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The original item was published from 6/14/2022 9:07:00 AM to 6/14/2022 9:20:49 AM.

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Economic Development News

Posted on: June 14, 2022

[ARCHIVED] Mayor’s State of the City and Budget Address

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Mayor’s State of the City and Budget Address

June 13, 2022

To the Board of Aldermen and citizens of Tullahoma, I submit that the city of Tullahoma is in excellent condition and a wonderful place to live, work, and raise a family.  This is my opportunity to discuss the economic condition of our city and address some of the achievements that have shaped our community during the past year.

Tullahoma’s diverse economy, our strong entrepreneurial sector and quality of life ensure that we will continue to attract both private and public investments.  In fact, in 2021, the Heartland Forward Foundation ranked the Tullahoma-Manchester micropolitan area seventh overall nationally.  POLICOM Corporation, an independent economic research firm which specializes in analyzing local and state economies, ranked our local area as Number 56 out of 543 Micropolitan areas in the U.S. In Tennessee, only Sevierville ranked higher.

During FY2021 the city issued 112 new business licenses.   Tullahoma’s Planning Commission was busy during 2021 addressing 16 rezoning applications, 4 zoning ordinance/subdivision regulations amendments, and a total of 41 subdivision applications creating 316 new lots on 220 acres.  Approximately 60 new homes were constructed.

As an indication of the city’s steady progress, during FY2022 (July 1, 2021 through June 30, 2022) the city has issued 124 business licenses. The Planning Commission during FY2022 has had 8 rezoning applications, 4 zoning ord./subdivision regulations amendments, and 38 subdivision applications creating 261 new lots on 211 acres. (not including June numbers – not available yet).   As in FY 21, approximately 60 new homes were constructed.

            It is exciting to see new sidewalks being constructed and still more in the pending budget.  It is also exciting to see the city catching up on much needed street repaving. To actually see the repaving of Cedar Lane being started within 2 weeks after final funding approval was most welcomed. Other large capital projects include partnering with Tullahoma Utilities Authority to replace and upgrade downtown traffic signals and we will continue to make ADA transition plan improvements across our city. In addition to regular roadway paving and repairs, the city anticipates completing the repairs to Waggoner Street.  The new addition at Fire Station No. 2 is almost finished and renovations will soon begin at the Baltz Historical Building.  After re-roofing C.D. Stamps and replacing the HVAC units, the gym walls have been repaired and the flooring will now be replaced this year.   A new guardrail will be installed along Short Spring Road and a new section of sidewalks should be completed soon along E. Grundy Street.  Construction of sidewalks near Ovoca Road and Kings Lane are the next sidewalk project to be completed. The new restaurants and music venues are making our downtown area an exciting place to frequent.  Several new murals around town add a distinctive touch to our city and reflect the artistic talent in our community. The new Farmer’s Market at South Jackson is also a welcomed addition to our city.

The Tullahoma Regional Airport continues to have a significant economic impact on our community.  Fuel sales for 2021 were 221,019 gallons compared to an all-time high of 255,545 gallons in 2019.  Due to an increasing price for fuel, fuel sales are projected to be down to 190,000 gallons in 2022. Last year the Tennessee Department of Transportation completed a year-long statewide Aviation Impact Study reporting that Tullahoma Airport had a $21 million economic impact on our area.  I am very happy to see the economic impact the airport contributes to Tullahoma, and I look forward to the airport attracting more aviation related businesses at the 100-acre Airport Business Park. Last year saw the addition of a major new facility at the airport, Williamson Aviation.  Owner, Michael Williamson, has invested $1 million in the restoration of a WWII hanger where he does precision machining for the military, aircraft refurbishment, and flight training.

            In recognition of Tullahoma’s history of supporting our nation’s military since the days of Camp Forrest to today’s Arnold Air Force Base, our city has received the prestigious recognition as A Great American Defense Community.  Our city is committed to improving the lives of airmen and families, veterans, guard, and reserve members, as well as AEDC employees. Tullahoma will continue to build on our heritage as an aerospace center of excellence.  In addition to focusing on aviation and aerospace initiatives, TAEDC will also pursue retail, medical, information technology, entrepreneurial, and tourist development. 

            Tullahoma continues to be a vital retail hub for our area. The city has had a partnership with Retail Strategies since 2013. During that partnership 425 jobs have been created.  There has been a $73M increment in annual retail sales and a $1.4M annual increase in sales tax. The new Highway 55 restaurant on N. Jackson Street has finally opened and the fashion anchor, Marshalls, at Northgate is expected to open in the late summer. 

