our next meeting. I am not going to let this just go away. It is too important.

 

UPDATE (August 24, 2017):

34 of 39 Council members have come together to denounce white supremacy. We issued a press release today, and a matching resolution will be on our September 5 agenda.

 

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.

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.

 

October 18 Council Meeting

Here’s what’s up on October 18:

Resolutions

Bridgestone givith: A resolution (-398) to accept artwork being donated by Bridgestone to the Metro Arts Commission.

Bridgestone taketh: A resolution (-399) to extend the $500 per employee incentive for Bridgestone to a new location on Hickory Hollow Parkway. This is expected to apply to approximately 415 new positions.

Tracking marijuana law enforcement: I am co-sponsoring a resolution (-408) that would ask the Metro Nashville Police Department, the District Attorney, and the Circuit Court Clerk to work together to track statistics showing the rates of civil and criminal citations, by race and gender. Read more here.

First Reading

USD expansion: The Mayor and Council Members for Districts 7-9, 13-15, and 31 have filed an ordinance (-455) to expand the USD.

Second Reading

The next 21st Century technology bills: In November, we’ll have a public meeting about an ordinance (-415) that would give Planning the power to have a say where wireless transmitters are located in Nashville. Over the next several decades, we are going to care a lot about where wireless transmitters are located. While we are waiting for that bill to move forward, there is a franchisee who wants approval to put up wireless transmission towers now.  That ordinance (-302) is set for 2nd reading.  I have been told that this franchisee is committing to comply with whatever Planning-related rules we end up passing related to wireless transmission facilities. If that’s the case, this should be approved.

Short Term Rental Properties: Wrote about this here.  I expect to indefinitely defer my bills about maximum occupancy (-375) and maximum density (-382) pending the recommendations of the consultant being hired by the Mayor’s office.

Technical correction to an affordable housing bill:  Failed to attach the final draft of an exhibit to a bill passed in early September.  Getting that fixed with a new ordinance (-435).  Oops.

Third Reading

Tenant conduct lease clauses?: CM Hastings has an ordinance (-308) that would require landlords receiving money from the Barnes Housing Fund to add tenant conduct clauses to leases. On the one hand, based on what I have seen throughout my law practice, the proposed tenant conduct language is pretty standard stuff that is already in most residential and commercial lease agreements. On the other hand, the fact that this is applying only to landlords who receive Barnes Housing Fund money (and not TIF money, or PILOT money, or the Mayor’s new affordable housing incentive money) is coming off to some as discriminatory against one group of lower income tenants. I know that CM Hastings has no bad intent at all. I’m not sure how this one will shake out.

Council reports to be posted and be searchable: I am co-sponsoring this ordinance (-416) with CM Cooper to require that all reports required to be given to the Council be posted online in a searchable format.

Bordeaux long term care lease: This ordinance (-422) would approve a new lease of the Bordeaux Long Term Care facility to Signature Healthcare through mid-2020. This is the next phase of Metro exiting the long term care business. We’ll need to keep spending money as we exit, but I think the economics of this deal are fine. I understand that there are ongoing conversations between the administration and some Council Members about what Metro can do to be assured that Signature provides an appropriate level of care at the facility.

Bonus Issue

There’s media coverage today about the Metro pension. The pension is 92% funded, which is good. The pension has an annualized return of 7+% over a ten year period, which is good. The pension’s return compares well to other similar pensions, which is good. But it has a non-traditional asset allocation and that’s what the story in the paper today is about. We should want to learn more about the asset allocation choices that are being made. But, I’d much rather be reading this story than one about an ordinary asset allocation model with terrible long term returns.

My STRP Bills On The Council Agenda Next Week

I have two short term rental bills that are set for 2nd reading next week — one is about maximum occupancy for a unit, and the other is about how many units can be in any one part of town.  (There’s a third bill pending also — CM Burkley Allen is the lead sponsor on that one.)

