City delivers first reading of $245 million budget


By Gary Gray

The financial auditing and operation of Johnson City’s public golf courses became a chin-rubbing “philosophical question” last week when city commissioners chose to revisit the subject at its first reading of the city’s $245 million 2018 fiscal budget.

An amendment to the budget was split, separating a proposal to change the Golf Fund from its current status as an enterprise fund and repositioning it in the general fund. The remaining amendment, which included changes for capital equipment, facilities, the general purpose school fund, as well as the addition of $513,000 for bank repairs at Science Hill High School, was folded into the budget, which passed unanimously on first reading.

“I have yet to hear a clear enunciation of why we should do this,” Commissioner Ralph Van Brocklin said about the city’s golf financials. “I don’t understand why we would want to take something that gives us clear information and change that.”

“…I asked for the rationale to do so at both the May 30 Agenda Meeting and the June 1 Commission Meeting, but never received any clear explanation of any benefit that would inure.  Nor was I given anything tangible to suggest that continuing as an enterprise fund hinders the golf division, city staff or the municipality.”

Van Brocklin went on to say that it is less likely that the commission will understand the poor financial performance of golf, if it is intermingled with the balance of the general fund.

“Transparency currently exists,” he said. “I’d like to see that continue.

An enterprise fund is designed to make money. However, that money — by state law — must go toward operational costs, in this case Pine Oaks and Buffalo Valley golf courses. This coming fiscal year, the courses are expected to pull in about $1.3 million, but expenses are projected to outweigh revenues by about $4,000.

The general fund includes basic services, such as police, fire and public works, and some commissioners say it is a philosophical flaw to move the Golf Fund into a bigger pot — more than $63 million in FY 2018.

“I’m willing to discuss it, but my concern is it will get lumped into the mass,” Mayor David Tomita said. “My initial thought is to keep it as an enterprise fund, which helps us manage it better. Enterprise funds are designed to be essential services, but you can decide whether you want to use it or not.”

And there’s the rub.

The public has opportunities to visit city parks and trails for free. Not so at municipal golf courses, which average about $30 for a cart and round of play. And, if operating expenses have been tough to meet, would placing the fund in the general fund help obscure that fact?

“I don’t want to run head long into changing something we’ve done for decades,” Commissioner Joe Wise said.

However, Wise also remarked that, “golf as an enterprise fund doesn’t make sense to me.”

Buffalo Valley, located in Unicoi, has for years been closely eyed by city officials regarding its economic viability. A group of investors started the course many years ago. It later changed hands to a private owner who sold the course to the city for about $1.2 million.

“I don’t see any benefit in operating a golf course outside the city limits,” Tomita said.

Placement of the fund will be back on the table June 15, at which time a second of three readings on the budget will be held.

The 2018 budget is balanced at $244.8 million, and no property tax increase has been proposed. The municipal rate is set to stay at $1.87 per $100 of assessed value for those living in Washington County, $1.83 for those in Carter County and $1.89 for Sullivan County.

Total expenses are a slim 0.5 percent above the current year, yet general fund revenue is budgeted at about $89 million, a more than $3 million increase over the current year. Property tax revenue is expected to increase by nearly 2 percent, and local option sales tax is showing strong growth this year with a nearly 4 percent hoped for in fiscal 2018.

More than $10 million is earmarked for Public Works’ continuing effort to build and renew infrastructure, including street resurfacing, completion of King Commons, upgrades at Knob Creek Road and Med Tech Parkway, the resurfacing of the Municipal & Safety Building, as well as a multitude of street, sidewalk and parking projects.

The city also will make its more than $8 million contribution this coming year to the new East Tennessee State University Fine and Performing Arts Center. Another $140,000 is budgeted for the city’s share of improvements at the Aerospace Park at Tri Cities Airport. The city is expected to contribute a total of $4 million to the park overall.

Another matter discussed was the timing and completion of the new, landmark sign at King Commons, the former downtown U-Haul site.

The Johnson City Development Authority, which has been working for several years to save the existing framework and construct a centerpiece at the park, has raised $83,250 so far, according to Dianna Cantler, Washington County Economic Development Council downtown development manager.

Commissioners and city officials have been extremely patient regarding completion dates, but an Aug. 3 target date was set last week, which is expected to coincide with the park’s opening.

“Some have given $10; some $10,000,” Cantler said about the private donations that are paying for design and construction. “It’s been a varied group. Today (June 1) our office phone rang off the wall when they heard there was a deadline.”

Cantler said the goal is to raise $86,000.

“What’s next?” Wise asked.

“We ask Mr. Pindzola (Phil Pindzola, Public Works director) to unhook the chain from the bulldozer,” Tomita commented.

Van Brocklin asked Cantler for assurance on the completion date, and she confirmed with confidence.

“I don’t want to nitpick,” Tomita said. “If it’s Aug. 3 and it looks like it does now, we might want to pull the chain back out.”

Finally, retiring Johnson City Fire Chief Mark Scott was honored for his service. Scott logged 30 years as a city employee. The department currently has an overall rating held by only two other Tennessee cities.

“I’m honored to be able to stand here and retire,” Scott said. “A lot of people in the fire department don’t get here. I really didn’t think I would make it to this level, but I did.”


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