City of Mason sues Tennessee Comptroller
Elected leaders in the town of Mason have filed a lawsuit against Comptroller Jason Mumpower, demanding an immediate halt to a financial takeover of the small, mostly black community in rural West Tennessee, located a few miles of a new electric car factory which should economically rejuvenate the Region.
In a motion filed Friday afternoon, Mason’s mayor and board of aldermen are asking the court to rule that the comptroller’s actions are illegal under state law. The “Comptroller does not have the authority to take full control of Mason’s financial expenditures,” the lawsuit claims.
The state’s financial surveillance plan also violates the Tennessee Constitution and the Equal Protection Clause of the Fourteenth Amendment of the U.S. Constitution “by attempting to take over Mason’s finances without proper justification and because most officers and of the town’s residents are African American,” the lawsuit says. Mason is represented by attorneys with the national organization NAACP and its Tennessee chapter.
“The proposed treatment for Mason and his executives is marked by irregularities and differs significantly from the treatment of predominantly white jurisdictions in the same situation,” the lawyers wrote.
“The fact that the takeover attempt is continuing now – rather than years ago, when Mason’s white leadership actually caused the financial problems complained of – demonstrates that (the comptroller’s) actions are inconsistent with the typical government actions and (the comptroller’s) own history of managing jurisdictions experiencing financial difficulties.
An emergency hearing was scheduled for Wednesday in Davidson County Chancery Court by Chancellor Anne Martin.
John Dunn, a spokesman for the Comptroller, declined to comment on ongoing litigation on Sunday. In his order, Martin set a deadline of 3 p.m. Tuesday for the state’s legal response, which will be filed by the attorney general’s office.
Takeover draws national attention
The dispute between the Comptroller and Mason came to public attention last month after Mumpower took the unprecedented step of sending a letter to 1,337 of its residents. The letters said Mason could be left out of the opportunities looming with the arrival of a new $5.6 billion Ford Motor plant – due to a long history of financial mismanagement by executives of the city, leaving it deeply in debt and with the highest tax rate. rate in the county. Mumpower made a direct appeal to residents, encouraging them to urge their elected officials to hand over the city charter.
“The new Ford plant provides a major opportunity for West Tennessee, but Mason will be left out if he continues to be judged by his mismanaged government.” said the letter.
The Comptroller later noted that Mason’s ongoing financial problems include delays in submitting budgets and audits required by law and the improper transfer of customer utility payments into the general city budget.
Surrendering Mason’s charter would subsume the majority-black, majority-Democratic community into majority-white, majority-Republican Tipton County. At a March 14 community meeting, Vice Mayor Virginia Rivers said city leaders have no plans to surrender a charter dating back to 1871. Rivers told the Tennessee Lookout that Comptroller’s actions looked like a hostile takeover and she questioned their timing. , just ahead of one of the biggest manufacturing investments in Tennessee history – just five miles from Mason – that will bring in more residents, more businesses and a broader tax base.
Rivers noted that the financial debt accumulated by the city government had occurred in previous administrations, which were predominantly white. The mayor, vice mayor and five of his six Mason aldermen are black.
A few days after the community meeting, Mumpower announced that it would move forward to take financial control, imposing a strict budget for making payments from misdirected utility funds and requiring that any expenditure over $100 be given the approval of his office.
The takeover, however, could be shorter than the comptroller originally planned, after Mason officials used federal funding from the American Rescue Act to pay off its utility debt, Mumpower said. Mason officials also provided accounts to show debt payment history over the past year. The takeover arrangement officially begins on Monday.
Ford Motor officials also intervened, saying they had contacted the comptroller and local officials and expressed concern.
Since then, civil rights organizations including the NAACP and the Equity Alliance have sent staff and volunteers to Mason to hold meetings and knock on doors, saying they want to show their support.
Trial: “incoherent and irregular steps”
The lawsuit recounts a timeline of contact between the Comptroller’s office and Mason officials that establishes an “intermittent” engagement with Mason officials before September 2021.
Immediately after Gov. Bill Lee’s Sept. 28 announcement of Ford’s new Blue Oval City electric vehicle plant, the Comptroller ramped up his contacts, seeking nearly bimonthly “contact” meetings with Mason officials, according to the trial.
