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Kingsport leaders plan bond issue for capital improvements

August 17th, 2008 12:00 am by Matthew Lane

KINGSPORT — The Model City plans to go to the bond market later this year to cover the cost of a variety of projects in the city’s capital improvement plan, including the renovation of V.O. Dobbins Community Center and the expansion at MeadowView Conference Resort and Convention Center.

Every year the Board of Mayor and Aldermen approves a five-year capital improvement plan (CIP) that includes a variety of projects. Some of the projects are fully funded within one of those five years, while others are funded over a number of years.

Proposed projects for the 2009 fiscal year, include improvements to Eastman and Domtar parks, renovations at V.O. Dobbins, improvements to several city fire stations, money for the Kingsport Riverwalk project and an expansion at the Justice Center.

The total cost of the projects is just under $7.7 million. The CIP has been approved by the BMA, but the bonds have not been approved. City Manager John Campbell said the city would likely go to the bond market in October.

Earlier this month the BMA got their first look at a proposed $14 million expansion project at MeadowView — a 30,000-square-foot executive conference wing catering to high-end meetings, retreats and conferences. City leaders are hoping to do the project around the same time as the Marriott hotel adds 110 rooms to its facility over the next year.

Campbell said he thinks the money for the MeadowView expansion could be rolled into the $7.7 million CIP and done in one bond issuance. The MeadowView portion would likely be paid back through the city’s regional sales tax — the quarter-cent added to the sales tax rate in 1992 to pay for the construction of the facility.

“That was one of the obvious uses for that money when it was set up,” Campbell said.

As it stands now, all of the projects being funded in the CIP for next year are still on the list, even though one city official said the Justice Center improvements may be held off a year.

The Justice Center improvements call for expanding the building with either a third floor or an adjacent expansion and consolidating all court functions under one roof. The CIP has $3.5 million earmarked for the project over the next four years.

“I don’t know if that’s the case or not,” Campbell said about whether or not the Justice Center improvements would be removed from the bond issuance. “As we get closer to doing that bond issue, we’ll look hard at all those things approved tentatively by the board in the CIP.”

Campbell said the five-year CIP is a good overall planning tool, but the city has to reassess constantly every time it moves ahead with a major project.

“I’d like to have that in there. It just depends on where we are and if the timing is right,” Campbell said. “All of it is still in there. As we get closer, we’ll figure out which (project) would go now or next year.”

As of June 30, Kingsport’s general fund debt is $80.7 million; the city’s total debt stands at $156 million a 20 percent increase from the $129.6 million debt level in fiscal year 2007.

If all of the projects are approved for funding, Kingsport’s total debt would increase by $21.7 million. By June 30, 2009, Kingsport’s finance records show $13.5 million in debt rolling off.

With $21.7 million in debt being added and $13.5 million coming off, Kingsport’s total debt would be approximately $164 million at the end of the 2009 fiscal year. General fund debt will be about a wash, with roughly the same coming off as being added.

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