MEMPHIS, Tenn. (AP) — A hearing is scheduled Wednesday in a lawsuit filed by a majority-Black Tennessee town located near the site of a planned Ford pickup truck factory as it tries to fight off a state takeover of its finances.

The town of Mason has sued the Tennessee Comptroller of the Treasury, which announced in March that it was taking over the finances of the town located about 40 miles (65 kilometers) northeast of Memphis. The lawsuit claims the state is taking steps in Mason it has not taken in other counties or cities that are not majority Black.

Tennessee Comptroller Jason Mumpower said the town has experienced 20 years of financial mismanagement. The comptroller is permitted under state law state law to direct Mason’s financial affairs, including the review and approval of all spending involving taxpayer or ratepayer money, his office has said.

“Predominantly white jurisdictions under white leadership, facing more dire financial straits over a longer period of time, have not been subjected to the unfettered control that Defendant is seeking to exercise over Mason,” the lawsuit said.

The comptroller’s office declined comment on the lawsuit.

The takeover attempt came after Mason’s Board of Mayor and Aldermen refused to surrender its charter. Days after the takeover was announced, Mumpower said the state of Tennessee could scale back its financial oversight if Mason meets certain goals by this summer.

Census data showed Mason’s population at about 1,330. But the population has fallen to about 794 people after the recent closure of a prison, the comptroller’s office said.

The town’s current leadership is mostly Black, but white leaders were in charge for many of the years the state said Mason’s affairs were mismanaged. State officials have maintained that the problems continued even after the change in leadership roughly six years ago.

The town has seen investigations into misconduct and accounting irregularities, including one by the comptroller’s office cited in a report in 2016, when its leaders were mostly white. Several officials resigned.

The lawsuit filed in Davidson County Chancery court seeks to stop the takeover and challenges the state’s legal standing, including a measure that requires Mason get approval from the state to spend more than $100, which would strain the city and set Mason up for failure, town officials say.

Mason claims it would have trouble making payroll and hiring and retaining law enforcement officers. Mason is working to repay debts, and it has proposed measures allowing it to repay its debts within 27 months, the lawsuit said.

Mason has not submitted its annual audit on time since the 2001 fiscal year and financial statements from 2004 to 2016 “were essentially un-auditable,” the comptroller’s office has said. Budget deficits have mounted, from $126,659 in the 2016 fiscal year to $481,620 in 2020.

Mason has already voted to use about $227,000 from American Rescue Plan funds to pay back part of the $597,905 the town owes its water and sewer funds.

The Tennessee Black Caucus of State Legislators has met with Mason officials and Mumpower, a white Republican and former member of the state General Assembly. A statement from the caucus questioned why the takeover was happening under Black leadership “and when the city is on the verge of a financial boon.”

The comptroller’s office has denied that race was a factor in its takeover efforts.

Located in Tipton County, Mason is not far from the planned, $5.6 billion Ford factory in neighboring Haywood County. Officials say the plant, which will produce electric pickup trucks, will boost West Tennessee’s economy. Ford plans to employ about 5,600 workers at the plant, and construction of the factory will create thousands more jobs.

The plant is expected to bring both small and large businesses to the area, including hotels, restaurants, health care facilities and suppliers for the Ford factory, among others. Real estate values also could increase.

In a statement, Ford has said it is aware of the situation. Although it has not been directly involved, Ford said it “reached out to state and local community leaders to express concern and learn more.”

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