City Budget gains final approval, council also approves hotel/motel tax and derelict hotel's days are numbered

Crossville city council has approved the third and final reading of the budget for the upcoming fiscal year and approved an unchanged tax rate at 59 cents per $100 of assessed value.

The first version of the budget presented to the council stood at $1.5 million red and with a number of items removed and a few other items added to the budget the final version came in at just over $1.1 million in the red. Because the city has over $12 million in the general fund balance, the city finances are not in the red but the annual expenditures exceed the estimated revenue for the fiscal year.

Crossville City Council, L-R, J.H. Graham, Danny Wyatt,

Mayor James Mayberry, Pamala Harris, and Scot Shanks.

The city's budget shows revenue totaling $19,425,353 and expenses of 20,597,073 with a final deficit for the year of $1,171,720.

Budgeted spending totals for the Police Department stand at $4.1 million, the Fire Department at almost $2.9 million and the street department at almost $2.4 million. Those 3 department's expenditures make up nearly half of the city's general fund budget.

The city's water and sewer budget do not utilize tax funding and their revenue is from the sale of water and sewer service.

The property tax rate of 59 cents, unchanged from the previous year was approved under the consent agenda and the budget was approved unanimously during the meeting. A public hearing on the budget elicited no comments from the citizens.

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Council also unanimously approved putting the hotel/motel tax into place on hotels operating within the city limits. This would go on top of the county hotel/motel tax that has been in effect for a number of years. The city adds 2 percent on top of the 7.5 percent tax the county charges and all these fees are over and above any sales taxes.

Council approved the request of property owners along a block of Thurman Avenue to return the road to two way traffic. The road has been one way for several years. The road is somewhat narrow and the planning commission had not approved the change but the city council has the final say on the matter and it was approved with 4 votes in favor and council member Pamala Harris abstaining. The parking along the road will be left alone.

Council approved a reduction in the inspection fees for the construction of the new Crab Orchard School. The fee to the county would be $21,000 but instead, the city council approved charging the cost of the time and travel not to exceed $7,000.

Under the city attorney's report, Will Ridley reported to the council that the court had approved the city's request to demolish the condemned Inn of the Cumberlands at Tennessee Avenue and Sparta Highway. Ridley said he was not seeking council approval for that action yet as he was still looking into some property ownership issues.

Condemmed Inn of the Cumberlands

Under public comments at the council meeting, downtown property owner Shirley Hughes expressed concern about parking in the downtown area especially about workers using space all day that are in front of other businesses. Hughes said she felt that there needed to be a parking lot for workers, especially county courthouse workers that would not interfere with downtown businesses.   

Final Approval of 18-19 City Budget and Hotel/Motel tax expected at Council's Regular June Meeting

Crossville City Council should give final approval to the 2018-19 fiscal year budget during the meeting Tuesday, June 12 and approve the new hotel/motel tax as well.

Crossville City Council members L-R: J.H. Graham,

Danny Wyatt, Mayor James Mayberry, Pam Harris

and Scot Shanks.

The schedule for council's regular meeting night starts at 5 PM with the audit committee, a public hearing on the 2018-19 city budget at 5:30, beer board at 5:35 and the solicitation board at 5:55 PM. The regular agenda gets underway at 6 PM.

The third and final reading of the budget is expected to pass easily. The budget shows revenue totaling $19,425,353 and expenses of 20,597,073 with a final deficit for the year of $1,171,720. The city holds a fund balance of over $12 million dollars to cover the additional expense over revenue.

The city's property tax will remain unchanged at 59 cents per $100 of assessed value.

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The council is expected to approve the new hotel/motel tax by the required supermajority as those funds have already been incorporated into the budget. The city originally requested a 3 percent tax on hotel rooms in the city over and above the county's 7.5 percent hotel/motel tax. That would have made Crossville one of the highest taxed in the state. The matter had to be approved by the Tennessee General Assembly and they reduced the tax to 2 percent before sending it back to the city council.

In other matters on the council agenda, they will consider a waiver of fees for inspections on the Crab Orchard School construction, consider contracts for the sale of 11 acres in the Interchange Business Park to an industry identified as “Project Colony” and a lengthy list of annual purchase bids.  

Additional Story on June's city council meeting at this link.

Crossville City Council Discusses Economic Development Partnership Opportunities and Use of Hotel/Motel Tax

During the Crossville City Council's second work session on the 2018-19 fiscal year budget, a discussion of the use of the proposed Hotel/Motel tax led to a discussion of future plans for economic development, business and industry recruitment.

Crossville city council work session

According to City finance director Fred Houston, he expects the new revenue to be handled as a separate enterprise fund in the city budget and he has looked at the estimated $200,000 revenue and earmarked $10,000 for the Sports and Events Committee plus $45,000 for the city's expense of the visitor's center in partnership with the county.

