Smith County and Board of Education reach settlement agreement in lawsuit

January 24, 2024

On November 17, the Smith County Board of Education filed a lawsuit against the Smith County Board of Commissioners, Smith County Mayor Jeff Mason, and Smith County, TN. The lawsuit followed the adoption of the Financial Management Act 1981 by the County Commission on October 9, 2023.

According to the lawsuit, the Board of Education alleged that the county violated the Open Meetings Act by not giving proper public notice of meetings and that certain members of the county commission met and/or deliberated privately regarding the county finance structure and the adoption of the Financial Management Act of 1981.

In January, a settlement agreement was reached following negotiations between representatives of Smith County and the Board of Education.

The county will now proceed with the implementation of the Financial Management Act of 1981 and a centralized finance department for all county funds. Both the County and the Board of Education held meetings on Tuesday, January 23, 2024 to discuss and adopt the agreement. (See video of meetings below)

The Smith County Board of Commissioners and the Board of Education released the following joint statement regarding the settlement:

The Smith County Board of Education and the Smith County Board of Commissioners, along with the Director of Schools and the County Mayor have sought and reached a resolution of the differences that had arisen as a result of the County Commission’s adoption of the Financial Management Act of 1981, which would centralize administration of county funds. The parties have agreed that the County will operate under the 1981 Act.

The dispute resolution process led to a collaborative effort to refine the process of implementing the 1981 Act. The Board of Education will continue to administer the education programs of Smith County in an efficient, autonomous, and effective manner while the county will reap the intended fiscally efficient benefits of centralized purchasing, budget administration, and transparency. Throughout the process, it has been the Board of Education’s goal to be in a position to continue to provide outstanding educational opportunities to Smith County students. Likewise, the County Commissioners sought to find a solution that allows county services to be delivered in a manner that creates the least burden on the taxpayer. The resolution of the issues provides a mechanism for both public bodies to “have a seat at the table,” for the implementation of policies and procedures, and to move forward.

The Tennessee Comptroller of the Treasury Jason Mumpower released the following statement regarding Smith County’s adoption of the Financial Management Act of 1981:

I want to congratulate Smith County Mayor Jeff Mason and the Smith County Commission for making a wise and fiscally responsible decision to adopt a central system of accounting, budgeting, and purchasing under the County Financial Management System of 1981. Centralizing financial operations will improve accountability and the services provided to Smith countians. My Office stands ready to help the county as they make this important transition. 

Below is a copy of the settlement agreement/resolution that was passed by the Smith County Board of Commissioners: