County approves inter-local deal, City Commission up next

Washington County Commissioners recently approved an inter-local agreement crafted through a partnership between County Mayor Joe Grandy (left) and Pete Peterson (right), City Manager of Johnson City. The agreement is designed to provide the city with funding for school-related capital projects. PHOTOS BY DAVE ONGIE
By Dave Ongie, News Editor

On Aug. 24, the Washington County Commission voted 8-5-1 in favor of an inter-local agreement with Johnson City designed to fund school capital projects in the city.

The vote marked the end of nearly six months of uncertainty for the agreement, which began when the proposed deal was sent back to the county on March 12 by the Johnson City Commission for some minor changes to language in the document. The county’s vote also sets the stage for an important decision for the Johnson City Commissioners, who are expected to vote on the agreement in the near future.

The agreement – which was crafted largely through the partnership of Washington County Mayor Joe Grandy and Pete Peterson, the City Manager of Johnson City – requires the county to pay Johnson City $12.5 million over the next 25 years. This payment is in lieu of the estimated $30 million the city would have been entitled to according to state law had Washington County chosen to fund a new Jonesborough K-8 school through traditional methods instead of bringing in the Town of Jonesborough as a third-party borrower to finance the project.

Last Wednesday, Grandy said he was pleased with the passage of the agreement by Washington County Commissioners, which came after more than a year of work. Taking a holistic view of public education in Washington County, he said the construction of a new K-8 school in Jonesborough and the expansion of elementary schools in Johnson City made possible through funding outlined in the agreement constitutes a “win-win.”

“The school system in Washington County and Johnson City, it is all part of the county system,” Grandy said. “The City of Johnson City adds funding for the schools that are in their corporate limits. They’ve created a fantastic school system, and that’s all important, but it’s important that we as a county fund all of our schools in the Washington County School System.”

According to the finalized agreement, the $500,000 per year paid to the city over the next 12 years can be used to pay for the construction of additional classroom space at Woodland, South Side, Lake Ridge and Towne Acres elementary schools. Back in June, Peterson explained this extra space will become necessary as the city looks to move fifth-graders back to elementary schools when Indian Trail becomes the city’s second middle school, a move that could come as soon as the fall of 2022.

“We’re counting on that money coming in from Washington County in order to pay the debt service for the elementary school additions,” Peterson told the News & Neighbor at the time.

As Johnson City Commissioners prepared to vote on the inter-local agreement back in March, they did so amid calls for litigation from some Johnson City Schools officials. At that time, City attorney Sunny Sandos stated her opinion that the funding mechanism “is not illegal under current statutory language, as there are no state laws that force the county to borrow funds in any particular way.”

“At the end of the day, the city must weigh its chances of getting nothing versus some guaranteed funding,” Sandos said in a statement back in March. “We stand to lose far more than $12.5 million in the form of financial impact to our taxpayers if we litigate.”

The final version of the agreement that is now before the Johnson City Commission contains a “Covenant Not to Sue” that states the City, its departments, elected officials and agents have not initiated a lawsuit against Washington County pertaining to the Jonesborough School Project and will not do so in the future unless the county breaches the agreement by not making timely payments.

If the city does pass the agreement, Grandy said it will be a huge victory for regionalism, which has become a high priority among many local business leaders and elected officials in recent years.

“It would have been very difficult to not be able to cooperate within your own county when reaching out to other counties and asking them to cooperate with us,” Grandy said. “The City of Johnson City has been very cooperative with working through some of the details of this agreement.

“I feel like this is a possibility to move forward where everybody wins. Maybe everybody doesn’t get exactly what they want, but in the end, everyone wins.”


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