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County continues to weigh legality of school plan

Joe Grandy feels it's important to
Joe Grandy feels it’s important to “keep the process going” on the school project.


Staff Writer

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The Town of Jonesborough’s proposal to finance and build a new Jonesborough School is a lot like a football game and county officials are saying it’s down to the second half. Washington County Mayor Joe Grandy said at Wednesday’s meeting when the budget committee approved the plan that the game might go into overtime, but now’s also the time to “keep the process going.”

“We are working through the process because it is a process,” Grandy said at the budget meeting. “There’s no way you can put a final stamp on documents that aren’t complete. So what we want to do is keep the process moving forward. From my perspective, we need to move this forward with a spirit of support.”

Commissioner Freddie Malone made the motion that the county authorize the mayor to investigate and negotiate the terms of the interlocal agreement between Washington County, the county school board and the town. The motion also included putting $250,000 from capital funds toward the project design.

The town’s plan includes two leases between the county and the town for the proposed school building and the athletic facilities all on a 48-acre tract on North Cherokee Street in Jonesborough. The building payment for the county would be $2,362,000 a year, which the county’s finance director, Mitch Meredith, said is “a doable plan.” At the end of that lease, the school board would own the building. The athletic facilities, however would continue to be maintained and owned by the town.

The proposal also includes that the town of Jonesborough will get final authorization of the agreements and the building design. But in the meantime, the county plants to continue working on the agreement and the leases.

“One of the things we did learn from our initial legal review is that whether or not this concept meets the smell test in legalities is based primarily in the way the lease is structured,” Grandy said. “We don’t know exactly (how long it will take) until it’s been vetted.”

Grandy said the county has enlisted Baker Donelson, the firm that completed the county’s initial review of the plan and will continue to work on the proposal. Meanwhile, Jim Wheeler — who recused himself from voting as a county commissioner and instead represented the town as its attorney —  said the town has already put in a lot of legal work on the project.

“I think it’s important to state that the town has spent a considerable amount to have three legal teams working on this. We’ve discussed it with two different bond counsels to make sure we cleaned this up,” Wheeler said. “Same thing with the structure of the lease. I just wanted to point that out. I don’t want it to appear to anyone — I know there are parents here — that there hasn’t been any work on that lease. There’s been a lot of work done on the legal aspect, it’s just been on the side of the town at this point. Now we’re ready to move into getting our fourth opinion.”

The question of legality has been a lingering topic of discussion following the announcement of the school building proposal. Because the county, by state law, is required to share funds from bonds for education capital projects with the city, the project, which would be financed by the town, would not include shelling out shared funds to the city school system.

Due to those funding concerns, Wilkinson said Baker Donelson was brought in as an outside firm to vet the legality of the plan.

“The mayor actually immediately charged the legal department with vetting the big picture of it from the county’s perspective and to reach out to lawyers who carried a case on a specific issue of sharing which Jonesborough’s counsel has already vetted,” Wilkinson said. “It was so important to the citizens and the taxpayers of Washington County that those interests were reviewed independently. I think that’s good news to the people of Washington County that Baker Donelson believes, based on their independent research, that the county is able to enter a lease-purchase agreement to build the school in the way it’s been structured.”

Meanwhile, Commissioner Freddie Malone and Larry England, who are both Johnson City residents, addressed the legal concerns as multiple Johnson City officials watched on at the budget meeting.

“I am not an enemy of the city,” Malone said. “When most of my neighbors hear this is the only way to make this (school building project) work, they basically say, ‘Get those kids a new school and don’t raise my taxes.’ There’s been a lot of talk about legality and certainly we have to make sure that what is done is legal, but I really think it’s more of a financial thing. This is the only option.”

The full commission will vote on the plan at its regularly scheduled meeting on Monday, Sept. 23, at 6 p.m. at the George Jaynes Justice Center, 108 W Jackson Blvd., Jonesborough.