Who’s Minding the Store? No One it seems!


Pat Phillips, Director & President of the EDA a/k/a Committee of 100.

Slipping through the Cracks!

By: Pat Hunter


Loudon County officials forgot to do something and it just slipped through the crack for years and years. Who’s really minding local government, no one it seems! This story is one for Ripley's Believe It or Not!


Loudon County Commission voted unanimously to add Commissioner Bob Franke’s impromptu request for commission’s consideration and approval. Franke added a Resolution to bring the Loudon County Economic Development Agency (EDA) under the Tennessee Consolidated Retirement System (TCRS). Commissioner Franke explained that he was requesting that two employees be “officially” added to be under the state retirement plan. The two employees are Pat Phillips, director/president and Kathy Knight, assistant director of the EDA. Phillips and Knight were not in attendance.


When Pat Phillips tried to withdraw funds from the state retirement plan, he learned that he was not part of TCRS even though he was paying into the state retirement plan and the county was paying the match.


Franke wanted to add the employees into the retirement system because $131,391 was laying in the TCRS but was “not put down specifically” for the individuals for the EDA. There are other agencies that thought that they were in the retirement plan but were not. Mayor Arp named the planning office and Commissioner Franke alluded to other agencies but stopped short of naming all the other agencies. This liability issue is just the tip of the iceberg.


Commissioner Nancy Marcus asked, since the motion was to add the two employees to the retirement plan, do we also have to approve authoring moving $131,000? Mayor Arp replied there are actually two Resolutions. Franke commented that the one resolution was to approve the joint venture (between the county and cities) and the retirement plan.


The County provides a retirement plan for all eligible employees in the TCRS, in addition to social security retirement benefits. The only problem was that Phillips and Knight were not county employees eligible for TCRS. Both were employees of the EDA, a quasi governmental entity.


 click to see video clipCommissioner Franke led the discussion, somehow this matter had slipped though the crack and that the EDA employees thought that they were in the TCRS system but they were not. The County was informed not to send money to the TCRS. The funds are in a separate accounting sub-fund since November 2007, which according to Mayor Arp will be sent to Nashville “once this mess is straightened out.” Nobody ever checked to see if anything was right!


The two resolutions must also be approved by Lenoir and Loudon City, Arp said. County Mayor-EDA Chairman Arp commented that the EDA board approved the resolution last Thursday (June 26) and then Pat Phillips contacted Commissioner Franke the next day, asking that this matter be added to the commission agenda. 


 click to see video clipCommissioner Harold Duff asked how long that had been in existence and Mayor Arp replied since Phillip’s had been the county planner. A date was not given but it was about 27 years ago that Pat Phillips was a State Planner. Phillips later accepted the planning position after Loudon County, Lenoir and Loudon City formed the planning department. Knight was hired in 1999 (est.) and worked as the EDA office manager before her promotion to assistant director. Pat Phillips does not reside in Loudon County. 


The amount is said to be retroactive. The County’s contribution is 9.24 percent into the state retirement plan; however the EDA’s contribution in the future will be 13.24 percent, which will be paid by the three government entities. The EDA receives yearly funding from Loudon County, Lenoir and Loudon City based on a percentage basis. A small amount of funding is also derived from the Lenoir City Committee of 100, which was founded by former county attorney Harvey Sproul.


County Commission voted unanimously on both Resolutions and Commission accepted the liability.   


(Note: County employees pay 5 percent into the retirement plan. According to the most recent county audit report, “Loudon County employees are members of the Political Subdivision Pension Plan, an agent multiple-employer defined benefit pension plan administered by TCRS. TCRS provides retirement benefits as well as death and disability benefits.” )  


NEW Public Records Retirement Resolutions approved by commission on 06-30-2008



Retirement Resolution