[Angela Russell]

I have email a copy of a draft ordinance to all commissioners. Unfortunately, due to sunshine laws, Commissioner Fox and I have not been able to discuss this issue directly and collaborate on details. This inability to communicate has resulted in confusion with him assuming two ordinances but me writing one ordinance.
While we did not discuss the details of the ordinance, I did contacted him about how he preferred to proceed given we are not allowed to confer on the subject. Therefore, he wishes to reserve the right to request edits to my draft submission. He is mindful of time constraints and will share those with myself and all other commissioners as quickly as possible. I apologize for any inconvenience that Commissioner Fox’s and my inability to communicate has caused the remaining commissioners, but we are doing our best given the constraints of sunshine laws.

Below is a cut and paste of the draft ordinance for the public. Unfortunately, the alignment is not correct making it difficult to understand in this format. A properly formatted copy will be made available with the final agenda. Thank you for your patience.

ORDINANCE

AN ORDINANCE OF THE COMMISSION
OF KNOX COUNTY, TENNESSEE,
AMENDING THE KNOX COUNTY CODE,
CHAPTER 2, ARTICLE VIII, DIVISION 4,
“RECEIPT AND DISBURSEMENT OF COUNTY
FUNDS; BUDGET PROCEDURES”, TO
ADD A NEW SECTION 2-558 TO PROVIDE
APPROPRIATION, GRANT AND FUNDING
CONTRACT ACCOUNTABILITY FOR COUNTY
GENERAL FUNDS AND CHAPTER 58, ARTICLE
III, SECTION 58-92, “APPROPRIATION, GRANT
AND FUNDING CONTRACT PROCEDURES”,
TO AMEND APPROPRIATION, GRANT AND
FUNDING CONTRACT PROCEDURES FOR
HOTEL/MOTEL TAX FUNDS. (ORD. NO.
O-91-11-101, ADOPTED 1-27-92, ORD. NO.
O-02-6-102, ADOPTED 7-22-02, AND ESTABLISHING
SECTION 2-558, PREVIOUSLY RESERVED)

ORDINANCE: O-25-10-???

REQUESTED BY: COMMISSIONER RUSSELL

PREPARED BY: COMMISSIONER RUSSELL

APPROVED AS TO FORM
AND CORRECTNESS:________________________
DIRECTOR OF LAW

APPROVED 1ST READING: ___________________
DATE

APPROVED 2ND READING: ___________________
DATE

APPROVED EMERGENCY: __________________
(YES) (NO)

VETOED:___________________________________
DATE

VETO OVERRIDE:_________________________________
DATE

MINUTE BOOK______________PAGE__________________

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, Chapter 2, Article VIII, Division 4 of the Knox County Code currently provides receipt and disbursement of county funds and budget procedures; and,

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

WHEREAS, Knox County owes its residents and taxpayers the highest standard when it comes to the stewardship of taxpayer resources; and,

WHEREAS, transparency in allocation and expenditure of taxpayer’s resources must apply to all areas of the county budget; and,

WHEREAS, in the Knox County fiscal year 2026 budget nonprofit entities received $12,000,000 allocated to defined service contracts through the hotel/motel tax fund and $1,909,000 was allocated to defined service contracts through the general fund; and,

WHEREAS, Knox County should review and conduct due diligence of a nonprofit entity’s records that receive 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 or organization 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. 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 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; detailed accounting of expenditures paid by the organization from the funds it received from Knox County, if applicable; 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; 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; a disclosure of any potential staff or board member conflicts of interest; and salary information for the organization’s chief officer and next highest paid employee. These documents must be received through the procurement process and considered by the county mayor at least 30 days prior for inclusion in the Knox County Budget. The county mayor shall recommend that the commission either approve or deny the application. After recommendation by the county mayor, the 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 recommended for approval by the county mayor including therewith the recommendation of the county mayor, along with anticipated revenues available for such funding. Additionally, any applications and accompanying documentation filed with the county mayor shall be presented for review to the county commission as provided by this section, 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,” 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 and accompanying documention, recommendations, and other review prepared by the county director of finance shall be forwarded to the county commission. No request for funding pursuant to this article shall be considered by the county commission without the review, reports, and recommendations 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,” is hereby amended by replacing subsection (d) to read as follows:

(d) Notice of all meetings involving an application for funding pursuant to this article shall be furnished to the county commission or the county mayor not less than ten days preceding such meeting.

