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City leaders resist creative solutions for Boones Creek

Proposed solutions to ensure county students receive the same educational opportunity as their counterparts without overburdening the taxpayers did not receive much support from Johnson City leaders during the third in a series of meetings to discuss the problem.
Mayor Dan Eldridge began the Dec. 3 meeting of the Health Education and Welfare Committee by repeating comments he said were not heard by many sitting at the table last month.
“I have never said the system of funding education is unique in Washington County,” he noted. “I said Washington County is uniquely impacted by the funding model because the formula doesn’t compensate for the funding advantage Johnson City has as a result of 86 percent of all sales tax generated being collected in Johnson City and only 7 percent in unincorporated Washington County.”
According to Eldridge, revenue allocated by the state for schools is determined by a county level fiscal capacity that includes the $50 million generated in sales tax, but doesn’t consider how little of that amount is collected in rural Washington County.
However, as representatives of all 125,000 county residents, Eldridge emphasized again that he and the county commission are not seeking to improve the educational opportunity for county students at the expense of students in Johnson City.
In an effort to reach a win-win solution that will enhance the quality of life for all Washington Countians, Eldridge said creative alternatives that reduce costs must be identified and seriously considered.
These solutions also must take into account Washington County’s limitations for additional debt. A long-range facilities plan presented by the Board of Education has a projected cost of $110 million. The share to Johnson City increases the debt obligation to $214 million.
Unfortunately, the county’s current bonding capacity is only $135 million. Even if the full capacity were used, the county would still be $80 million short on school obligations, in addition to delaying other county capital needs for up to 20 years.
With all of the considerations in mind, Eldridge said he was placing the following ideas on the table:
1. Negotiate an agreement to construct the new K-8 facility in Boones Creek to accommodate city and county students, and be owned and operated by Johnson City schools.
2. A property tax increase on county residents living outside Johnson City limits.
The savings from both of the ideas above comes from the sharing amount being removed from the total cost of the project.
3. Revisit the facilities master plan and consider opportunities to deploy technology in order to reduce the dependence on brick and mortar school facilities.
4. Reduce the K-8 facility budget to a more affordable $20-25 million per facility.
Before any of these ideas is pursued, Eldridge said a plan to sustain the operating budget of the county school system must be developed.
“I don’t think we need to deploy a facilities plan that will require a tax increase without dealing with the schools’ operating budget, which may need its own tax increase,” he said. “Those two things need to be on a parallel track.”
Eldridge said none of the ideas offered has ever been fully explored, though he recently asked the county trustee and property assessor to begin the calculations for a rural tax increase.
“The question I don’t have the answer to is if one entity builds it and another entity operates it, can you say it’s a city school or would it be a joint school?” City Manager Pete Peterson asked, noting tuition requirements for non-city residents.
Eldridge said if the county funds a school owned and operated by the city, that amount of money would not have to be borrowed because there would be no sharing requirement.
“What if the city built it for the county?” Peterson asked. “The elephant in the room is you don’t have the borrowing capacity to do the (facilities) plan, not considering the city’s share.”
Commissioner Todd Hensley agreed the county was going to hit a wall at some point.
“We’re there,” Eldridge said.
Hensley said the second elephant in the room is the suggestion of a consolidated school system, which would solve the sharing requirement.
Peterson pointed out the county would still need $110 million for the schools master plan, but Hensley said larger municipalities have combined their systems without problem.
“The question today is not what it would cost to consolidate, but what is it going to cost us not to consolidate?” Eldridge noted.
According to Peterson, studies indicate sales tax is not going to be sustainable as a funding source for government operations. “And there are not a lot of other sources,” he added.
Eldridge agreed. “Like it or not, Johnson City and Washington County are joined at the hip. We’re in this together, and the quicker we realize that local solutions are the best options, the quicker we can move forward.”
Director of Schools Ron Dykes said the fund balances of both school systems are shrinking. “The master plan can be broken down into phases; they are not all emergency needs,” he said. “The commission has never answered the question of whether you want to refurbish or build.”
Dykes said he missed the conversation about the city’s operating the school, saying he and Superintendent Richard Bales had already decided that wouldn’t work.
A jointly operated school is not feasible, Eldridge agreed. “The question is whether a school built by the county and operated by Johnson City that is attended by students from both systems is feasible,” he said.
“To build a K-8 will cost us because we don’t operate K-8 (schools); we operate K-4 and 5-8,” Peterson said. “Maybe K-8 isn’t the answer, maybe it’s a K-6.”
Another option Peterson mentioned was an inter-local agreement that might allow Washington County to defer payment on the share that goes to Johnson City.
Van Brocklin said an earlier conversation with the city attorney indicated such an arrangement was not legally possible. According to Eldridge, other considerations such as the interest rate of the loan and the inability of one board of commissioners to make a binding commitment for future board members don’t make that option feasible.
Van Brocklin said one concern of the Johnson City School Board is the additional $1,000 per-pupil expenditure going to city students. “Is there a willingness of the county to put in the additional difference?” he asked, noting it would be a stumbling block to an agreement.
Eldridge said making up the difference would cost the county less than what it would pay in interest to borrow another $40 million. Van Brocklin agreed to continue the discussion, but said there are a lot of impediments.
“Don’t you think to save the taxpayers $40 million, we need to follow it to the bitter end?’ Eldridge asked. “A partnership with the city would enable us to place the school where it needs to be for maximum economic impact rather than having it in a location where developers wouldn’t invest a dime.” The facilities master plan proposes replacing the Boones Creek schools with a new K-8 facility in the Oak Grove area of the county.
According to Eldridge, there are two ways to deal with revenue problems – add more revenue or reduce costs.
“I think the second one would be easier,” Commissioner Tom Krieger said.
The discussion closed with agreements for Van Brocklin to discuss the proposed partnership with city commissioners, and Dykes to talk with the Board of Education about reducing the school cost to $25 million.