[Andy Fox]

I split Commissioner Russell’s proposal into 2 separate ordinances, one for the defined service contracts funded through hotel/motel tax, and the other one for defined service contracts funded with the general fund. Here is the hotel/motel tax version:

WHEREAS, Chapter 58, Article III, Section 58-92 of the Knox County Code currently provides appropriation, grant and funding contract procedures for allocation of the hotel occupancy tax, otherwise known as the hotel/motel tax fund; and,

WHEREAS, Knox County is experiencing significant budget and debt challenges, and taxpayer resources must be allocated with great circumspection; and,

WHEREAS, Knox County owes its residents and taxpayers the highest standard of fiscal responsibility regarding stewardship of taxpayer resources; and,

WHEREAS, transparency in allocation and expenditure of taxpayer’s resources must apply to all areas of the county budget, including organizations that receive tax dollars from the county; and,

WHEREAS, in the Knox County fiscal year 2026 budget nonprofit entities received $12,000,000 through the hotel/motel tax fund; and,

WHEREAS, Knox County should review and conduct due diligence of financial records of a nonprofit entity that receives taxpayer resources, to ensure that the resources are being utilized properly.

NOW THEREFORE BE IT ORDAINED BY THE COMMISSION OF KNOX COUNTY AS FOLLOWS:

Section 1. The Knox County Code, Chapter 58, Article III, Section 58-92, entitled “Appropriation, grant and funding contract procedures,” is hereby amended by replacing subsection (a) to read as follows:

(a)Any person requesting the receipt of funds generated by the provisions of this article shall submit an application in such form as may be prescribed by the county director of finance and approved by the county commission, subject to the minimum requirements provided herein. Such form shall include, without limitation, all information required by general state law relating to the appropriation of funds for the financial aid of any nonprofit, charitable, or civic organization. Attached to the submission of an application shall be:

1 The general itemized financial statements of the organization, including a copy of the organization’s prior year’s external audit showing a clean unqualified opinion.
2 A detailed accounting of expenditures paid by the organization from the funds it received from Knox County during the previous fiscal year, if applicable.
3 The general itemized financial budget of the organization including a detailed accounting of expenditures budgeted to be paid by the organization from the funds it anticipates receiving from Knox County.
4 A copy of its corporate Charter, bylaws, and similar corporate documents
5 A signed contractual agreement allowing Knox County’s internal audit department to be granted access to all records for financial, operational, and compliance auditing that the internal audit department deems necessary.
6 A disclosure of any potential staff or board member conflicts of interest.
7 A copy of a letter from the Internal Revenue Service evidencing the fact the organization is a nonprofit, tax-exempt organization under the Internal Revenue Code.
8 A statement of the nature and extent of the program of the organization which serves the residents of the county, and how the county funds will be used.

9 A summary and source of funding for administration costs and all other programs or initiatives sponsored or undertaken by the organization, but funded through other sources, so that the citizens of Knox County may be fully apprised of the financial status of each nonprofit organization.
10 A sworn statement from the executive director of the organization subject to penalty of perjury, affirming:
1)that no funds of the organization are used to benefit any person or persons residing in, staying in, or visiting Knox County while in violation of United States immigration laws (including but not limited to 8 USC § 1182, §1227, §1324, §1325, and §1326); and
2) practices are in place to make sure no organization funds are used for the benefit of such person or persons described in subparagraph (k)(1).
11 Salary information for the organization’s chief officer and next highest paid employee
12 Such other information as may be required by the county commission and code of ordinances.

These documents must be received by the county mayor and county commission 90 days prior to inclusion in the Knox County Budget. The county mayor shall recommend within 15 days of receipt that the county commission either approve or deny the application.

Upon recommendation by the county mayor, or upon resolution by the county commission if the county mayor does not recommend, an application shall be reviewed by the county director of finance and the county law director as to form, substance, and compliance with the provisions of this article. In reporting on all applications received and reviewed during the preparation of the annual budget of the county, the director of finance shall prepare and submit for review a fiscal note describing the total funding requirements of all applications presented to the director of finance, including therewith the recommendation of the county mayor, along with anticipated revenues available for such funding.

Additionally, those applications and accompanying documentation recommended by the county mayor shall be presented to the county commission by the county mayor no later than 30 days before presenting the budget at large, accompanied by a fiscal note describing the impact upon available and anticipated revenues generated pursuant to this article, as well as an accounting of the cumulative impact upon such available or anticipated revenues of the funds generated pursuant to this article.

Section 2. The Knox County Code, Chapter 58, Article III, Section 58-92, entitled appropriation, grant and funding contract procedures, part (b), is hereby amended by replacing subsection (b) to read as follows:

(b) Upon completion of the review by the director of finance and the county law director of any application for funding pursuant to the provisions of this article, the application, recommendations, and other review prepared by the county director of finance shall be forwarded to the finance committee of the county commission no later than 30 days before presentation of the budget by the county mayor to the county commission. Such committee shall prepare its recommendations for action on the application by the county commission. No request for funding pursuant to this article shall be considered by the county commission without the review, reports, and recommendations/resolutions mandated herein.

Upon approval of the Knox County Budget, any organization approved for funding pursuant to this article must sign a contractual agreement with the county and ensure compliance with all stated terms and conditions; including, providing Knox County’s internal audit department access to all financial, operational, and compliance records, and implementation of any recommendations and/or requirements that the internal audit department deems necessary.

Section 3. The Knox County Code, Chapter 58, Article III, Section 58-92, entitled appropriation, grant and funding contract procedures, part (d), is hereby amended by deleting subsection (d).
Section 4. This Ordinance shall take effect as provided by the Charter of Knox County, Tennessee, the public welfare requiring it.