Public records request reveals county dropped the ball in monitoring PILOT agreements

Ten years ago, two Japanese companies agreed to bring jobs and investment to Washington County if the county gave them 10 years worth of tax breaks on their property, buildings and equipment.

To monitor whether the companies met their promised job requirements, they were supposed to file annual job reports. If they fell short of the jobs promise, they lost a proportional amount of that year’s tax break.

Washington County Industrial Park (Nathan Baker)

Sounds reasonable and fair, and the work of government officials trying to look out for the county’s best interest.

Problem was, the company did not file those annual reports — at least until this year after a local news reporter asked about them.

News reporter Nathan Baker of the Johnson City Press reveals this after several months of persistent, detailed reporting in “Records show Washington County officials asleep at wheel on auto maker PILOTs,” published this weekend.

The discovery prompted the company to file three years worth of jobs reports. According to the new self-reported numbers, Koyo Corporation met their job promises, but Nakatetsu Machining Technologies fell short. Under the terms of the agreement, Nakatetsu took more in tax breaks than they should have.

Now, Nakatetsu’s attorney says that the job numbers in the PILOT agreements “may have been written incorrectly in the original lease agreement in 2006,” and were too high.

We won’t know for a while how that turns out. But Kudos to Baker and the Johnson City Press for using public records law to untangle what essentially was a local government’s failure to hold companies accountable for their job promises.

It’s unfortunate that the county overlooked its responsibilities to monitor their investment in job growth. The state didn’t appear to help much in oversight either: During this period, it state stepped in with more support for Nakatetsu, although it’s unclear from the press release exactly how much in state tax breaks the company would be receiving.

Somewhere in there, it seems someone could have asked if the company was living up to its local legal agreement.

Earlier this year, a statewide poll showed that Tennesseans think government is not transparent with economic development programs.

Maybe local elected officials should take heed of what happened in Washington County. Transparency and accountability go hand in hand.

What do you think?