Goals for the City this year include the adoption of a five-year capital plan that will incorporate the results of the recently completed “Think Tullahoma 2040” comprehensive plan, with available ARPA funding and planned debt issuances as a strategic roadmap.  The creation of Tullahoma’s Comprehensive Development Plan was the highlight of FY2022. Labeled “Think Tullahoma 2040”, this plan is truly the Tullahoma citizens plan as over 1100 survey responses by citizens were received and considered.  The plan has been thoroughly scrutinized by a Steering Committee, presented to the public for comments and is now ready for presentation to the Planning Commission for their consideration and acceptance before submitting to the Board of Mayor and Aldermen for adoption. Using the comprehensive plan as a guidebook of citizen and community needs, our city leaders and staff can make informed decisions affecting transportation, housing, jobs, schools, parks, and the overall use of lands and investment in public infrastructure from now through the year 2040.  

Through the development of the Think Tullahoma 2040 Plan, which was arguably the most critical project in FY 2022, we have been able to foresee the growth that is just on the horizon for Tullahoma.  As we prepare for the new homes and businesses that will be moving into Tullahoma over the next 5-10 years, I am eager to begin work on the top priority projects identified by the 2040 Plan. Over the next 12-24 months, I am most looking forward to those projects that address infrastructure needs and long-awaited capital projects through use of the American Rescue Plan Act funding. Our community will be busy with new developments, including a new four-story hotel expected to soon begin construction and several other new retailers and restaurants are coming to the area.   Funding has been approved to implement the community’s vision for a more attractive and cohesive look along North Jackson Street.  Investments in this commercial area of Tullahoma, are investments in those industry areas that were hardest hit over the past two years.  Also, we know that we will get tremendous return on investment by upgrading the look of the most visible and highest traffic corridor in our city.  I’ve heard from many citizens who are most excited for new sections of sidewalks, improvements to our downtown, and projects that will improve Waggoner Park, Johnson Lane Sports Complex, and the grounds around the South Jackson Civic Center.   We have also set aside approximately $1.2 million for stormwater projects. These investments in the city’s drainage system will be less visible, but no less important for the future of Tullahoma. Over the last three years, this Board has doubled the budget for annual paving compared with the years prior.  Keeping with this new trend, this year’s budget includes $450,000 for annual street paving and repairs.  

Expenditure challenges addressed in building the FY2023 budget include addressing the 8.5% annual increase in the consumer price index, which includes an 18.3% increase in the price of gas. In addition to the rapidly rising cost of gas, departments have faced increases in building and operating supplies as well as shortages and long delivery delays.  Funding priorities include continuing to provide competitive wages and benefits to retain and recruit employees as well as allowing sufficient operating funds to compensate for rising costs.  For this reason, the FY2023 budget includes a 5% cost of living adjustment for employees, a 20% increase is proposed for gas and fuel purchases, and an annual base paving budget of $450,000.  

Our two largest general fund revenue sources that provide 80% of operating income are property taxes and local sales tax.  In view of Tullahoma’s strong economic trend, sales tax is forecast to grow at 6% which should generate an additional $400,000 in funding for Tullahoma City Schools as well, since sales tax is shared between the two entities. As a result of the Coffee and Franklin County reappraisal process the State of Tennessee provides Tullahoma with a new certified tax rate.  The new rate will be significantly lower, a 47-cent reduction, to ensure that new higher tax base that results from the state-mandated reappraisal process generates a revenue neutral outcome for the City. Again, as presented, this budget includes the new certified, lower tax rate and does not propose a property tax rate increase. This budget represents the 9th year of no proposed property tax rate increase.  The proposed budget forecasts a 2% actual growth in the tax base due to new housing starts and commercial renovations, independent of the reappraisal process. Based upon the city’s projected revenue and expenditures the overall percent change in total expenditures is up only 2% from last year’s budget, despite the large cost of living increases and inflation in the economy. 

In light of addressing these larger economic factors, this annual budget as proposed is focused around achieving three priorities: first, responding to the significant rise in the cost of living; second, addressing the rising costs to provide excellent services; and third, supporting job creation, new business development, land development and a vibrant economy. Funds allocated by the federal government through the American Rescue Plan Act will also be utilized to further growth and recovery objectives. 

In conclusion, I am pleased to be able to report that our city government enjoys an Aa2 Bond rating, one of the highest in the state.   Once again, our city government earned the GFOA Certificate of Achievement for Excellence in Financial Management, as well as the Distinguished Budget Presentation Award, demonstrating excellence in transparency and reporting.  These are independent and objective measures of how your tax monies are managed and measured for financial soundness.  I appreciate City Administrator Jennifer Moody and Finance Director Sue Wilson for their professional guidance in coordinating and compiling this budget and thank all the city department heads as well for their excellent stewardship of the resources allocated to them. 


Submitted by:

Ray Knowis, Mayor

City of Tullahoma


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