No WhiteWash!

The first quarter retail sales numbers for Kingsport, TN area are out and I have not heard anything from the City of Kingsport concerning the recent decline in retail sales in the first quarter of 2009.

It has been reported in the media that Kingsport’s retail sales were down 2.8 percent in the first quarter.  What this means is that the first quarter retail sales are down 2.8 percent as compared to the same quarter last year.  What is not reported that the first quarter of 2008 was down 3.5  percent as compared to the first quarter of 2007.

The graph below shows that the 2009 first quarter retail sales are less than first quarter 2006.  Data for the retail sales numbers are from ETSU

The table and graph below show the net growth/loss after inflation is applied.  Data for inflation is from InflationData.com

While this is just one quarter, one needs to look at the overall picture for the entire year and previous years.  The graph below shows the retail sales percent growth after inflation for the Kingsport area for years 2001-2008.  Click here for much more detail on previous years.

It should be pointed out that in the last 8 quarters, Kingsport has only had two quarters that have been positive growth when compared against the same quarter the previous year.  The two positive retail sales growth quarters can be attributed to new store openings.  While it may look like it good growth, one needs to keep in mind that this is incremental growth.  The real challenge will be whether Kingsport can keep up this growth given the unemployment situation in Kingsport. Another real question is how much money can you get the citizens to give up in a bad economy?  I also might add that the way the second quarter of 2009 is going, it  may make another negative growth quarter.

No WhiteWash here, just reporting the facts.

I have written many posts concerning Kingsport’s regional sales tax that has served it’s purpose by paying for the MeadowView Conference Center.  The bond for the conference center was paid off in 2007.

The City of Kingsport, according to the proposed 2009-2010 budget will be using the money in areas that was never intended when the voters voted for a 1/4 percent regional sales tax.

In the table below, the money from the regional sales tax is divided between three funds.  The funds go into the Meadowview Convention Center, Cattails Golf Course, and Kingsport’s General fund.

The money that goes into the General Fund can be used in any way that the city want to spend it.

Regional Sales Tax Fund

The MeadowView Convention Center revenues and expenditures below show that the convention center is operating at a loss.  $1,325,100 is needed from the regional sales tax fund to make up the loss for the year.  Also note that the revenue from the  $102,300 room surcharge, and $158,600 FF&E Fees is not much income for the taxpayers investment of $19.5 million to build the convention center.

The City of Kingsport has voted to spend an additional $15 million to expand the convention center.

MeadowView Conference Center Fund

When the voters voted for the regional sales tax to be used for the convention center, I am sure that the golf course had not been dreamed about.  But we see that $763,400 from the regional sales tax fund is being used for the Cattails Golf Course and $658,000 spent for debt service. As we can see below in the table, the golf course is not breaking even and the investment of $6.2 million has not been a good investment of taxpayers money.

Cattails Golf Course Fund

Overall the taxpayers have invested $25.7 million in the current MeadowView Convention Center and Cattails golf course.  From the budget items above he convention center and golf course do not make money. The City of Kingsport is spending another $15 million to expand the convention center into an executive conference center.  This would make about a $41 million investment in MeadowView and would not include interest.

1/4 percent Regional Sales Tax Fund Revenue $2,816,600

Transfer to Cattails $   783,100

Transfer to MeadowView CC $1,233,500

Transfer to General Fund  $   800,000

A lot of us have bitched, complained, etc about things that are happening in the City of Kingsport Government.  The issues of the regional sales tax for Meadowview not being stopped or returned back to the citizens, aquatic center, MeadowView Convention Center Expansion, out of control spending, etc.

I got an email (below) from Ben Cunningham with Tennessee Tax Revolt offering to help us out.  This may be what we need to give us the kick in the rear to get something done and show the elites that its not about them and the special interests groups. The petition can force the issue to a vote by the citizens.

Email

If anyone in Kingsport or thereabouts is interested in starting a petition drive to oppose a general obligation bond issue (or any other reason, sales tax reduction, home rule govt, etc)  I’ll be glad to come to Kingsport (or anywhere else in the State) and help to start a petition drive. ….that’s what we do.

www.TnTaxRevolt.org
Tennessee Tax Revolt, Inc. is an all-volunteer, non-profit, non-partisan, statewide taxpayer advocacy group. We are working to protect the family budget from excessive taxation and for open, accountable government.

Check out our Taxpayer Information Center for the most complete set of informational links to be found in Tennessee:
http://www.tntaxrevolt.org/ttr-resource-page.htm

Also, check out the Ben’s Taxing Tennessee blog

A few suggestions for petitions

• Funding for the Aquatic Center must be approved by the voters
• Establish Alderman districts to better represent citizens on issues
• Abolish the 1/4 cent Regional Sales Tax
• Voters must approve/disapprove MeadowView Convention Center Expansion

Action Needed: What I need from you are your thoughts?  Do you think it is a good idea?  Would you help in a petition effort?  Can you get others to help get petitions signed?  I need you response quickly.

Click on the email icon below to send your thoughts and comments.   Spread the word about this post and encourage people to respond also via email.

