KINGSPORT - The Kingsport Board of Mayor and Aldermen held a special budget work session Monday afternoon where City Manager John Campbell gave an overview of the proposed $139 million budget.
A balanced budget has to be approved by June 30 for the new fiscal year, beginning July 1.
Campbell kicked off the presentation by stating the proposed budget is balanced with no increase to the property tax rate.
"This budget is a very disciplined approach to try and make the city more competitive," Campbell said.
The proposed budget has no increase on the water rate for city residents. However, county residents on Kingsport water will see a 4 percent increase. Campbell said this increase would equate to about $1.28 on a typical bill and generate approximately $245,000 in revenue for the city.
As for the sewer rate, the percent increase dropped from 3.8 percent to 3 percent for city residents. County residents on city sewer will see an 8 percent increase next fiscal year. The increase will generate around $355,700 in revenue.
Campbell said city staff had been reasonably conservative in revenue estimates for the coming fiscal year.
The proposed budget has property tax revenues growing by 1.2 percent, or $320,500, to $30.5 million. Kingsport's certified tax rate for Sullivan and Hawkins counties will be $2.26 per $100 of assessed value.
"That's not to say we've not had good growth. We have," Campbell said but added that the city took a $248,000 hit in personal property tax revenue with the closing of the Quebecor facility in Kingsport.
"We should be in very good shape next year … with the growth we've seen this year and because we won't have to take this hit," Campbell said.
The proposed budget estimates local-option sales tax collections and regional sales tax collections will increase by 3 percent. Sales tax collections in the Model City for the first nine months of the current fiscal year are running about 5 percent ahead of projections.
Campbell said the projected amount of sales tax collections includes a Kingsport business relocating to another city.
No one at the city mentioned the business by name, but the Kingsport Sam's Club is expected to close soon, while similar stores in Johnson City and Bristol, Va., are expected to open.
However, Campbell said the Kingsport Pavilion project would have a major impact on the city's sales tax collections once it comes online.
The project is a 78-acre shopping complex, with more than 30 stores and restaurants, including Target and Kohl's. The center is expected to open in October.
"We won't see the impact until January. We didn't see the full impact of East Stone Commons until a whole year had passed," Campbell said.
Overall, Campbell said Kingsport will see an almost $2 million revenue increase next fiscal year and close to $700,000 in excess revenue over expenditures by the end of the current fiscal year.
Last week, Kingsport City Schools officials presented their fiscal year 2008 budget to the BMA, which included a request for $455,000. Campbell said the city has no extra money budgeted for programs at KCS.
"We anticipate that the schools should be able to balance their budget," Campbell said.
Campbell is proposing 15 new positions within the city for the next fiscal year - five police officers, six firefighters, a librarian, deputy city manager, internal auditor, and a building inspector specializing in electrical work.
The cost of the officers and firefighters would be $324,100, and the other positions would be $225,900 for a total cost of $550,000.
Police Chief Gale Osborne said annexation would add additional residences, roads and square miles of land, thus requiring more patrol officers.
Kingsport is also planning to build a new fire station in the Rock Springs community and looking to build another on Stone Drive.
The next budget work session is scheduled for Thursday afternoon.