However, the repayments will start about a year later than originally anticipated, and instead of having to spend 10 percent within six months the school system must only commit to spending 10 percent in six months.
Barnes said the $15.2 million in bonds to renovate and expand Ketron Intermediate School in Bloomingdale are still a fantastic financial deal for the county and the school system, probably the best deal in a generation.
Elsewhere in the region, Hawkins County got about $2.5 million in Build America Bonds for roofs, windows and technology, while Johnson City got about $8 million for a new freshman academy.
The sinking bonds — so named because payments go down each year — will allow Sullivan County to draw interest on the money before it is spent and then have interest on the payments it makes reduce future years’ interest.
So even with an interest rate of no more than 2 percent, the effective interest rate could reach 0 percent or maybe less. Officials initially had described the bonds as no- or low-interest bonds, and Barnes said the financial markets still might accommodate a lower rate.
The bonds — to be sold in November and available to the county then — also save the county money because, unlike other bonds, proceeds don’t have to be shared with the Kingsport and Bristol, Tenn., school systems.
Another bit of good news Barnes told the Sullivan County Board of Education Thursday night — drawn from a recent trip to Nashville to meet with state education officials — was that the roughly $1 million-a-year repayment over 15 years will start in August 2011, not around September 2010 as originally envisioned.
That will give the county another year to come up with the money. Barnes urged school board members individually to contact county commissioners to discuss funding, since the County Commission must agree to repay the bonds.
After the meeting, asked about some commissioners saying the repayments should come from closing schools and other efficiency changes in the school system, Barnes said both sides — the BOE and County Commission — likely would have to compromise.
During the meeting, the BOE voted 7-0 to enter into contract negotiations with Beeson, Lusk & Street Inc. for the Ketron project. That architectural and design firm already has done the preliminary work on the project, part of a package submitted for the competitive bond. Such professional contracts don’t have to be bid out like construction does.
Once completed, the plan is to close Cedar Grove and Kingsley elementary schools and put all those students in a combination of Brookside Elementary, Ketron and North High School, with Brookside possibly closing later if enrollment numbers drop.
Ketron currently serves grades 8-12, Ketron 5-7 and the three elementary schools pre-K-4. One scenario is that Brookside would become pre-K-2, Ketron would become 3-7 and North remain 8-12.