Although officials have acknowledged it isn’t an ideal agreement, Johnson City will now have an extra $12.5 million to help cover the cost of pressing school construction projects.
“This is really not a vote that I feel good about,” said Commissioner Larry Calhoun.
“My inclination all along would be to challenge the approach of the funding, but unfortunately all the information and advice that we’re getting at least brings me to the conclusion that the only people who would be hurt in an extended court battle would be children of the county and children of the city.”
City commissioners unanimously approved an interlocal agreement with Washington County on Thursday, which will provide $500,000 annually to the city over a 25-year period.
Money can be dedicated to planning, design and construction of additional classroom space at Woodland, South Side and Lake Ridge elementary schools. Funding can also be earmarked for the construction of a new Towne Acres Elementary School.
Johnson City Mayor Jenny Brock said this money would likely offset roughly half of the debt service costs for a new Towne Acres school.
“Our challenge would be that we just have to find the remainder of funding for that school,” she said. “If we don’t take it, if we go to court (and) we lose then we’d wind up with nothing. Then we’d be looking for the entire amount for a new Towne Acres school.”
City officials deferred action on the deal in March after noting that important attachments were missing from their version of the agreement. The Washington County Commission reapproved the deal during a meeting in August.
City staff have spent time consulting experts and reviewing the city’s legal options. They eventually determined that Johnson City didn’t have strong legal footing if it attempted to sue the county over the mechanism it’s using to fund a new school in Jonesborough.
The town of Jonesborough is borrowing money for a $32.75 million K-8 school and sports complex, which the county will have the option to eventually own through a lease-purchase agreement. Critics have noted that this doesn’t guarantee the Johnson City school system money it would normally share based on average daily membership if Washington County issued bonds for the $33 million project.
City Manager Pete Peterson estimated that the city would have realized about $28 million through the conventional process.
But, between classroom additions at elementary schools and an expansion at Indian Trail Intermediate School, Peterson noted that Johnson City does have plenty of school capital needs.
“This will certainly help us offset some of that cost,” he said.
Johnson City commissioners also formally approved the issuance of $29 million in new debt, which will include a total of $12.8 million for the classroom additions at Woodland, South Side and Lake Ridge elementary schools.
Peterson said the city plans to use the funding it receives in the interlocal agreement with Washington County to help pay down the debt associated with these school construction projects.
In conjunction with that debt issuance, the city is refinancing about $6.5 million in outstanding debt, which officials believe will give the city the opportunity to save about $446,000.
Among other expenses, the bond issuance will help pay for $5 million in stormwater improvements associated with the West Walnut Street redevelopment project and $3 million for new financial software.
Johnson City commissioners approved a memorandum of understanding with the Tennessee Golf Foundation for the organization to build an instructional center at Pine Oaks Golf Course.
The Tennessee Golf Foundation would pay for the cost of construction and full-time staff member to work at the facility, which will have two teaching studios that will include golf simulators.
“It really is a great differentiator for the course,” Brock said. “It takes us up so many notches I can’t even count them all.”