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Later in the discussion, it was pointed out that in the first year because the collection of the tax is delayed quarterly the first year's revenue would be closer to $150,000.

City Manager Wood explained that an additional $28,000 could be used for work on the proposed retail development on 127-N. He added the remaining funds could be used to help fund the chamber or the Playhouse other tourism and economic development activities.

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Council discussing the possibility of partnering with Roane Alliance or the Highland Initiative on economic development and looking at budgeting for such a buy-in.

City Manager Greg Wood has been investigating the possibilities and said both groups are interested in talking to the city about such a partnership. Wood added that Roane County was willing to discuss such a partnership but seemed less eager than Highland.

Councilman Danny Wyatt said the groups are regional and those kinds of partnerships are being pushed at meetings like the Governor's Conference.

Mayor James Mayberry added that he felt like Cumberland County was like a stepchild stuck out at the end of the Upper Cumberland Development District (UCDD) and UCHRA. “Our region is Cumberland County, Fentress County, and Bledsoe County,” added Mayberry. He said that the UCDD was trying to generate interest in a sub-region to include Cumberland, Fentress and Bledsoe Counties as a cooperative economic development group.

Councilman J. H. Graham commented, “That may be the best idea I've heard in a long time.”

Wyatt commented, “You've got to fit in somewhere. The definition of a fool is to keep doing the same thing and expecting different results. It has not been working.”

Mayberry asked the chamber's Brad Allamong how many site visits had come to Crossville and the response was 9 since July of 2017. Allamong added that the city made a huge investment in the Interchange Business Park of a quarter million and the county is in for a quarter million for the grant of half a million. He added that just this week ground was broken and work had begun on the 200,000 square foot pad.

“Now we're going to have something to market,” added Allamong. He also cited the Targeted Industry Study pointing out he had a list of hundreds of businesses that match with the area's current resources. Allamong continued that the next step is targeting industry currently in the high tax states. He said it was a similar idea as retirees that move from higher tax states to lower tax areas like Crossville.  

CIty Council approves Hotel/Motel Tax for a 2nd Time Over Concerns of local Hotel Operators.

Even though several Crossville hotel operators showed up to express concern about the city's plan in increase the hotel/motel tax the city council approved the second resolution necessary to send the matter on to the General Assembly.

With the county's current tax at 7.5 percent, sales tax at 9.75 percent and an additional 3 percent proposed by the city the total tax on a hotel room in Crossville would be 20.25 percent. As of 2015, only one county in Tennessee had a higher hotel/motel tax rate than the amount that could be charged to visitors if the matter is approved.

City Council, city manager, and city attorney meet to

discuss the city's proposed hotel/motel tax.

The motion to approve the resolution for the second time as required in the state law was made by Councilman Danny Wyatt and seconded by councilman J. H. Graham.

David Padgett with the local Hampton Inn told the council while travelers just passing through might not be affected, his corporate clients would since they set budgets and if the cost rises they would likely cut back on their nights staying in Crossville. According to Padgett, the additional 3 percent city tax on top of the 17.25 percent for sales tax and the county hotel/motel tax represents a 17 percent increase in the tax on local hotel rooms. “That's pretty substantial,” added Padgett.

Crossville hotel operators came to express their thoughts

about the proposed tax.  David Padgett of the Hampton Inn, center 

spoke on behalf of other local hotel businesses

With the local market softer and Padgett saying his occupancy rate stands at 72.35 percent instead of the 85 percent of larger communities like Nashville, Knoxville, Pigeon Forge, areas that have more to offer in amenities outside of tourism like better restaurants and attractions.

“I'm actually OK with an increase, but let's phase it in over a while,” urged Padgett.

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Mr. Graham outlined the reasons for the proposed action, “This tax, if approved by the General Assembly, will be used for the increase of tourism, to provide more events and more functions to attract more individuals to stay with us in this area.”

In comparison to the hotel/motel tax for Cookeville, they charge 15.75 percent total and have no city hotel/motel tax and are now 1.5 percent less than Crossville but that difference will increase to 4.5 percent less if the Crossville increase goes through. Mayor James Mayberry said he was not sure if that difference would save anyone money with the cost of driving from Cookeville to Crossville though the hotel operators pointed out that if a ball team or other group needed several rooms that difference would add up and could make the difference where people decide to stay.

City Manager Greg Wood said that one of the reasons the city is looking at the tax is because the county does not use revenue in the way the city plans to.

Council Member Pamala Harris said she could see both sides and that there were more things to do in Crossville than just the State Park and Golf.