Below are sample citizens petitions from Tennessee Tax Revolt resources page and a few others that I found.

Samples of Citizen Petitions
Giles Cnty Petition to implement a County Financial Management System per Tennesssee Code Annotated 5-21-126
Wheel Tax Petition used in Carroll County
Carter County Petition to Repeal the Local Option Sales Tax
Roane County Petition calling for a referendum on jail construction bonds
Memphis Petition calling for Charter Commission Election
Metro Nashville Let the People Vote on Property Taxes Charter Amendment Petition
Metro Nashville Term Limits Charter Amendment Petition
Anderson County Petition to raise sales tax for County Schools
City of Kingston Mayor and Council Recall Petition
Petition for Ouster of Coopertown Mayor
Writ of Ouster for Coopertown Mayor by District Attorney
Oak Ridge Petition asking for a referendum on Shopping Center Bonds
Petition for Metropolitian Government Sullivan County
Petition to amend the Shelby County Charter to preserve five Constitutional offices
Roane County, TN Bond Protest Petition
Robertson County Bond Protest Petition
Spring Hill Bond Protest Petition
Giles County Charter Petition

The December, 2008 unemployment rate for the City of Kingsport was 8.4 percent.  This rate is expected to go higher due to recent layoffs as the recession deepens.

Kingsport, as I have said many times needs to get industry to locate here that offer good paying jobs.  More retail jobs aren’t needed.  Get the good paying jobs first and then retail jobs will open up.

After giving it much thought, I have come to the collusion that the City of Kingsport, Chamber of Commerce, Networks, and Sullivan County are not capable of getting the type of jobs that the area needs.  I’m sorry that those are strong words, but it is the truth.  Look at the facts.  Sure, there have been some gains, but these have been mostly in the retail area.

We need the involvement of the State of Tennessee to help get jobs here.  The State was able to help Chattanooga and Clarksville get new manufacturing firms to locate in those cities and   North Carolina was able to woo Google to locate to Lenoir, NC.

Kingsport has relied too long on Eastman and it is time to get other firms here.  Get rid of the mindset that economic growth is retail and get new people in those organizations that can go after manufacturing firms.

The Higher Education Center is good, but I get the impression that the city thinks that firms will come to the city in droves because we have a bunch of smart cookies here.  Upper Mississippi, I am sure did not wait to build a higher education center to attract car manufactures or did Lenoir, NC wait to have the type of employees that Google wanted trained before going after the Google business.

The time to act is now!  The population of Kingsport has declined –1.6 percent from year 2000-2007.  Having more educated people trained at the Higher Education Center and the lack of jobs that would be attractive to them will insure that the declining population will get worse as they look elsewhere for employment.

In this recession, the City of Kingsport, Tennessee has decided to go ahead with borrowing $34.77 million to fund various projects listed below.  While companies and citizens are having a difficult time in this economy, the city is going ahead with the spending of taxpayers money.  The addition of the $34.77 million would put the total debt for the City of Kingsport around $190 million.

According to Moody’s the three bonds have been issued and are listed below.  The dollar amounts below do not include interest expense.

General Obligation Public Improvement Bonds, Series 2009A
Sale Date: 22 JAN 2009
Sale Amt: $12.31 million

The detailed spending for this bond is listed in the table below.

General Obligation Bonds, Series 2009B
Sale Date: 22 JAN 2009
Sale Amt: $7.15 million

The bond above is for rebuilding of the V.O. Dobbins Community Center as well as the creation of a new non-profit center.  This non-profit center will take tenants away from the private sector, which means, the City of Kingsport becomes a competitor with it’s own tax customers.  Alderman Marsh and Shull voted against this project.

Local Option Sales Tax Revenue and Tax Bonds, Series 2009C
Sale Date: 22 JAN 2009
Sale Amt: $15.31 million

The above bond is for the MeadowView Conference Center Expansion.  This expansion is a very controversial subject with many citizens because of it benefiting special interest groups.  The current convention center loses money and it wishful thinking that the expansion would break even.

This new $15.31 million bond for the convention center expansion combined with the $25.7 million already spent for the current convention center and Cattails Golf Course would make it $41 million that the taxpayers will have poured into MeadowView.  The Cattails and the current convention center do not make money.  Alderman Marsh and Shull voted against this project.  See link for additional information on Meadowview

The Kingsport Times-News article, Fiscal year 2008 audit OKs Kingsport financial health does some explaining on the recent audit of Kingsport’s finances.

However there seems to be some things left out or a press release issued by the city that never made it into the newspaper.

The press release below in the last two paragraphs state that the five enterprise funds had $16.3 million in cash.

Enterprise funds have to be self-supporting and we know that the Cattails Golf Course does not make any money and the MeadowView Convention Center ended the year with a $1.3 million loss

This would mean that the city is running a profit center in the water and sewer departments.  The raising of water and sewer rates each year has helped this cash position.  How else could they have gotten all of this extra cash?

If the City of Kingsport is doing so well, then how come they did not want to refund the 1/4 percent regional sales tax, back to the citizens when the MeadowView Convention Center was paid off?   Alderman Marsh and Shull tried to get the regional sales tax refunded back to the citizens but was voted down by Mayor Phillips, Vice Mayor Mallicote, Aldermen Munsey, Joh, and Shupe.

