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Proposed bonding strategy could be a game-changer

An idea has sparked serious talks between Johnson City and Washington County that could provide the county government with the monies it needs to meet the educational requirements for their schools.
Two weeks ago, Washington County Mayor Dan Eldridge met with the mayors from Sullivan, McMinn and Roane Counties, along with the city managers from Oak Ridge, Maryville, Alcoa and Johnson City Manager M. Denis “Pete” Petersen during a trip to Nashville.
The group met in order to discuss options to help county school systems — which also have city school systems within their boundaries — overcome bonding issues that limit their abilities to provide their schools with the needed capital.
“We are working with Johnson City on a strategy that would basically eliminate the bonding constraints that Washington County is dealing with,” Eldridge said. “We are tens of millions of dollars short of being able to meet the needs of the Washington County school system, giving the sharing requirement we have with Johnson City. What if, instead of borrowing double the money, we could pay Johnson City the equivalent debt service on an annual basis?”
In other words, borrowing $30 million for a new school calls for the county currently to borrow double to ensure that Johnson City gets its appropriate share. Instead of giving Johnson City $30 million up front, the new language would allow the county to pay Johnson City $1.95 million a year for the next 20 years, which would be the equivalent debt service payment.
“It gives them flexibility and it would not in any way prevent them from going out and borrowing $30 million and using this $1.95 million to service the debt,” Eldridge said.
The proposed language would need to amend Chapters 9 and 49 of the Tennessee Code to allow the county government to pay an equivalent debt service payment during the term of the bond, in lieu of borrowing a larger payment, according to Eldridge.
The county mayors and the city managers did agree on language that would allow such a thing, according to Eldridge, and that language is currently being drafted by Johnson City. Eldridge said that he hopes that the language can be agreed upon by the end of the week and that they will be able to put those words in front of the legislation.
However, with such a short time frame, there are some concerns that it may not make it to state legislators before the end of their session in April.
“Even something like this, where we’re all pretty well nodding our heads and saying that conceptually we want to move forward with this, which is where we are, that still doesn’t guarantee that the general assembly will act on it,” Eldridge said.
Washington County currently holds a $150 million bonding debt service and that number will increase by $60 million when the decision is made to build a new Boones Creek K-8 school for $30 million.
Currently the ratio of student population is 53 percent enrolled in Washington County schools, while 47 percent of the population of students is enrolled in Johnson City schools.
Eldridge brought up this topic during a Health, Education and Welfare Committee meeting on Thursday afternoon, when the committee was discussing the possibilities of moving forward on a new traffic flow pattern for the Jonesborough schools.
Current renovations, which total more than over $9 million, are set for the Jonesborough schools for 2017-2018 and 2018-2019 fiscal years, but safety concerns caused Commissioner Joe Grandy to ask the board to bring the traffic pattern forward. The Jonesborough Middle School is almost 65 years old, while the elementary school is 45 years old. That had prompted the discussion as to whether build a new school or make renovations to the current school.
The traffic plans could possibly set off a domino effect because a new entrance is recommended as a new bus drop off spot at the front of the school to enhance security. Those renovations would cost $838,000. The new traffic pattern itself, with a bus drop off in the front of the school and a long traffic pattern that would stretch around the football field, would cost almost half of that.
However, with the proposed bonding solution, it wouldn’t be out of the question for the county to take on the possibility of constructing two new schools instead of one.  
“It would make it more financially feasible, simply because we would not be bumping up against our bonding capacity limits,” Eldridge said.
Architect Tony Street told the committee that if they didn’t have the traffic project bidded out by March, than they would have to push off the project until next summer.
Even with those time constraints, no motion was made to bring the project to this fiscal year.