In response to many in the Council (including me) asking for better enforcement of our existing laws, the Mayor announced last week that Metro is hiring a consultant that “will make recommendations related to staff size, organizational structure, work shift assignments, as well as proactive property maintenance code administration and enforcement by the end of 2016.” This will include a review of all enforcement efforts related to short term rental properties.

This is welcome news. About the only thing everyone has agreed on is that Metro needs better enforcement of these laws. I’m also glad that the turnaround time will be quick so we can have a report back by the end of the year.

In order to give this process a chance to play out, I plan to defer my two bills indefinitely.

 

Sept. 20 Council Meeting

The Council still has a lot going on. Here’s a quick summary:

One Touch Make Ready

You all know what this is.  The bill is on 3rd reading. Council Member Weiner has proposed a resolution related to OTMR. I also am proposing an amendment that would allow, under some circumstances, for the costs of any litigation to be absorbed by a new attacher.

Since the Council Rules don’t allow amendments on 3rd reading for this bill, I would need to successfully get the Rules suspended for my amendment to be considered.  Never say never, but it only takes two objecting Council Members to stop the Rules from being suspended. So, it would be pretty easy for just the lead sponsors to stop my amendment from being considered — if that’s what they would prefer.

I’ve written previously about this topic here, here, here, and here.

Short Term Rental Property

There are three bills on 3rd reading — 257 (about stop work orders and the penalty for operating without a permit), 373 (about posting a permit number online), and 374 (about verifying an STRP application under oath, and adding a statement to the application about homeowner’s association rules).  I expect all of these to pass on 3rd reading. At the request of some STRP owners, I will try to add an amendment to 373 to allow the alternative of posting an image of a permit. Either way, the permit number will be required to be included in online advertisements.

There are three others on 2nd reading — 375, 381, and 382.  Don’t get too attached to the text at these links — I expect all of these to have fairly major amendments or substitutes offered on Tuesday. I think that each then will be deferred to allow more time for public conversation about the newly proposed provisions.

Marijuana

The bill to offer law enforcement in Metro the option to give a civil citation or make an arrest for small amounts of marijuana is set for 3rd reading. It passed easily on 2nd and I think it will pass on 3rd also.

The impact of current marijuana laws is unfairly focused on minority groups. That’s really bad. But I have been concerned about whether the new law (that gives discretion to either arrest or give a citation) will make that unfair enforcement problem worse. The lead sponsor has said that he intends to follow this closely after the bill is passed to make sure that the discretion to give a citation or make an arrest is not exercised unfairly. So, I voted for this and will again on 3rd reading.

Fair Deals?

There are always several items on the agenda that I want to know more about just to make sure I understand the deal.  RS2016-373 would amend the terms of a fire hall property on Richard Jones Road. RS2016-378 is about an economic impact study on certain historic properties in Nashville due to placing “Distributed Antenna System Nodes” around the county.

And, on second reading, BL2016-388 relates to the Metro Health and Educational Facilities Board (a new one for me) entering a Payment In Lieu Of Taxes agreement for land on 12th Avenue South. I’ve asked for the various exhibits mentioned in the bill — you can’t tell much from the bill itself.

On 1st Reading

CM Cooper and I have introduced a bill that would require all reports that any Metro agency has to give to the Council to be posted online in an electronic format. That doesn’t happen now.

I also have a bill on first reading that mirrors my proposed amendment to the OTMR ordinance. If I am not able to get the Council Rules suspended to consider my amendment, I’ll still have this new bill that would have to be considered on subsequent readings.

And, the Gulch pedestrian bridge bill is on first reading also. I’m sure that will draw attention in the coming weeks.

New STRP Bills

I am the lead sponsor on three short term rental property bills that are set for first reading on August 16. My goal is to find a better balance between commercial STRP operations and neighborhoods.

The media has covered the growing debate over short term rentals. Neighbors complain about living next to party houses. There are stories about people with young families choosing to leave Nashville rather than have to live next to a short term rental with new strangers there every week. You can read more here and here. Nashville does not have a good balance between investor owned short term rentals and their neighbors.

