KINGSPORT — The Board of Mayor and Aldermen recently got their first look at a portion of the city’s five-year capital improvement plan that includes funding for the renovation of J. Fred Johnson Stadium, a number of key road projects and the creation of a park for the new carousel downtown.
However, one alderman questioned whether the amount of money the city was spending on capital projects was enough to help with the overall growth of the Model City.
Every year during the budget process, the BMA is presented with a five-year capital improvement plan (CIP) that contains a number of projects and equipment purchases for the city, the school system and the water and sewer department.
Some items are fully funded within one of those five years; others are funded over a number of years. The items are paid for in a variety of ways, including cash, bonds, grants and state and federal dollars.
During a recent BMA work session, City Manager John Campbell presented his recommendation for the CIP’s general fund — the main operating fund of the city, covering such departments as police and fire, parks and recreation, and administration. The remainder of the CIP (water, sewer and minor funds) will be presented to the BMA in April.
In Fiscal Year 2014 (July 1, 2013, to June 30, 2014), Campbell has proposed spending $6.76 million on capital projects — $2.7 million toward the stadium project (with the remaining $1.7 million coming from seat purchases and scoreboard sponsorships); $1.4 million for phase two of the Sullivan Street widening project; $1 million for Cooks Valley Road improvements; and $400,000 for the creation of a small park adjacent to the carousel.
Smaller items on the FY14 CIP include $165,000 for design work on the Kingsport Public Library expansion, $100,000 toward the demolition of Legion Pool, $100,000 for land acquisition, and $200,000 to reconfigure the Press Street entrance.
City leaders have stated over the past several months that any new debt issued next fiscal year would not exceed the amount of debt rolling off at the end of the current fiscal year. In this case, the target number is $6.76 million, which is the same amount Campbell has proposed spending on general fund capital projects in FY14.
During the recent work session, Alderman John Clark asked Campbell if Kingsport was in a growth mode.
“To me the debt level is not structured for growth,” Clark said. “Should we, as a board, think through on where we are in the life cycle as a city? If we’re in a growth mode and want to grow to compete, then might we change our thought process on how we think about our debt structure?”
At the end of the 2013 fiscal year, Kingsport’s general fund debt is projected to be $110.6 million while total debt is projected to be $211.4 million. In FY12, the amounts were $116 million and $225 million respectively.
Kingsport’s charter limits general fund debt to 20 percent of the city’s assessed value. Under a stricter BMA-adopted guideline, general fund debt cannot go above 10 percent. The current percentage is 6.65 percent.
“It seems to me we’re trying to go with a debt level that’s very conservative,” Clark commented.
Mayor Dennis Phillips said to reach the 10 percent self-imposed limit, the city would have to borrow $50 million.
“There’s a difference in government and the private sector. You can do things to grow a business,” Phillips said. “I’m not sure, other than annexation, what we can do to attract people to Kingsport.”
Alderman Mike McIntire said Tennessee grew by 10 percent over the past decade, but that Sullivan County grew by 1 percent and that most of Kingsport’s growth has been through annexation. Assistant City Manager Jeff Fleming confirmed that excluding annexation, the Model City has grown by around 1 percent.
“Unfortunately, it’s been fairly stagnant,” McIntire said. “All of the quality of life stuff ... if we don’t have the jobs, we’re not going to get the people. We don’t have the high-paying jobs to get the people. If we can find ways to do that, I’m all for it, but I’m having a hard time justifying doing some of the things (on the CIP).”
Members of the BMA essentially explained that the $50 million difference in the current debt level and the 10 percent limit is a cushion that could potentially be used for a major project or the recruitment of an industry to Kingsport, such as with the Border Regions district.
In all, the general fund portion of the five-year CIP comes in at $45.7 million and includes funding of various projects through Fiscal Year 2018.
The CIP includes $7.6 million for the expansion and renovation of the Kingsport Public Library, $3.6 million for the creation of a park at the Legion Pool site, $2.7 million for the construction of a new fire station near the Tri-Cities Regional Airport, $2 million in improvements to the Kingsport Renaissance Center and $2 million to extend Martin Luther King Jr. Drive.