Hickman County Debt Exposed!
By Jim Moore
One of the biggest public mysteries about Hickman County government is the budget.
What do we spend?
How much debt are we in?
How much interest do we pay?
When will it ever be paid off?
Can we really afford to take on more debt?
For the first time, the veil of "secrecy" (secret because it is virtually indecipherable) has been lifted from the records obtained July 17, 2014 from Hickman County Finance Director Annette Elliott.
Right-click on the graph to see or save a larger image.
I spoke personally to Ms. Elliott and discovered that a debt figure I had quoted the night before at a public “debate” of countywide candidates was wrong. Other candidates across the county also had it wrong. After I spoke to her I went over the four pages she gave me with a fine-tooth comb, entering dozens of numbers and calculations into a spreadsheet and a graph.
The results may surprise you! They surprised me and everyone I have shown them to.
First, these numbers include only the principal – NO interest. Early on, the Finance Office published the interest rates and who we got the loans from. Now, they have stopped printing the interest rates.
Also, records for 1992-2013 were not requested, but most likely contain additional millions of dollars in debt expenses. I will be requesting those records.
Ms. Elliott said that Hickman County budgets 3% for interest, but that it is usually only about 1%, although the county pays variable interest rates on some debts, just like we do with our credit cards.
However, the interest rates that were published range as high as 11% per year. Only two were at 0% - an Energy loan taken out 4-15-2007 and another energy loan for schools taken out 4-9-2012.
There are 16 loans on the official records; no interest rates are shown for 6 of them – more than 37%.
Additionally, some citizens have asked about loans that don’t show up, including an alleged $2 million loan for the East Hickman sewer system. What I hear is that a grant was available for this, but informed sources said County Mayor Steve Gregory refused, saying “I don’t have time to f*** with that.” Instead, he took out a $2 million+ loan from Montgomery County Bank in Clarksville which does not show up on the county debt list. True? Personally, I don’t know, but it was raised in the 2010 county mayor race by candidate Fred Frame, who said the questions made Gregory “very nervous.” This is/was supposedly in addition to the $2 million loan obtained for the sewer system Mar. 30, 2006 from the Bank of New York.
Also, questions have been raised about a $2 million loan obtained after the 2010 flood for which we later received a federal grant. The question is where was the grant money spent? I’m hearing that since we paid 3.03% interest on what we borrowed, we should have used the grant to repay the loan instead of spending it on who knows what (probably put into the General Fund?)
Similar questions were raised about the Industrial Development Board’s money that they refused to turn over to Gregory before he fired them all. This happened again just recently when an Industrial Board bank balance of approximately $300,000 suddenly shrunk to “about $50,000” accord to Tom Isbell in a report in the Hickman County Times July 14, 2014. Isbell was quoted as saying “At some point in the future, we’re going to run out of money.”
Isbell, who is Industrial Board Treasurer, has repeatedly refused to provide me with board minutes (which he said are typed up by him), claiming “we don’t want those to get into the wrong hands.” By state law, they are public documents.
Back to our debt.
If we don’t go one more penny in debt, our annual debt payments are going to keep going up every year until 2019; even longer if interest rates go up as expected. A chart is shown with this story (right-click to view or save a larger image)and PDF and Excel 97-2003 spreadsheets will soon be available at www.jim-moore.info.
In 2015 we will pay $2,566,458.03 in payments on a $33,150,361 debt, according to Ms. Elliott. I have put her individual numbers into a spreadsheet and come up with $189,587 more than she did, but I could have made a mistake I can’t yet find. My total debt figure is $33,389,948 – not counting interest.
In 2016 we will pay $2,649,496.90 in debt payments; in 2017 - $2,723,137.07; in 2018 - $2,576,871 – IF interest rates don’t go up by then, since all interest is IN ADDITION to these figures.
Typically, if you buy a $100,000 house on a 30-year-note, you can expect to pay an additional $200,000 in interest at typical rates.
In 2019 it drops back to $1,805,754 – but then starts steadily climbing again in 2022 until it hits $2,035,000 in 2029.
When Steve Gregory took office in 1992, Hickman County had incurred $11,875,000 in total long-term debt from July 1, 1961 to March 1, 1985 – 24 years. As of 7-1-91 we paid it down by $4,001,000 (not counting what was paid in earlier years – just fiscal year 1990-1991.
A year later, we dropped our payments to #4,240,000. Our interest rates ranged from a low of 3% to a high of 11%; all of these were variable interest rates.
In fiscal year 2012-2013 we paid $5,037,503 on $53,247,642 in 16 original debts incurred from 12-15-97 to 11-13-13. That’s in addition to the missing years from 1992 to 1997.
Inconsistency is hated by bookkeepers and accountants, so it is puzzling why Hickman County financial records are so inconsistent – first interest rates provided, then not. We need public debt reports that are easy to read.
Copyright ©2014 by Jim Moore. All rights reserved.