The first bill requires all online advertisements to include the STRP permit number. This will help with enforcement. The second bill requires permit applications to be made under oath and include information about home owner association rules. Again, this will help with enforcement. It is hard to predict, but I don’t expect much opposition to either of these.

The third STRP bill clarifies that short term rentals are subject to the same occupancy rules as long term rentals.  For a long time, Nashville zoning laws have prohibited more than 3 unrelated people from sharing a residence.  The short term rental law passed last year conflicts with those zoning laws by allowing higher occupancy.  This conflict needs to be cleared up.

This bill goes to the heart of the heated debate going on between investor STRP owners and neighborhood advocates. The investor owners focus on their tax-paying businesses providing an important service to Nashville. Neighbors focus on not wanting to live in what is essentially a motel district. I think we need to go ahead and get to the bottom of this issue. What do we value more – long-standing occupancy rules designed to maintain the residential character of neighborhoods or growing a new business model that places tax-paying businesses in the middle of neighborhoods?

Clearly, from the way I frame the debate, I have a bias. I think there is value on both sides. But between arguments of equal merit, I would consistently lean in favor of preserving the character of neighborhoods. I want the Council to have this debate. I want my colleagues to hear from their constituents. I have confidence that the process will work. Maybe my colleagues will embrace this, maybe they won’t – either way, we will have the issue resolved.

Since the Council agenda came out earlier this week, I have heard from five investor owners. Two live in the county.  One is a long-time close friend. My friend is pretty unhappy with me for this proposal. She made me promise that I would give voice to her objections. I’m going to do that here – along with my response to each. These are the arguments I have heard from her and the others:

This is an enforcement problem with Metro Codes: Yes, but…  I am sympathetic to the argument that, if Metro Codes had more resources, they would be able to enforce existing STRP laws. However, as a pragmatist, I don’t think we are going to get perfect enforcement.

Codes doesn’t have employees that work on Friday and Saturday nights. They can’t enforce STRP rules in real-time. The result is that Codes has a limited amount of time and resources to enforce these laws. If Metro were to increase Codes’ budget, STRP enforcement wouldn’t make the top 5 list of things to spend more money on. It just wouldn’t – Nashville’s historic growth has taxed Codes immensely and there would be other fish to fry if Codes had more resources. Politically and practically, I just don’t see a scenario where a squad of Codes inspectors is out cruising Germantown and East Nashville for rogue STRPs. Unfortunately, this leaves us having to pick between unpopular options – leave the status quo or attempt to clarify and reshape the rules to see if we can give Codes the ability to provide more enforcement with their current resources.

But, I follow the rules – why punish me? See the last point. I am very sympathetic to this. I don’t enjoy raising topics that make my friends unhappy. But if we can’t expect complete real-time Codes enforcement, we must have the policy conversation about whether to leave the status quo or reshape the rules to find a different, hopefully better, balance.

This will drive investor owned STRPs out of business: Some people say that different rules will drive investor owned STRPs underground. Some people say it would force them out of business. Obviously, both can’t happen – if the business model gets more difficult, it would have to be one or the other. Either way, if evening the playing field between short term and long term rentals were to make someone’s business model harder, I would be ok with a sunset or grandfather provision that would allow the field to be evened over time.

This will drive investor owned STRPs underground: See the last point.

I pay property taxes: Thank you for that, but property taxes get paid no matter what the use of the property is.

I pay STRP taxes: Yes. Any policy decisions need to weigh the potential loss of STRP tax revenue against perceived gains in neighborhood quality of life.

I invested in reliance of the law being stable: Respectfully, to my friends who are investor owners, I know you all owned a bunch of these units before there was an STRP law in Nashville. Yes, many of you have doubled down and bought more units after the law passed; but many, many investors got into the business before there was any STRP law in Nashville.

