An Unequal Disbursement of Stimulus Funding in Tennessee?

The federal stimulus package came at a bad time for Unicoi County, Tenn.

The county had recently begun construction on a new school when the billions of dollars became available – but only for virgin projects.

Elsewhere, Unicoi had just finished installing energy-efficient lighting and a new heating and cooling system in the courthouse – the kind of project that would have been eligible for federal funding.

Unicoi officials haven’t applied for any grants, and the county has received only $885,000 for education and a small award for nutrition. The paucity of stimulus funding gives Unicoi the fewest stimulus dollars per resident – approximately $50 – of Tennessee’s 95 counties, according to a Bristol Herald Courier analysis.

“We’ve been watching all the grants come down,” Unicoi Mayor Greg Lynch said in an interview earlier this month. “We’re either finishing up projects, or we don’t have anything shovel-ready to qualify.”

Actually, there are “a couple of bridge projects” that could be eligible for stimulus grants, Lynch said. But the county is $30 million in debt, and has little fiscal appetite for even a zero-interest loan.

“We’re at the wrong place at the wrong time,” Lynch said. “Washington County is in the right place at the right time.”

It certainly looks that way in the state data on stimulus grants.

As of last week, the state reported that Washington County had received more than $49 million – more than 50 times as much as Unicoi, with whom it shares a border.

But the reality is more nuanced. Washington County hasn’t received a dime of the $49 million, Mayor Gregory Jaynes said.

“Ain’t none of it coming in here to us,” he said.

With the exception of education funds, he is correct. The state data that tracks stimulus money by geography does not go deeper than the county level, masking who is actually receiving funds. The state has posted more detailed information on its Web site, but the grants are not searchable by locality.

Of the millions that appear under Washington County, the lion’s share – $36.8 million – is earmarked for higher education. East Tennessee State University has received at least $29 million of that amount, according to university officials.

The rest likely has been claimed by Johnson City, a municipality that has pursued stimulus opportunities all the way to Washington, D.C.

The stimulus team

“We went up there with our wish list of funding opportunities. They have been very helpful.” – Todd Smith, business management analyst for Johnson City, on his visit to Capitol Hill

Shortly after Congress passed the stimulus legislation, Johnson City assembled a team of a dozen city department heads to meet monthly and brainstorm ways the city could procure the newly available money.

Tapped to lead the effort was Todd Smith, an official with economic development responsibilities who goes by the bland title of “business management analyst.”

Within a month of the stimulus package’s passage, Smith went to Washington for a program sponsored by the International City Management Association to educate local officials on how to apply for stimulus money.

Smith and Pete Peterson, Johnson City’s city manager, followed up the two-day conference in March with a day on Capitol Hill, meeting with staff representatives of both of Tennessee’s senators, Lamar Alexander and Bob Corker, and U.S. Rep. Phil Roe, who was the city’s mayor just a year ago.

“We went up there with our wish list of funding opportunities,” Smith said in an interview. “They have been very helpful.”

Smith’s job, as he describes it, is to “establish relationships with the federal and state agencies who oversee the grant monies, so that when monies are released, we’re making sure we’re aware of any funding opportunity out there.”

The proactive approach has paid dividends.

As of August, Smith said, Johnson City has scored the following awards:

* $1.4 million for a public transportation grant, mostly for new buses;
* $835,00 for a road-resurfacing project;
* $400,000 for a bicycle/pedestrian trail on State of Franklin Road;
* $1.1 million for affordable housing renovations;
* $661,000 for upgrading the heating, ventilating and air-conditioning system of Freedom Hall;
* $153,000 to fund special prosecutions of major drug crimes;
* And a $434,000 grant, combined with a $434,000 low-interest loan, for the water infrastructure in the Gregtown area of the city.

In stark contrast, officials in Unicoi County and the town of Erwin have barely identified a grant that would match one of their projects.

“So far, we’ve not seen anything that would apply to us where we could apply for it,” said Erwin Mayor William Don Lewis.

Except for one: a bridge over the railroad tracks onto Main Street in downtown Erwin. With more trains coming through the town, Lewis said, traffic increasingly has been backed up.

The state has promised $8 million to help build the bridge, but Lewis said the engineer’s estimate ran to double that amount. Asked why he had not applied for a stimulus grant, Lewis said, “We talked about it, but you had to be ready to break ground right then, and we aren’t. The state’s got to buy the right-of-way.”

Lynch, Unicoi’s mayor, also groused about not having shovel-ready projects. There are a few road-widening projects that are in the works, he said, adding hopefully, “Maybe there’s Round 2.”

