More than an hour before the Murfreesboro City Council voted 6-1 to sell the electric company, utility workers from both organizations filled many of the council chamber’s seats.
The over-capacity crowd included employees of Murfreesboro Electric Department, Middle Tennessee Electric Membership Corp., city staff, citizens concerned about the sale, and people concerned about a rezoning case. The crowd overfilled the council chamber, which has a capacity of 180, so the city asked the rezoning crowd to wait in the rotunda because of the fire marshal’s concerns.
Councilman Ronnie Martin cast the only “No” vote on the sale.
Under the terms of the deal, the overall price is $302 million. The city will receive a $43 million down payment at closing. As the Murfreesboro Post has reported, the down payment is coming from MED's cash on hand.
Although the council made its decision, the sale must be approved by MTEMC'S board of directors as well as the Tennessee Valley Authority.
MTEMC earlier this month asked Sen. Majority Leader Jack Johnson to approach the Tennessee attorney general on issuing an opinion on whether city residents should vote in a referendum to sell MED.
Mayor Shane McFarland defended his use of his construction business email account to conduct city business, as previously reported by the Post.
He also said he understands people being “leery” about the sale.
“We made a mistake not raising taxes over a 20-year period, so we raised taxes last year,” he said, adding he has been on the council for 16 years. He expressed concern for the MED employees who have endured all the public debate.
“I woke up this morning, and (his wife) was asking me why I was mad, and I said, ‘Well, I saw a news article last night where apparently I’ve been sending personal emails out,’ and I can tell ya … we forward from our personal email accounts all the time. I got an email where a constituent emailed my twin brother, and my twin brother emailed my business account because somebody was emailing him. For any of us to think that we’re doing stuff behind the scenes – it just doesn’t happen. You get mad because you get questioned on what your ethics are when you’re just trying to make the best decision for Murfreesboro.”
The mayor said MED is a good electric system but if the city kept it, either the city or MED would have to invest in future capital needs, which would require borrowing money. Employee retention is an issue when the city cannot hire enough CDL drivers to operate Public Works trucks.
McFarland dismissed people’s arguments for a referendum, saying he checked with the Rutherford County Election Commission and the city cannot hold a referendum for “anything we want.”
He said so many people are moving to Murfreesboro because “this is a great place to live.” He added, “I cannot find a reason this is not a good deal for the city of Murfreesboro.”
Regarding the sale swapping out MED’s cash on hand to give to the city, Vice Mayor Madelyn Scales Harris asked City Manager Craig Tindall if the city is acting like a bank. He said that is not the case because the transaction is an installment sale, meaning most of the sales price will take place as installments over 15 years. The sale structure is the most efficient way to handle the process, he said.
Scales Harris said she did not like the answer. People in the audience clapped, but McFarland told them not to do that.
Councilmember Rick LaLance said he is glad the vote had been delayed for one month and added there has been a lot of “hullabaloo.”
“There has been nothing material to me in any of the stuff that has come out,” LaLance said. “It’s all just a little of this or that. I get a kick out of this – y’all are gonna like this – I thought about this today. When you read stuff in the paper or see stuff on the news, this is one of those things I just laugh about – if you read an article tomorrow that said Rick LaLance admits he’s a man…I mean, all of a sudden, you go, ‘What’s he saying?’ Well, it’s nothing. It’s just the words that you use sometimes make things seem like there’s some you know, secret this or secret that. You know – it’s … it’s ridiculous. Somebody made a comment to me … ‘Well, wouldn’t you be bothered that the mayor had a discussion about this a year ago with the city manager that he wanted to find out, he thought that this would be a good idea?’ No.”
He added that the sale is good for the city and for the employees if the city handles the proceeds well.
Councilman Kirt Wade asked Tindall to point out MED is not a “cash cow.” Tindall said MED pays the city about $3 million a year as in-lieu-of-taxes and they have to set their rates to cover their operating costs.
Wade said that he was against the sale when it was first explored in 2014 but things have changed. The city has not thought about what’s best for the MED employees, and praised MTEMC.
“When is enough, enough,” Wade said, and called for using the proceeds to create a community board similar to the Christy-Houston Foundation to work for the city for future generations.
Councilman Eddie Smotherman said both utilities have phenomenal employees. Regarding the $43 million down payment, he considers that to be ratepayer money that MED customers paid in to build a future headquarters for the utility that would have cost a “substantial” amount more than that total. The $43 million will become taxpayer money once the city receives it. And then the council needs the wisdom to spend the funds well, and if it is spent well, it will prevent another tax increase. He praised utility and city staff for holding public outreach efforts.
Councilman Bill Shacklett thanked people on both sides of the issue and spoke for several minutes on the need for respectful dialogue and how the city’s decision to sell MED changed both that utility’s and the co-op’s culture for the employees. He called out what he said was “evil intent” implied by the media and social media and said he does not call his colleagues up to make decisions. He urged people to “look for the best in people.”
Once the sale was approved, members of the audience broke