In the end, I sincerely hope that no investor has pinned his or her family’s financial future to a business model that relies on Nashville’s all-time greatest popularity, Nashville’s all-time fastest (and likely unsustainable) growth rate, and Nashville’s all-time greatest deficit of hotel rooms compared to need. Whatever happens with our STRP laws, you have to know that current market conditions will not last.

I know that, despite the inherently risky, boom-or-bust nature of relying on real estate investment as your primary and permanent source of income, some investor owners have done just that. I want to be clear – this is the single hardest part of the debate for me. Even though I would consider it much too risky an investment/income strategy for my family, I know that there are STRP investors that are in fact relying on this business for their income, to pay bills, to buy food.  For them, I’d definitely be okay with sunset or grandfather provisions to help the impact of any changes get spread over time.

Tourism is good for Nashville; we provide a needed service: See the last point. I agree that, for today, you may be right. I am less sure whether there is value on a 20 year time horizon. I’d hate to have undermined the long-term stability of certain neighborhoods for what turned out to be a 5-7 year shortage of hotel rooms. This debate is worth having and seeing where we stand as a city.

This will cause 900 investor owned units to be dumped on the market at once: First, I don’t think so.  Second, this is an interesting argument. To borrow a response from the development community in the affordable housing debate – the entire housing market is intertwined; if you impact supply or demand, you necessarily impact price. I guess dumping 900 units on the market would tend to increase affordability? Would that be bad?

I think that about covers it. We have an unhealthy balance with investor owned STRPs now. Talking about whether to make short term and long term rentals have the same occupancy rules should help us find a better balance.

Update From 4/19 Council Meeting

Here’s a quick update of the highlights from last night’s Council meeting:

RESOLUTION NO. RS2016-172: We approved a supplemental appropriation for approximately $3 million to various Metro agencies and departments. This had been deferred from the April 5 meeting.

Metro Finance was very helpful is getting Council members to understand which supplemental appropriations were completely appropriate (e.g., funding a new program) and which ones weren’t (e.g., failure to properly budget income and/or expenses).  The agencies that got the most attention were the Farmer’s Market and the Municipal Auditorium.  For the Farmer’s Market, nearly all of their shortfalls are due to the State taking back the North Shed – that’s going to be hard for the Farmer’s Market to deal with economically.  As for the Municipal Auditorium, they had less revenue than they expected and more expenses than they expected.  I expect that Council members will have some hard questions for them during the upcoming budget process.

Another interesting note is that the original resolution asked for $3.3 million in supplemental appropriations. At the last minute yesterday, the Election Commission withdrew their request for a $314,000 supplemental appropriation. I still need to learn more, but the first report I’ve heard indicates that they didn’t really need any supplemental funds?!? I’ll be curious to hear more about this.

RESOLUTION NO. RS2016-205: This resolution approved a $2 million lawsuit settlement.  You can read the Council Analysis here (starting at page 6) for lots of details about this. Although we approved this, CM Pulley raised the question of whether we should be approving settlements for $2 million on 5 days notice to the Council. I thought we knew enough and voted in favor — you’ll see that the Council analysis indicates that the settlement was reasonable given the alternatives.

But, due to CM Pulley’s concerns, I think we’ll be seeing some new legislation soon requiring Metro Legal to provide the Council with a quarterly report listing out significant litigation matters and the amounts being sought from Metro for each case.

These were the important non-zoning measures that we passed yesterday.

Let me also give you a quick update about the Council’s Ad Hoc Affordable Housing Committee. We had a very productive meeting on April 15. We managed to get most of the Committee to meet from 4 to 6 pm on a gorgeous Friday afternoon. The Committee agreed in principle at that meeting on several items of new legislation. In the coming weeks, I hope to see several new proposed ordinances and resolutions filed to address a wider range of affordable housing issues than just inclusionary zoning. I’ll talk about these in greater detail once the new measures are filed, hopefully within a few weeks.