County leaders continue looking for ways to fund school building program

   County Commissioners Austin Shaver, left, and Bob Franke discuss school
building funding Monday during the commission workshop.

Mary E. Hinds News Herald

County Commissioner Austin Shaver presented a tentative plan to fund the first phase of the county school building program without raising taxes but some commissioners questioned his ideas. 

Phase I of the building program includes four projects: a new K-12 school in Greenback; combining Loudon Elementary and Fort Loudoun Middle School into one facility, modifications and expansion of the cafeteria at Philadelphia Elementary and a new middle school in Loudon.

Shaver introduced the idea of giving the county school board a set figure and telling them to tailor their building plans accordingly. He said it would be better to just to tell the board, "this is how much we can build without new taxes." Shaver said it was the same tactic the county commission used this year when determining how much of the school system's proposed budget the county would finance then letting the board trim their budget to fit that number. Shaver distributed a fact sheet outlining several options for borrowing money to get the program up and running. 


His plan is to pay for the program from the Education Debt Service Fund - Fund 156 - without impacting the county's reserves or rasing property taxes. His calculations included borrowing amounts from $41 million for 30 years at 3 percent interest to $32.4 million for 30 years at 5 percent interest. 

The handout included the rational behind borrowing on a 20-year loan verses a 30-year loan. Shaver said the 30-year loan did not include pre-payment penalties which would allow the county to pay the loan off early when the economy is good or allow the county to pay less during the lean years. Shaver said giving the school board a bottom line number amounts to "doing our job" and "tells the school board 'here's what you have.'" 

Commissioner Don Miller said he had also come up with a similar plan to fund the building program but he would prefer waiting for the school board to get actual bids on the building projects so there will be a better idea of actual costs.  As to 30 verses 20-year loans, Miller said that could be decided in the future. "We don't need to decide on this until they get the bids," he said. 

Shaver said the advantage of giving the school board hard numbers is it would "force the school board to conduct themselves like real people" meaning "they can't spend what they don't have." 

Whatever finance plan is decided on, Commissioner Bob Franke said it is "critical to keep this ball rolling." Franke represents Greenback on the commission and Phase I of the building program includes a new kindergarten through grade 12 school in Greenback to replace the worn out building currently in use. 

Commissioner David Meers asked Assistant Director of Loudon County Schools Jason Vance, who was in the audience, what would be done with the old Greenback School if a new one is built. Vance said that was "yet to be determined." 

Miller said the disposition of the old Greenback School would be up to the school board, but they would be well advised not to come back to the county for more money to tear down the old school or for anything else.  After funding a building program, "the county is really going to be stretched," Miller said. He added the commission might have to "bite the bullet" in the next two years and raise property taxes to fund the building program. 

School board member Van Shaver was in the audience and spoke up saying he felt it would be a waste of money to pay for building proposals and get bids on projects that might never come to fruition due to finances. 

He said the board currently has thousands of dollars worth of plans for defunct projects and estimated it would cost approximately $1.5 million to get all four projects to bid. 

Miller said he would prefer the school board come to the commission for funds to get the projects to bid and then the commission would have a better idea of how much money would have to be raised. "You've got to come to us to request it," Miller told Van Shaver. 

Commissioner Earlena Maples said the upcoming election might see new people on the school board who might have different ideas about the building program and how to finance it. "The election could change everything," she said. 

Commission Chairman Roy Bledsoe expressed concern the school board would sign a contact with a construction manager, who are traditionally paid a percentage of the over all contract costs to oversee construction projects. 

Vance said the board was consulting with attorney Chuck Cagle about the contract with Merit Construction and how much the firm would be paid to manage the projects.  Vance said Merit had offered to lower their fees to manage the projects.