But by the end of the meeting, the BMA still had not made a decision of how much money, if any, the school system will receive next fiscal year. The BMA is scheduled to meet again Monday afternoon when a decision will likely be reached.
The BMA held a work session Thursday afternoon, the second one this week, to continue its review of the city’s 2014 budget. By city charter, the budget must be approved by June 30.
Earlier this week, City Manager John Campbell gave an overview of the budget, noting it is balanced with no property tax increase, but does include a 3 percent hike in the water and sewer rates for all customers next year. And while the school system has requested an additional $1.8 million in operating funds next year, Campbell offered no recommendation on the request.
On Thursday, Campbell presented a number of ways the Model City could generate additional revenue, money that could be earmarked for KCS or used to beef up the city’s paving fund — something the BMA says is not enough to meet current demands.
Campbell gave a list of possible cuts to the proposed budget, such as eliminating five new, partial-year positions ($100,000) and four existing positions ($120,000). Delaying pay raises and step increases for six months would save nearly $570,000; eliminating them entirely would save $1.1 million.
“I’d hate to be in a position to where we could not reward our employees,” Campbell said.
Every year Kingsport has a list of special programs it contributes to, from Kingsport Tomorrow to the Arts Guild to Educate & Grow, along with the Kingsport Chamber of Commerce, all to the tune of $2.4 million. Campbell said a 5 percent reduction to those programs would save the city about $70,000; 10 percent would be $140,000.
On the new fee side of the equation, Campbell said Kingsport could impose a solid waste fee or a garbage collection fee, something Bristol, Johnson City and Greeneville already have. In Kingsport, solid waste collection is covered by property taxes and is not a separate fee.
If Kingsport were to impose a $2 solid waste fee, nearly $500,000 would be generated, Campbell showed in his presentation.
Another potential fee, and one that got the attention of the BMA, would be a natural gas franchise fee, or basically a right-of-way fee imposed for allowing natural gas lines to run within the city. Bristol, Johnson City and Greeneville each also have a similar fee.
Campbell said he would be very surprised if a 5 percent natural gas franchise fee did not raise $600,000 given one large company located in town, but noted any such fee would include a cap on the total amount imposed.
“It would be unfair to one entity,” Campbell said.
Mayor Dennis Phillips said such a fee would be more doable than the other fees, and Alderwoman Valerie Joh said it would be comparable to Kingsport’s sister cities. Approximately 15 percent of the households in Kingsport are on natural gas.
At this point, Alderman Tom Segelhorst pointed out Campbell’s proposed budget is balanced as it is, and the BMA agreed that much like the cable companies, a natural gas franchise fee would likely be passed on to the customers.
Campbell’s proposed budget includes $600,000 for paving. Unlike last year when the money came out of the city’s surplus funds, this year’s paving money is on a dedicated funding stream. However, the BMA agrees this amount is not enough. A couple of years ago, Kingsport needed to spend around $1.2 million a year to maintain its 400 miles of roads. Now the figure is closer to $2 million, city officials said.
Phillips said any additional money earmarked for paving next year should be $400,000 minimum.
Campbell said if the BMA wanted a long-term funding source for paving, then the solid waste fee would be the way to go.
“What number are we trying to achieve? The $1.8 million (requested by KCS)? What’s the target?” Alderman John Clark said.
Phillips said that number will have to be determined Monday.
“To give schools any more money, the decision the board has to make is to raise property taxes or forgo raises,” Phillips said.
“Unless you come up with another revenue source,” Campbell said.
Joh said it would not bother her to raise property taxes a little, and Vice Mayor Tom Parham said the city needs to keep all city services in balance.
Clark said he could not vote to raise property taxes because Kingsport is already raising water and sewer rates and talking about a natural gas tax.
“I don’t think there’s four votes on the board to raise property taxes this year. You can scratch that,” Phillips said.
“You notice we didn’t put that on there,” Campbell said in reference to his list of options.
Alderman Mike McIntire struggled with the funding request from KCS, saying school system revenue is up 5 percent next year while Kingsport’s is down half a percent.
“It’s a tough situation to deal with,” he said.
Regardless, the situation will be taken up again on Monday.