“It is important to note that at this point we do not have any extra dollars for maintenance of effort for schools,” Campbell said. “It’s been a very tough budget and I know I’ve said this for five straight years. We’ve been more fortunate than some, but it’s been tough to live within the budget.”
Originally, the KCS budget came in $3.2 million out of balance. After
continuing to work through the budget review process, school officials last week
requested of the BMA a $1.8 million increase in operating funds. Kingsport
currently provides KCS with $9.8 million annually, typically called "maintenance
of effort," an amount that cannot be reduced, as per state law.
"If there’s an increase for schools, there has to be a reduction of city services or payroll or a tax increase,” Mayor Dennis Phillips said.
KCS is hoping for $3.3 million in additional funding from a number of sources next year, including $1.1 million in state funding, $308,000 from county property taxes and $28,000 in local option sales taxes.
School officials have said the system needs to spend $2.8 million more next year just to maintain the current level of service, however, with the request to Kingsport being up in the air, the school system may only receive $1.5 million in additional funds next year.
Board of Education member Susan Lodal said last week if the city did not approve the funding increase, the school system would be taking a step backward.
Last year, KCS sought $2.4 million in additional funding and ultimately received $300,000, raising the city’s maintenance of effort from $9.5 million to $9.8 million.
Since the school system’s maintenance of effort request was so large, Campbell said on Tuesday he does not feel comfortable recommending an amount.
“We’re not saying this is a final thing, but at this point until (the BMA) saw the budget, we did not feel comfortable pinpointing an amount,” Campbell said, noting the school system has seen a $2 million increase in operating funds over the past seven years.
Before Kingsport makes a “drop dead” decision on the budget, Campbell said he would have another meeting with Superintendent of Schools Dr. Lyle Ailshie and BOE President Dr. Randy Montgomery.
The BMA has another budget work session scheduled for Thursday, when city leaders are expected to give Campbell and city staff some direction on how much, if any, additional funds the city will provide to the school system next fiscal year. The BMA will also take another look at the recommended five-year capital improvement plan.
Kingsport’s overall budget is composed of many independent budgets, such as the general fund (administration, police, fire, and parks and recreation), water and sewer funds, and small miscellaneous funds such as solid waste, fleet and risk management.
By city charter, the BMA must approve a budget by June 30. A public hearing and first reading on the budget is scheduled for June 4; a second and final reading is scheduled for June 18. The fiscal year runs from July 1 to June 30.
Over the past four years, due to the recession, Campbell said Kingsport has experienced a $4.4 million loss in revenue — $1 million in property taxes, $1.5 million in sales tax collections, $1.2 million in interest earnings and $715,600 in Hall Income Tax earnings.
Campbell’s proposed budget for the 2014 fiscal year is balanced with no property tax increase but does include three percent increases to the water and sewer rate for all users. During the recession, city officials said Kingsport did not stick with the rate stabilization plan for water and sewer — slight increases each year to help maintain the systems — and now increases are needed for all users.
For the average user in the city, the rate increases will equate to an additional $1.08 on the bill; for the average user outside the city, the amount will be $1.73.
The proposed budget does eliminate one position from the city rolls, but adds six new positions — one police officer, a maintenance worker, a marketing position for the leisure services department and three in public works due to annexation, Campbell said.
The marketing position, called a social media position by some BMA members, drew some fire during Tuesday’s meeting.
“Why not ... farm this out. In the long term it would be cheaper,” said Alderman Mike McIntire. “The technology changes so fast and Facebook may be the thing today and it might be something else next week.”
Chris McCartt, assistant to the city manager and for whom the new position would be under, defended the position calling it “extremely beneficial.” McCartt said the person hired would handle social media promotion for a variety of events and venues under the leisure services department.
“It would be more beneficial to city dollars in the long run,” McCartt said.
Phillips also took issue with the “social media” position, asking about police staffing levels, specifically in the patrol zone that includes the Interstate 81/Rock Springs area.
“All I hear is we’ve not got enough personnel. I can’t see how there’s not a lot more important positions,” Phillips said.
The proposed budget calls for four additional personnel funded through the stormwater fund, a fund created last year by the city to help address stormwater issues throughout the city. Campbell said the new employees would map out the city’s storm system, perform routine drainage cleanouts and look for potential problems.
The budget calls for a 1.5 percent raise and 2 percent step increase for employees, property tax growth at an estimated 2.75 percent over last year’s amount and sales tax collections at $16.1 million. Last year, Kingsport projected $15.9 million in sales tax collections, but current figures have the city ending the fiscal year at $15.3 to $15.4 million.
Campbell said the reasons for the projected increase is due to normal growth and an awareness that several businesses were unusually low this year.
Always a hot topic item in the yearly budget discussion is how much Kingsport plans to spend on repaving damaged roads throughout the city. In recent years, the budgeted amount has been $600,000 — not nearly enough for the BMA.
“The number one gripe I hear about and we keep getting further and further behind,” McIntire said.
Kingsport is responsible for nearly 400 miles of roads with the remaining 70 being the responsibility of the state and federal government. A couple of years ago, Kingsport needed to spend around $1.2 million a year to maintain its roads; now the figure is closer to $2 million, city officials said.
“The absolute minimum should be $1 million,” Phillips said.