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Stipulations stall ‘Coalition for Better Schools”

 

 

“This should speak volumes that Johnson City and Washington County are working hand-and-hand to work out this mutually beneficial amendment to legislation. We are the two entities literally taking the lead for the benefits of the cities and counties across the state.”

DAN ELDRIDGE

MAYOR OF WASHINGTON COUNTY

By COLLIN BROOKS

Staff Writer

[email protected]

An amendment to the Tennessee Code that would have provided the Washington County Commission with a more cost friendly way to build two area schools has hit a snag, as the Coalition for Better Schools Act has been put on ice over the summer.

“Unfortunately the efforts to jointly develop legislative amendments addressing the needs and concerns for both cities and counties regarding school capital project funding, has for this session of the General Assembly, ended without a consensus on proposed language,” Mayor Dan Eldridge said in an email to commissioners on Monday, March 14.

The main goal of the amendments to TCA 9-21-129 and 49-3-1003 is to provide the Washington County Commission and other county commissions in the state  with the option to pay an annual principal debt service amount to cities, instead of borrowing that same lump sum.

The bodies agreed to continue working on the language in hopes that something will be prepared to go in front of the General Assembly when it resumes next year and Eldridge said that he has confidence that the language will be ready by then.

“I believe the cities are very interested in accomplishing what we each are trying to accomplish here,” Eldridge said. “The challenge is going to be doing it in a way that preserves the value for the counties.”

The stumbling blocks ended up being provisions that the cities insisted to be included.

The first was that the cities wanted any bond offering that contemplated annual payments in lieu of upfront sharing of the proceeds would require approval by the Director of State and Local Finance.

This is not a currently a requirement for counties issuing debt, and Eldridge and others fear that it would add another layer of state oversight that may only complicate and delay the process of counties issuing debt.

Another is that the cities wanted the commissioner of revenue to be allowed to withhold state-shared taxes from the county and remit them to the city in the event of a county’s non-payment. Those stipulations drained some of the value of entering such an agreement, according to Eldridge.

“These conditions that the cities have placed on it really eliminate any upside for the counties in doing this different kind of payment,” Eldridge said.

Washington County has taken the lead role for the counties, while Johnson City has taken the lead role for the cities in drafting the language to be proposed to the legislation, which is a plus according to Eldridge.

“This should speak volumes that Johnson City and Washington County are working hand-and-hand to work out this mutually beneficial amendment to legislation,” Eldridge said. “We are the two entities literally taking the lead for the benefits of the cities and counties across the state.”

Washington County could be one of the counties to benefit the most from the amendments as they are looking to build two new schools. With a bonding debt service that currently sits at $150 million. Adding the Boones Creek school, which is proposed to have a site selected in the next 90 days, will swell that amount by $60 million.

That heavy bonding debt service wouldn’t allow the county to discuss the addition of another school, however an agreement to the amendments to the TCA would. Although, Washington County Commission Chairman Greg Matherly doesn’t think that the county should wait on this legislation to pass before they decide on their future.

“There is nothing to say that it will pass next year, I just don’t think we can put all our eggs in that basket,” Washington County Commission Chairman Greg Matherly said. “It could pass one day in 10 years. We just need to look at what we have right now.”

The relationship that Johnson City and Washington County have could be vital in the future when it comes to this agreement if discussion fold somewhere down the road. A similar deal could be worked out between the two bodies, which would be an Interlocal agreement. That could provide the same benefits of the larger agreement to Washington County and Johnson City and it wouldn’t need the legislative approval.

That would be the option that Eldridge would be in favor of, if this does become an issue.

“If that does become an issue, that would be the direction I would try to focus us,” Eldridge said. “Rather than letting this become a stumbling block that jeopardizes the whole plan.”