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The progress train is coming: Town approves $3.2 million loan to continue projects

The motion to approve a Rural Development loan for more than $3.2 million at the Jan. 11 Jonesborough Board of Mayor and Aldermen received a unanimous “yes” from the board, but it wasn’t a yes that came quickly or easily.
“I’m just concerned a little bit,” Alderman Chuck Vest said of the Community Facilities Loan that would not only help restore the downtown Jackson Theatre, but also provide additional parking for the McKinney Center, completion of the Chuckey Depot project, restore needed monies back into the town’s fund balance and more. “These are all valuable things that we need to do, but do we really need to try to do them all right now?”
Though this was not the first time the issue was before the board – or the first time it was met with a “yes” – the Jan. 7 vote to approve the resolution authorizing the issuance of the bond was the final steps before the debt would be accrued.
“The resolution that the board approved will be sent back to Nashville,” Browning said. “Then they will have to wait for closing instructions from Rural Development.”
Right now, he said, it looks like the town may have the money by the first week of February.
While Browning acknowledged the importance of achieving an important balance between responsible debt and practical cash flow, he believes the low interest rate of the package and the way it fell into not only the town’s plans for the future but also its ability to pay made this a good choice for the town.
In the end, the aldermen agreed, but not without voicing a few concerns. Here are the details of the decision.
Components of the loan
According to Browning, the $3,294,000 Community Facilities Loan will be used o pay off a $600,000 capital outlay note issued for the McKinney Center and downtown streetscape work and a $285,000 capital outlay note on the purchase of the Jackson Theatre. The loan will also be used to renovate the Jackson Theatre, providing the match needed for a $450,000 grant that has already been approved; finish rebuilding the Chuckey Depot into a railroad museum; match an Enhancement Walkway Grant from Barkley Creek Park downtown; complete walkway improvements on East Main Street; and construct additional parking at the McKinney Center.
About $400,000 of the loan would go back into the town general fund balance as reimbursement for project expenses already incurred.
Those seem to be a lot of projects coming in at one time, Aldermen David Sell noted. But Jonesborough’s Mayor Kelly Wolfe pointed out that some of those projects had been in the works since 2008 and earlier.
“What you are seeing is an opportunity — with interest rates low and us being able to check off all the boxes for USDA approval — to bundle several things together at once,” Wolfe said.
The mayor also believes loan approval represents a solid business decision for the town.
“The gist of this whole pursuit has been the continued economic development of the town of Jonesborough,” Wolfe said. “To try to put your finger on the one thing that causes a city to thrive is a very difficult thing to do and very seldom is there one single thing.
“This theater, by itself, would not cause Jonesborough to immediately go to the next level of economic growth. But combined with the downtown revitalization, combined with the downtown farmers market, combined with a historic district that was the first in the state, combined with the McKinney Center, combined with folks who choose to live in a community where people care for one another – that’s a synergy where you see development – a development that requires . . . us as a board to place value on projects like this as a means to further the progress we’ve made.”
Ability to pay
Challenges from the board focused on three issues: the ability to meet bond payments in the future; the wisdom of having to pay back the fund balance for monies used before the loan was received; and value for the town of each project on the list.
Browning is confident that future payments for the monies borrowed should not be a problem.
Payment on the principal is not required until the completion of all the funded projects, he pointed out, giving the town an estimated one to two years before that occurs. The repayment of the capital outlay notes for the McKinney Center and the Jackson Theatre building will free up funds to meet about 2/3 of the future monthly payment. That leaves, according to Town Recorder Abbey Miller, about $5,000 per month still to meet.
Several other capital outlay notes will also be repayed in 2016, Browning said, including one that will free up about 18,000 a year and another freeing up about $42,000 a year in payments already being made.
In addition, Wolfe said, sales tax revenue, always budgeted conservatively, has been coming in at about $60,000-$70,000 more than projected.
Even more capital outlay notes will be coming off in 2020, he added.
The result, Browning said, is “There is no reason for us not to have the funds in place for us to make that payment.”
Browning also said that while he did not see having to borrow – and then reimburse – the general fund balance as an ideal, the town only moved ahead with those projects once it became clear that they had been approved for the grants and loans.
Without that approval, “those projects would have been dead in the water,” he said. And any plans for them would have come to a standstill until further funding could be found.
For Sell, the burning question was how these projects could benefit the town not two or five years from now, but further into the future.
“Do you envision these projects down the road being self-supporting?” Sell asked, expressing a concern that the board not burden taxpayers in the future with projects that looked great on paper and on ribbon-cutting day, but had to be continually fed financially to keep going.
Wolfe’s reply? “In my mind, I think we can,” he said.
The Jackson Theatre itself, the main focus of the loan, is seen as the catalyst that can help bring visitors downtown at night — something town officials see as a long-voiced need to increase tourism and revenue.
Monies to be used for some upgrades at the nearby Jonesborough Repertory Theatre are seen as part of that draw.
The Chuckey Depot is viewed as another tourism and revenue building vehicle for the town.
And town officials pointed out that the McKinney Center has already seen a potential loss of revenue when event coordinators are unable to find the parking they need at the center.
“Jonesborough has grown (in the past) not because of major industry; Jonesborough has grown because of quality of life,” Wolfe said. It has proven itself to be a place where people want to visit and where they want to belong – and he believes that will continue to translate into revenue.
Economic benefit to the town
In the end, the board’s approval appeared to echo their belief in the town’s current direction, as well as the confidence in their ability to put a stop to anything that looked above and beyond that need.
“Anything we want beyond the scope of what you have already approved, we have to bring back to you,” Browning said.
The town administrator also assured the board that town staff had long-ago learned to carefully guard the town’s funds and were determined to use only what was needed.
“Our staff doesn’t go out to spend money just to spend money.,” Browning said. “We are very conservative in the way we spend.”
Though it was clear that board members were committed to watching the upcoming project carefully — “We as a board, we’re going to just have an eagle eye to ensure those money are set aside, earmarked, so when the time comes, we are ahead of the game,” Alderman Adam Dickson said — it was also clear that the potential of a downtown theatre to increase revenue while contributing to residents’ quality of life was an opportunity the aldermen weren’t ready to deny.
“I am a big proponent of the Jackson Theatre,” Vest said. “ I think it’s one of the single biggest things we can do downtown to create the synergy to increase the growth of revenue.”
For Wolfe, who as mayor had no vote in the decision, Jonesborough was clearly on the right track, and this decision would help it continue.
“The gist of this whole pursuit has been the continued economic development of the town of Jonesborough,” Wolfe said. “This project I think represent an extremely important piece of the economic puzzle in Jonesborough.”