East Tennessee city on the defensive over spending in a recession
Apparently, the announcement by Eastman Chemical’s $100 million cost reduction has gotten the attention of Mayor Phillips and City Manager John Campbell.
There was an article in the Kingsport Times-News on December 17, 2008, that was a press release (below) issued by the City of Kingsport, Tennessee and on the same day of Eastman Chemical’s announcement in the Times-News.
It has been my view that the Kingsport officials have been in denial that the region is in a recession because of the way they like to talk about how great things are going in Kingsport and their out of control spending.
I feel the Eastman announcement shocked them that things aren’t as well off in Kingsport. The big issue is that there will be less money coming to the city government because of the economy.
The press release below is the City of Kingsport‘s attempt to put their “spin” on how great things are going in Kingsport. It appears that they are defending their out of control spending such as the MeadowView Convention Center expansion and the aquatic center.
No where in the press release do they mention that they are cutting back and it appears that it is business as usual. Citizens have been cutting back for some time and there was a recent directive by the State of Tennessee to reduce spending by as much as 20 percent.
University of Tennessee executive staff will take a voluntary 5 percent pay cut and relinquish their UT-provided cars. UT staff take pay cut
Recent announcements by Domtar and Cooper Standard to shut down over Christmas because of lack of orders also shows that the recession is affecting local firms. Domtar, Cooper Standard to shut down over Christmas
City Manager, John Campbell stated “Investments in quality of life, hospitality and tourism, including the aquatic center and MeadowView, will help Kingsport begin to take on qualities of a true destination city,”
Wow, this is news that Kingsport is going to be a tourist attraction. Could John Campbell provide a list of attractions so the locals can visit them. Will the citizens aquatic center be shared with the tourists?
The City of Kingsport recently contracted with a Michigan firm to do a study on directional signs to help direct motorists and pedestrians to various city destinations. This study will cost $81,410 and does not include the signs. Save the money on the study. Here are some suggestions for the signs; Dollywood 95 miles, Nashville 281 miles, Asheville 83 miles, etc
Campbell stated . “But we know that Greater Kingsport has one of the higher personal saving rates in the country, and that helps position the region to weather the storm.” How does he know about the personal saving rates of citizens?
Anyway, it really smarts that Campbell expects citizens to use personal savings to weather the storm while the city’s spending is out of control. The city would not even stop or give back to the citizens the regional sales tax after the tax had paid off the current convention center.
It is apparent to me that the City of Kingsport is not going to stop it’s spending on such projects as Meadowview expansion, aquatic center, V.O. Dobbins center, etc. The press release below is their attempt to justify the spending.
If money gets tight for the city, what I would like to see is for Mayor Phillips to propose cutting city services like garbage collection to every two weeks, reduce police and fire protection coverage in order to continue the spending pattern that the city has shown to the taxpayers in the past. Go ahead Mayor Phillips, make good on your threat’s about cutting services.
It could get very interesting in an election year, if the mayor did push for cutting services. Fasten your seatbelts if he does.
Kingsport, what are you doing to reduce spending?
Kingsport officials say region, city positioned to succeed despite national downturn
KINGSPORT – While regretting the impact of the national recession on a major regional employer, city officials said Wednesday that Kingsport and the region remain positioned for success through economic diversification and a strong focus on education and workforce training.
“As difficult as today’s announcement by Eastman Chemical is, it dispels a number of rumors about what we can expect going forward,” Mayor Dennis Phillips said Wednesday. “It also serves as a positive indicator of how well positioned that company is today as compared to a decade ago.
“At a time when many companies like Toyota are talking of leaving a brand new plant shuttered, or, in the case of Dow Chemical, laying off thousands, Eastman is positioned to meet current economic realities with far more limited measures. And that is really a success story for Kingsport and the region.”
Meanwhile, other indicators of continuing buoyancy in Kingsport and the regional economy are made clear with AGC Industries, formerly AFG Industries, recently announced the $34.6 million reconstruction of a glass manufacturing plant in Church Hill, creating 120 new jobs by 2010.
“Just this afternoon, we expect an important positive announcement from Domtar,” Phillips said. “And through the continued work of NETWORKS, KEDB and city staff, we are working to diversify our economy, recruit new jobs and encourage existing employers to expand.”
City Manager John Campbell indicated that continued economic diversification remains vital to the long-term success of Kingsport.
“Investments in quality of life, hospitality and tourism, including the aquatic center and MeadowView, will help Kingsport begin to take on qualities of a true destination city,” Campbell said. “At the same time, by offering more opportunities in higher education, we help create the workforce necessary to attract new employers and expand existing Kingsport businesses. There are both short term job gains, and longer term strength, to be expected from the investments the board is making or considering today.”
Working within the city staff structure, Campbell said the creation of a new economic researcher position will boost the internal and external capacity for recruiting retail, home builders, medical, and other services.
“We are also strengthened by the fact that Kingsport and the region continue to do well in terms of the appreciation of home values, with depreciation being a major cause of much economic difficulty nationally,” Campbell said. “Kingsport has ranked 14th in the country for much of the year in terms of appreciation. The key investment that most people own, their home, remains a sound investment in Kingsport.”
While making strategic investments in key areas of return – education, workforce retraining and economic diversification through hospitality and tourism – Campbell indicated that continued softening in the regional economy is to be expected given national conditions.
“Nationally, October was the month everything shut down, particularly in the retail sector, and we expect to see some softening in that area,” Campbell said. “But we know that Greater Kingsport has one of the higher personal saving rates in the country, and that helps position the region to weather the storm.”
A report by East Tennessee State University shows that Tri-Cities’ retail sales outperformed those of Knoxville, Chattanooga and Tennessee overall.
“If you look back since 2006, we’ve had $370 million in new construction, much of that in the retail and commercial office sectors,” Campbell said. “That is definitely helping Kingsport recapture lost market share.”
Looking forward, with ongoing work on projects like the reuse of Quebecor, the pending mall renovation, and expansion of Meadowview Convention Center, 2009 could still be a good economic year in Kingsport.
“No community is immune to the economic circumstances of the rest of the country,” Campbell said. “But we’re doing all we can to retain and recruit the jobs of tomorrow.”