The Great Smoky Mountain Journal
Source:
Tuesday, January 01, 2019 02:44 PM
Sevierville Looking To Manage Million Dollar Loan Payment That Threatens City Services Including Law Enforcement
According to city officials, the economic crash of 2008 left the city struggling, along with several large projects that were planned but not begun. For example, the city planned what was supposed to be one of the largest shopping destinations in the area at Dumplin Creek; however, all that sits on the site now is a pile of dirt.
The City of Sevierville took out a $146 million loan, which paid for infrastructure upgrades, a new Convention Center and upgrades to the golf course. This created what is called Tourism Development Zone, which would allow Sevierville to keep more tax money collected from any future development in the zone. However, that money hasn't come back to Sevierville to pay the debt.
"Our goal right now, and the number we're trying to hit is 5.4 million dollars, through those combination of things," City Administrator Russell Treadway said.
The city has a payment of $14 million total. That $5.4 million is the difference the city has to make up in the next two years.
"The city has been aware of the upcoming payments that we have when we hit principal. The response to that has been we need to encourage more development in the zone," Treadway said.
However, if no one builds in that zone, Treadway said the money will have to come from whatever the city already has coming in, which could lead to those higher taxes or cuts across the board in every city department.
"Any cuts that we make, regardless of the department, will have an impact. Obviously police and fire some of the most visible things we do, but we provide garbage and parks and recreation," Treadway said.
Officials said the city was denied a request for higher gross receipts tax, and the state said they don't qualify for a premier resort status. That leaves two options for paying back the loan: cut the budget or raise taxes.
The $5.4 million figure is what funding the entire city fire department would be -- so that's big money. A budget meeting has been set for next week to see if officials can find a solution soon. That meeting will take place at 3 p.m. on Monday, April 2.