SECTION 4. The Knox County Code, Chapter 2, Article VIII, Division 4, entitled “Receipt and Disbursement of County Funds; Budget Procedures,” is hereby amended to add a new Section 2-558 entitled “Appropriation, grant and funding contract procedures” to read as follows:

Sec. 2-558. Appropriation, grant and funding contract procedures.

Any person or organization requesting the receipt of county general funds shall submit an application in such form as may be prescribed by the county director of finance. 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 the general itemized financial statements of the organization including a copy of the organization’s prior year’s external audit report showing a clean unqualified opinion; detailed accounting of expenditures paid by the organization from the funds it received from Knox County, if applicable; 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; and 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; a disclosure of any potential staff or board member conflicts of interest; and salary information for the organization’s chief officer and next highest paid employee. These documents must be received through the procurement process and considered by the county mayor at least 30 days prior for inclusion in the Knox County Budget. The county mayor shall recommend that the commission either approve or deny the application. After recommendation by the county mayor, the 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 recommended for approval by the county mayor including therewith the recommendation of the county mayor, along with anticipated revenues available for such funding. Additionally, any applications and accompanying documentation filed with the county mayor shall be presented for review to the county commission as provided by this section, 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 5. This Ordinance shall take effect as provided by the Charter of Knox County, Tennessee, the public welfare requiring it.

__________________________________________
Presiding Officer of the Commission Date

_________________________________________
County Clerk Date

Approved:________________________________
County Mayor Date

Vetoed:___________________________________
County Mayor Date

[Courtney Durrett]

Commissioner Russell – You and Commissioner Fox are allowed to communicate on anything that may come before commission as long as the meeting between you two (and anyone else) is publicly noticed. Only 48 hours notice is required, and our office will send out the notice once scheduled. Hope this helps.

[Angela Russell]

Commissioner Durrett, I really appreciate your insight. We actually considered that but the commission office’s Thursday deadline for submission would not allow time for adequate notice of a meeting, the meeting itself (coordination of calendars), preparing any needed edits, and then submitting before Thursday. Following all the rules and deadlines has made this difficult to maneuver. I actually contacted the law director’s office to obtain direction on how to proceed but comply with sunshine regulations. This appeared to be our only option to both meet the deadline and comply. I definitely do not prefer this method of communication and would not recommend it. It is awkward and time consuming. Thank you again, Angela Russell

[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.

[Andy Fox]

Here is the general fund version:

WHEREAS, Chapter 2, Article VIII, Division 4 of the Knox County Code currently provides receipt and disbursement of county funds and budget procedures; 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, $1,909,000 was allocated to defined service contracts through the general fund, for services provided by nonprofit entities or for grants to nonprofit entities; 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 2, Article VIII, Division 4, entitled Receipt and Disbursement of County Funds; Budget Procedures, is hereby amended to add a new Section 2-558, entitled “Appropriation, Grant and Funding Contract Procedures,” with subsection (a) to read as follows:

(a) Any person or organization requesting the receipt of general county funds under the designation of “Defined Services Contracts” 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 2, Article VIII, Division 4, entitled Receipt and Disbursement of County Funds; Budget Procedures, is hereby amended to add a new Section 2-558 (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. This Ordinance shall take effect as provided by the Charter of Knox County, Tennessee, the public welfare requiring it.

[Andy Fox]

I didn’t simply split Commissioner Russell’s version into 2 components, I also made additions and revisions.

[Angela Russell]

Commissioner Fox,
Due to my vision issues, I am unable to read long messages in this gray format. Since this has been shared publicly, please email a copy in word format to me so I can read it.
Thank you, Angela Russell

[Damon Rawls]

Commissioners,

I agree we need to update the funding policy for non-profits. I would ask that we push this vote out 30 days. I’d like to get some guidance from Jenny Holden and Chris Caldwell on the current policy, and we marry their suggestions with the proposed changes in this ordinance, in addition to any other changes submitted by other commissioners.

[Kim Frazier]

Thank you, Commissioners Russell and Fox.

I would like to respectfully ask for consideration of a postponement and request that a work shop be organized for Commission with County Staff.

[Author]

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