“Almost from that time, (the Comptroller) sought to interfere with Mason’s affairs,” the lawsuit states. “Now, with construction expected to begin shortly and Mason poised to take advantage of the influx of labor and cash, (the Comptroller) has made the inconsistent and irregular decision to try to seize the Mason’s finances and pressure the city to dissolve his charter.”
And, according to the lawsuit, the controllers’ actions are a “clear departure from the traditional procedures followed by the Tennessee controller.”
Mason’s attorneys — Van Turner, Jr., president of the NAACP Memphis Branch, Nashville attorney Terry Clayton and three attorneys from the Baltimore-based NAACP Legal Defense and Education Fund — argue that the state has not the power to take charge day to day. Mason’s day-to-day operations under Tennessee law cited by the comptroller.
The law says the comptroller can order local governments to adjust budget estimates, cut spending, or levy additional taxes.
“But this provision does not establish that (the comptroller) has the power to exercise the control he seeks here: to require Mason to receive approval from his office before spending more than $100,” the lawsuit states. .
In affidavits submitted by Mason Mayor Emmitt Gooden, Vice Mayor Virginia Rivers and Reva Marshall, Mason’s part-time financial officer, city officials described a pair of recent videoconferences with officials from the office of controllers.
On March 29, city officials asked questions about what to do in an emergency that might require immediate funds of more than $100. The lawsuit cited recent examples involving emergency expenses: a sewer line backup that threatened to flood residents’ homes, emergency response vehicle breakdowns, and an IT service outage that halted operations. of the city until it is repaired. All were urgent expenses.
Comptroller staff would allocate funds for emergencies, but did not specify the amount, the lawsuit said. They told Mason officials that regardless of the time of day or day of the week, protocol for emergencies would require first responders at the site of an emergency to first contact Marshall, the finance officer, who must then contact the comptroller’s office for approval. , says the lawsuit.
“Mason’s ability to provide emergency services would depend on a string of phone calls,” Marshall said in a written affidavit. “Effectively, the ultimate decisions related to the health and welfare of citizens would be made by accountants 180 miles away, rather than first responders on the scene.”
Marshall noted that his position was part-time and that support would require him to be available 24/7.
“Three Facts About Mason”
The lawsuit highlighted three facts about Mason that are “particularly relevant” to his legal claims. First, he noted that the city is majority black, as are its leaders.
Second, the lawsuit noted financial mismanagement by Mason’s former, almost exclusively white, leadership that forced Mason into debt. When this mismanagement came to light in 2016, Mason’s management resigned en masse.
Since then, with Mason being majority black, the executives have “regularly repaid Mason’s debt and remedied Mason’s financial condition,” the lawsuit says.
Finally, Mason’s location, just five miles from the site of Ford’s new $5.6 billion electric vehicle and battery plant, positions Mason as a prime location for real estate development. commercial and residential, depending on the suit.
Since 2013, the comptroller exercises control over two other entities: the city of Jellico and the county of Van Buren. Van Buren, who the lawsuit says is 96% white, fell under state surveillance when he was nearly $9 million in debt and had $1,395 in cash. The county received a $680,000 unrestricted loan from the state legislature and was not subject to $100 spending approvals, according to the lawsuit.
Jellico, who the lawsuit describes as 93% white, came under scrutiny after his city recorder was charged with stealing $100,000 of public funds. Likewise, he did not have to wait for approval for $100 or more of expenses, according to the lawsuit.
Unlike Jellico and Van Buren County, Mason’s attorney wrote, “Mason has significantly improved his financial position over the past few years. Moreover, none of these jurisdictions expected a multi-billion dollar business to emerge nearby. So, rather than stepping in to try to save the finances of a city or county on the brink, (the comptroller) targets Mason at a time when his financial situation is strong and improving – and when he is poised to gain an even stronger economic footing from the construction of the Blue Oval Plant,”
Separately, on Friday, a letter from the NAACP Legal Defense and Educational Fund to Mumpower urged him to release Mason from financial scrutiny.
There “is no legitimate justification for the state’s assumption of Mason’s finances under these circumstances,” the letter said.
“Indeed, the timing of the state’s decision – when the state has not taken over the city’s finances when they were in a much worse state under the former white leadership – raises concerns about to the arbitrary and discriminatory application of state law in violation of the Constitution of the United States and the Constitution of Tennessee.