Spending the stimulus

“We don’t know when we’ll get some. I assume it will be soon. We’re limping along here.” – Sarah Davis, executive director, Johnson City Area Arts Council

East Tennessee State University has so far banked nearly $30 million in stimulus funds – the fourth highest total in the state for higher education, and nearly $10 million more than Virginia has allocated to any university. ETSU’s haul is approximately equal to the stimulus funds Sullivan and Carter counties have received from the state combined.

But ETSU officials know that the money is a one-shot deal, and are planning for the long run.

“We’re looking at a 24 percent budget reduction in 2011,” said David Collins, the university’s vice president for finance and administration.

“We have to use funds in a way to ensure that we can move to that reduced operating level,” he said.

To that end, ETSU has used the money for voluntary buyouts and to stave off layoffs. The university also has taken the novel approach of setting aside $500,000 for a “grant competition,” reserved for funding “cost-reduction or revenue-generating” projects recommended by members of the university community, Collins said.

“We’re not sure what we’re going to get back, but there are a lot of good ideas, a lot of smart people on campus,” he said.

Then there are the capital projects: installing new heating and air systems, replacing leaky, single-paned windows, building a downtown medical clinic and new lab space for ETSU’s College of Pharmacy.

Also in Washington County, the Johnson City Area Arts Council secured a $28,000 grant from the Tennessee Arts Commission – an infusion that likely saved the organization from axing some of its programs.

Executive Director Sarah Davis began receiving word in May that the council’s state and local funding were in jeopardy, moving her to apply for a stimulus grant. Johnson City has not reduced its funding for the council, Davis added.

The award will pay the salary of the council’s only other full-time staff member for a year, but doesn’t solve the problem of funding into 2010, which Davis predicts may be even more bleak. And she’s still waiting for the money.

“We don’t know when we’ll get some. I assume it will be soon. We’re limping along here,” she said.

Elsewhere in the region, localities are benefiting from stimulus infusions that are somewhat more modest than in Johnson City.

The city of Bristol will add another police officer to its roster of 67, thanks to a three-year, $171,000 grant. After that period, the city will pay the officer’s salary and benefits for another year, a condition of the grant, said Stephanie Hoskins, community programs coordinator for city police.

Bristol also has received $67,000 for sidewalk construction in the Anderson Street neighborhood, and a $237,000 neighborhood stabilization grant to demolish condemned or abandoned structures, according to Shari Brown, community development director.

A dissenter weighs in

“Is it worth the investment? Well, time will tell.” – U.S. Rep. Phil Roe

Phil Roe arrived in Congress as the country was teetering on the brink of financial chaos, fresh from his experience as mayor of Johnson City. The stimulus package was one of the first major pieces of legislation he voted on. He voted against it.

“If half of that was infrastructure, if we’d invested $350 billion in roads and water and sewer and schools, I would have looked hard at that,” he said in a recent interview. “I don’t have a problem with future generations paying back something they get to benefit on.”

But the rollout of stimulus dollars has been too slow, said the 1st District Republican. As to whether it is stimulating the economies of the localities he represents, he said, “I don’t think that it is.”

Almost immediately, he qualified the statement.

Any dollars spent, he explained, have some stimulating effect. “Is it worth the investment? Well, time will tell.”

The key to recovery is to create jobs, Roe said, and to do that, the federal government has to assuage the fears of business owners about pending legislative reforms – such as health care and energy – if they want to spur such investment.

Roe believes that the business community is holding back, worried that pending legislation and a ballooning federal budget deficit will add to their burden.

“How much do they have to spend on health care? How much do they have to spend on energy? Right now, they don’t know, so what are they doing? They’re not investing,” Roe said.

But that doesn’t mean local officials should take a pass on securing stimulus dollars for their communities.

“We’re all going to pay it back,” Roe said. “You should aggressively go after” the grants. Johnson City, he noted, has taken this approach.

Unicoi County’s stimulus experience was news to him.

“Knowing what money to apply for is important,” he said. “I’ll definitely talk to them about that. Especially in a county like Unicoi County. We’re not wealthy counties.”

Three weeks later, Roe announced that the Limestone Cove Fire Department had received a $111,000 grant through the Department of Homeland Security.

The grant will fund the construction of a new fire station, with sleeping quarters, a kitchen and a bay area, said the fire department’s secretary, Beth Gouge.

The department, she said, has been housed in an old school building deemed unsafe for children in 1964.

“We’ve been having a lot of problems with the roof leaking, and the electrical can’t pass inspection,” she said.

A builder in Kingsport, Tenn., had the low bid. The department’s volunteer staff will put in the plumbing and electrical systems, Gouge said, but they will not be paid.

dgilbert@bristolnews.com | (276) 645-2558