By Collin Brooks
Washington County Mayor Dan Eldridge announced that the county would be going about the issuance of bonds for the new county school projects in a different manner than normal.
He told the Budget Committee during their meeting on Wednesday, April 12, that the county would use bond anticipation notes to construct a new Boones Creek K-8 and to fund an addition and renovation of Jonesborough Elementary and a renovation of Jonesborough Middle School.
“Instead of borrowing all the money up front, recognizing that this project is going to be stretched out over four years, you pay a tremendous amount of interest on that principal that is borrowed up front,” Eldridge said. “We have prepared a plan that essentially will work like a construction loan, we will issue bond anticipation notes periodically, throughout the project, and they will be an amount sufficient to fund the cost of the project as we go.”
The whole goal, he said, is to manage the cash flow for the entire project and pay the minimal amount of interest.
That could have repercussions for the city, as it looks at capital projects for schools, because it will only be able to get a share of what the county takes out. However, Eldridge said, the city will still be able to get the entirety of the close to $30 million over those four years.
“They’ll still get the same amount of money, the only thing that it will do is that they will get it incrementally, because bond anticipation notes are shared, instead of a lump sum up front,” Eldridge said.
The relationship between the county and city school systems will be another topic of discussion for the mayor when he gives a presentation to the county commission during its April 24 meeting to address some of the things that the city school board has put in public.
“We are shooting for the county commission meeting this month,” he said about the presentation. “There have been several claims made by the Johnson City Board of Education and I want to set the record straight in regard to those.
“And I also want to remind the county commission of what they’ve done and why. What they’ve done, quite frankly, is they’ve shaved $50 million off the cost of these schools. They have shaved $140 million of the total indebtedness of the county, as a result of these schools.”
He noted that the tax increase would have been a minimum of 23 percent more if the county commission hadn’t adopted the capital projects fund. But he also said that the school board has had to make some cuts to their original wants list.
“The school board is getting their schools but they aren’t getting everything that they’ve asked for,” he said. “They had to make some sacrifices.”
He also said the county has made sacrifices as well, like pushing back county capital maintenance projects.
One of those needs was addressed during the meeting, as the county school system was able to spend $62,381 to repair the roof at Lamar Elementary. They are doing that in order to push off spending $360,299 for three to four years. That is when the cash flow from the property tax increase will be a bit more inflated with funds.