Press Release

KINGSPORT – Kingsport garnered a clean opinion of its financial statement for fiscal year 2008 from auditors Blackburn, Childers & Steagall, and rectified all four findings reported in the prior year.

“This audit represents what the citizens of Kingsport expect from their local government, transparency in financial reporting and responsibility with the taxpayer dollar,” Kingsport Audit Committee Chair and Alderman Larry Munsey said Tuesday. “I’m pleased to note that city finance staff corrected four items identified in last year’s audit, while auditors, whose job it is to go over things with a fine-tooth comb, only found three items in need of some work going forward into 2009. By any measure, our city continues to stand on firm financial ground.”

Auditors noted in their 2008 findings the need for a change in the way property purchases and sales are recorded by the Kingsport Industrial Development Board; better record keeping on the disposition of city capital assets; and better segregation of duties within payroll processing.

“We’re very pleased with this report, and already have projects underway to address the findings on capital asset recording and payroll processing,” Kingsport Finance Director Jim Demming said Tuesday. “The third finding on KIDB is just a matter of changing from net reporting to include all costs related to property acquisitions and sales.”

Demming also noted that the addition of a new internal auditor position and realignment of finance staff duties should quickly correct the findings.

Meanwhile, as of June 30, Kingsport posted $14.84 million in its unrestricted fund balance for 2008, with another $3 million to be added over the next few years as the general fund is repaid funding it advanced for the construction of Cattails Golf Course. Board policy is to maintain a minimum of $11.4 million at all times.

City Manager John Campbell said the pace of city government has quickened with regards to a number of key areas, including the development of a higher education center; greater internal support for job recruitment and retention efforts; expansion of commercial and tourism development; and implementing technology to increase efficiency.

“We have the staff in place to ensure we offer the greatest transparency possible,” Campbell said. “At the same time, we continue to operate well within the self-imposed debt limit of 10 percent of assessed property value, with new capital projects funded by the debt service roll-off as old debt is paid off.

“Without a doubt, the Board of Mayor and Aldermen is making sound investments that position our community for continued growth, which is how we keep property taxes low for everyone.”

Kingsport City Government is organized into six reporting units, starting with the general fund which covers emergency services, development services, leisure services and administration.

Five enterprise funds include the water fund, for the production and distribution of clean water, funded solely by user fees; a sewer fund, again self-supporting through user fees; a solid waste fund for garbage collection and disposal, reported separately but funded through property taxes; and two funds that cover MeadowView Conference Center and the golf course.

Collectively, enterprise funds reported $16.3 million in cash as of June 30, a strong cash position Campbell said he intends to maintain.

There are four positions on the Kingsport, Tennessee Board of Mayor and Alderman that are available for the term starting on July 1, 2009.

The current BMA members whose terms will expire are Mayor Dennis Phillips, Alderman Valerie Joh, Alderman Ben Mallicote (the vice mayor) and Alderman Pat Shull.

Any person who is a qualified voter of the city and who has resided within the city for at least one (1) year next preceding the election shall be eligible to election to the office of mayor or alderman.

Residence within any area annexed in a year preceding an election shall be counted in meeting the residence requirement of this section.

The City is governed by a seven member Board of Mayor and Aldermen, elected at-large and on a non-partisan basis for four-year staggered terms. The exception to this rule is that the Mayor is elected at-large for a two year term. Elections are held in May during odd numbered years. The new Board of Mayor and Alderman is seated on July 1 of each election year.

If you have a desire to be on the Kingsport Board of Mayor and Alderman, you will need to pick up your petition at the below location.   The deadline to submit completed petitions is noon on February 19, 2009.  25 signatures from registered voters are required on the petition.

City elections:  2009 schedule

Feb. 19 – Candidate petitions due in county elections office
April 20 – Last day of voter registration.
April 29 to May 14 – Early voting period.
May 19 – Election Day

On page 37 of the Kingsport, Tennessee 2008 Annual Report, it shows a Meadowview Convention Center operating loss of $1.3 million for the year.

Mayor Dennis Phillip and his band of followers (Mallicote, Joh, Munsey, and Shupe) want to invest $15 million more to make this convention center larger.

Over the years the Meadowview Convention Center and Cattails golf course have been subsided (borrowed) over $3 million dollars from the General Fund.  This money needs to be paid back to the General Fund plus interest.

Can they spend more money on Meadowview?  Yes they can!  Mayor Phillips and his gang got the majority votes.  Can you vote for leaders that reflect your views and positions, yes you can.

See also the following link concerning MeadowView

There will be an election in May for Kingsport, Tennessee voters to select four people to be on the Kingsport Board of Mayor and Alderman.

Now is the time for candidates to begin thinking about announcing their intentions.  There are three Alderman and Mayor positions available.

If the candidates wish to submit their views/positions, I would be happy to post them on this blog.

See also the following link:  Help Wanted: Good Political Leaders

You can submit your information via email using the email icon below.