April 28, 2010
Dear City Attorney:
You have the following question: Can a county assess the City money for E911 support,
beyond the local telephone service charge provided for in the Emergency Communications
District Law?
The answer to this question appears to be no, unless the city has agreed to the assessment
or there is an interlocal agreement supporting the assessment.
Tenn. Code Ann. § 7-86-101 et. seq., provides for the establishment of emergency
communications districts. According to Tenn. Code Ann. § 7-86-105:
It is the public policy of this state to encourage the consolidation of
emergency communications operations in order to provide the best
possible technology and service to all areas of the state . . . in the
most economical and efficient manner possible. Pursuant to this
policy, if two or more counties, cities, or existing emergency
communications districts desire to consolidate . . .a joint
emergency communications district may be established by the
parties using an interlocal agreement . . . . Under such an
agreement, the funding percentages for each party . . . shall be
determined by negotiation of the parties.
Thus, the city’s funding obligations to the county’s E911 system may be provided in the
interlocal agreement. (Presumably, the city could also agree outside of an interlocal agreement
to pay support to the E911 system.) If the interlocal agreement does not address the issue of the
city’s financial contributions, there is additional guidance in the statute itself.
Tenn. Code Ann. § 7-86-106 provides that an emergency communications district:
shall be a municipality .... but without any power to levy or collect
taxes. Charges for services authorized in this chapter shall not be
construed as taxes and shall be payable as bona fide service
charges by all service users, whether public or private .... including
governmental entities.
That language appears to limit the charges of E911 systems to the charges that are
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prescribed by the Emergency Communications District Law.
Emergency Telephone Service Charge
To fund emergency services, the communication districts are authorized to levy “an
emergency telephone service charge” under Tenn. Code Ann. § 7-86-108. This section also
authorizes the district to submit a rate increase to the people of the district in accordance with the
guidelines set forth in Tenn. Code Ann. § 7-86-108(2)(A)-(E). In addition, subsection (c) of the
same statute allows the legislative body of the county (by resolution) or a municipality (by
ordinance) to reduce the levy by a 2/3 vote of the legislative body, provided that the reduction is
not below the level reasonably required to operate the system.
This is not the only source of funding authorized by the statute, however. Tenn. Code
Ann. § 7-86-109 authorizes the district:
to receive funds from federal, state, and local government sources,
as well as funds from private sources, including funds from the
issuance of bonds, and may expend such funds for the purposes of
this part. Any legislative body of a municipality or county creating
a district under the terms of this chapter may appropriate funds to
the district to assist in the establishment, operations, and
maintenance of such district.
While this section authorizes cities to contribute to the district, it does not appear to make
such contributions mandatory. Rather, such contributions require affirmative action by the local
governing body. The use of the term “may” rather than “shall” implies that such contributions are
purely discretionary.
As for other revenue sources, the district is authorized to issue bonds for the purpose of
constructing, acquiring, reconstructing, improving, bettering, or expanding any facility or service.
Again, however, this is “subject to the approval of the legislative body of a county or
municipality.” See. Tenn. Code Ann. § 7-86-114.
Terminating Service
Assuming that the county demands additional funds, the issue becomes whether services
to the city can be terminated in the event the city refuses to pay. While the service supplier/
district board are authorized to terminate services to individuals and businesses who do not pay
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the service charge under Tenn. Code Ann. § 7-86-110, there does not appear to be a parallel
provision applicable to cities who do not contribute additional funds to the E-911 system.
Arguably, their citizens are already paying for the service via the monthly service charge.
However, if the interlocal agreement provided that service would terminate if the city did not
contribute the money, the terms of the agreement would govern in this instance.
Remedies
Under Tenn. Code Ann. § 7-86-312, any city or county governing body may “by
resolution, request the [Emergency Communication] Board to review a decision of the board of
directors of the emergency communications district serving such city or county affecting its
financial standing and its level or quality of 911 service.” While this is not the only remedy
available to a city in this situation, it is certainly an alternative to litigation.
Other remedies provided for in the Act pertain specifically to “financially distressed
emergency communications districts.” Under Tenn. Code Ann. § 7-86-304, a financially
distressed district “shall be subject to the supervision and evaluation of the [state emergency
communications] board. I do not know if the county’s attempt to seek more money from the city
reflects financial distress. The term “financial distress” is defined in that statute and the state
E911 board has significant powers to prescribe a sufficient rate structure, including the right to
petition the chancery court if the system does not adopt the rate.
Conclusion
While the Emergency Communications District Law Act does not authorize an E911
system to impose a charge on individual municipalities, it does provide for the system’s adoption
of a service charge. It allows for other sources of funding, thus not excluding contributions from
local governments. However, throughout the Law, cities and counties do seem to retain input in
matters concerning funding, whether in the issuance of bonds or contributing money to the
service. Furthermore, citizens are given a vote on matters such as service charges. The
imposition of an additional charge on these citizens indirectly via a charge to the city seems in
contravention of these principles.
Sincerely,
Sidney D. Hemsley
Senior Legal Consultant