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.