The Crossville Cumberland Co. Sports and Event Committee was briefly discussed and Doug Parkey who is working to organize the group told the council that group planned to maximize the use of the facilities the city currently has, look at what possible facilities the community might need and recruiting sporting and other events to the community like festivals and concerts. Parkey pointed out that he expects there to be donations from businesses and others to support the council and that not all the funding would come from the new tax.

All four of the council members present voted in favor of the measure and sending the request for action to the state legislature. Councilman Scot Shanks was not present at the meeting.   

Agenda Released for City Council Special Called Meeting Thursday January 25 at Noon on Proposed Hotel/Motel Tax

Crossville city council will meet in special called session at Noon on Thursday, January 25 for an expected brief meeting.

The Main item on the agenda is the required second approval of a resolution requesting the Tennessee General Assembly approve a change to the Crossville City Charter allowing the city to assess a hotel/motel tax proposed at 3 percent. 

Crossville City Hall

In addition, the resolution requests the legislature to approve a waiver to actually allow the city to legally assess the tax.  The state has issued a number of such waivers in the last few years as the law does not allow both the county and city to assess the tax unless it was done prior to 1988 or whichever entity instituted it first.  The County currently charges a 7.5 percent hotel/motel tax.

According to Cumberland County Finance Director Nathan Brock in the fiscal year 2016-17 the County collected $829,757.00.  The city's expected revenue from the tax would be just under $300,000 for the same time frame. 

The resolution was first approved in a special called meeting on Tuesday evening January 23.

Other items on the agenda are routine ordinance readings including establishing the Sports and Event Council, budget amendments and final reading of the ordinance discouraging smoking at Garrison Park. 

City Council Votes to seek 3% Hotel/Motel Tax to fund Tourism and Economic Development.

The Crossville City Council approved the first of 2 resolution votes required to request that the Tennessee General Assembly approve allowing the city to put a hotel/motel tax in effect.

In order to approve the resolution for the required second time and get the paperwork to Nashville, the council will hold another special called meeting on Thursday, January 25 at noon.

Currently, Cumberland County has a 7.5 percent hotel/motel tax that has been in effect for several years and under the Tennessee State law the city has been prohibited from adding a hotel/motel tax but recently some waivers have been added to the bill by the General Assembly allowing a way around the law.

City manager Greg Wood, left and 4 of 5 council members

discuss the addition of a citywide 3 percent hotel/motel

tax. Also pictured are council members J.H. Graham,

Danny Wyatt, Mayor James Mayberry, and Pamala Harris.

Council member Scot Shanks was not present.

Councilman Danny Wyatt proposed the action to add a 3 percent city hotel/motel tax with the revenue to be earmarked for economic development and tourism. The resolution would request a change in the city's charter to be able to assess and collect the tax and for a waiver from the current state law. Councilman J. H. Graham supported the motion.

With the 9.75 percent sales tax along with the county and proposed city hotel/motel tax, the total tax on a hotel stay would be 20.25 percent. Most areas in Tennessee have a total of 19.75 and the highest in the state from 2015 is 21.75.

Discussion lead to some changes in the motion but it was stressed that the city's action would not affect the county's current hotel/motel tax that would remain in place. Council member Pam Harris asked if anyone had discussed the matter with local hotel owners to see how they thought it might affect their business? Harris also wondered if such additional tax might hurt tourism.

Wyatt said he thought the funds should be under the control of the city manager to decide what to use the funds for such as Parks and Recreation, tourism or golfing.

Mayor James Mayberry said he couldn't vote for it unless the funds went through the budget process and the council decided the use of the money. With that added to the motion, all four council members present voted in favor of the motion.

Because of the deadline to get the information to Nashville and the schedule of council members another called meeting was set for Thursday, January 25 at noon.   

Council also approved authorizing the application for a 10,000 grant toward playground equipment at Garrison park and other items on the consent agenda.

Crossville Council calls special meeting Tuesday January 23 at 5:15 PM

Council Special Called Meeting January 23, 2018, at 5:15 PM

The Crossville City Council has a special called meeting set for Tuesday evening January 23 at 5:15 PM in Council Chambers at Crossville City Hall.  The agenda includes routine items, a grant possibility, and discussion of a citywide hotel/motel tax.

Crossville City Hall

Most of the items on the agenda are routine consent agenda items that the council has acted on before including second reading of an ordinance discouraging smoking at Garrison Park and the ordinance establishing a sports council.

Council will also consider authorizing the application for a $10,000 grant to US Bank for specialized playground equipment as part of the improvements to Garrison Park. The grant is used for musical play items for both developmentally challenged and general population youth. No match is required for this grant.

The main item causing the special call appears to be a discussion on a resolution to the Tennessee General Assembly requesting the state allow Crossville to impose a hotel/motel tax to be earmarked for economic development and tourism funding. The discussion is to be lead by Councilman Danny Wyatt. Currently, there is a county hotel/motel tax authorized here.