Monday, April 17, 2006

$1.8 million paperwork shuffle

An interesting bit in the Metro Council agenda for Tuesday. The city got some money. But the city can't just 'give' it to the schools they have to funnel it through a non-profit. There's got to be a better way--surely.

RESOLUTION NO. RS2006-1244 (TYGARD, DOZIER & OTHERS) – This resolution appropriates $1.8 million from the unappropriated fund balance of the general fund of the general services district to Nashville Alliance for Public Education, Inc., to provide funding for the purchase of technology and science equipment for use in public schools. Nashville Alliance for Public Education, Inc., is a 501(c)(3) nonprofit organization with the mission of raising money for Metro public schools.

In February 2006, the council approved the assignment of the Renaissance Hotel lease. As part of the lease assignment, the Metropolitan Government received a twenty percent share of the anticipated profit from the assignment, which resulted in a payment to Metro of $2,234,000. This resolution relies on this share of the profit from the assignment to bolster the unappropiated fund balance of the general fund of the GSD to fund this appropriation. However, the director of finance has stated that he has been advised by the legal department that this appropriation would violate an ordinance enacted by the council in 1990, which requires that such funds go to the Metropolitan Development and Housing Agency (MDHA) for affordable housing opportunities and economic development activities. In addition, the director of finance states that the department of law has raised concerns that this appropriation may violate the Charter prohibition requiring that the general funds of the Metropolitan Government be kept separate from the schools, and that it may violate state laws granting the sole authority to the school board for determining how school funds are to be expended. Therefore, the director of finance has refused to certify that funds are available for this appropriation. A copy of the director of finance’s memorandum is attached to this analysis.

The Council Office would point out that not all of the required documentation has been provided in order for Nashville Alliance for Public Education, Inc., to be eligible to receive grant funding from the Metropolitan Government. The Metropolitan Code of Laws requires that certain information be provided by nonprofits prior to receiving grant funds from Metro. This includes a copy of the organization’s charter, a copy of the letter from the Internal Revenue Service certifying that the agency is tax exempt, a copy of the organization’s audit, a statement of the proposed use of funds, and the proposed budget for the organization. A proposed budget and statement of the proposed use of funds has yet to be provided.

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