Kingsport schools awarded $1.2 million

Rick Wagner • Nov 2, 2009 at 12:00 AM

KINGSPORT — The Model City’s school system is about to get a piece of the Qualified School Construction Bonds pie after all.

David Frye, director of finance for Kingsport City Schools, got word last week from Tennessee officials that money was available to fund more than $1.2 million of the system’s requested $4.9 million QSCB application that wasn’t awarded in late September.

The Board of Education and Board of Mayor and Aldermen, in work sessions Monday evening, indicated consensus support for the QSCB application. Since the BOE already approved a larger package of QSCB requests, all that remains to claim the money is a BMA vote at Tuesday’s meeting starting at 7 p.m. in the large courtroom of City Hall.

The money — part of a pool of $117 million in economic stimulus funds for all but the largest school systems in the state — became available when some school systems that applied for the bonds didn’t follow through and accept the funds, which are repaid at a bargain interest rate expected to be about 0.5 percent.

The sinking bond fund, to be repaid over 16 years, will have payments that go lower over time because interest on the proceeds and interest on the payments made will be used to reduce future payments.

In comparison, Build America Bonds are projected to have an interest rate of not more than 3.3 percent.

Of the $1.2 million, $250,000 will be used to reconfigure career technical education classrooms at Dobyns-Bennett High School, $315,470 will fund the renovation of Legion Center into classrooms, $585,034 will be used to convert the old Central Office space to classrooms, $61,000 will pay for a new emergency generator at D-B, and $26,653 will cover issue costs.

The funds are to become available on a reimbursement basis after an expected issuance Dec. 1, Frye said. The first monthly payment is to be due around April 2010, Frye said.

The career technical education and Legion Center funding was shifted from more than $41 million in 20-year Build America Bonds the city recently approved, allowing the school system to get more project money for little additional bond repayment.

The QSCB money will put Kingsport in the company of Sullivan County, which got $15.4 million to renovate and expand Ketron Middle School in Bloomingdale.

In addition, Johnson City is to receive about $8 million to build a freshman academy for its system, while Hawkins County is to receive about $2.5 million for roofs at Surgoinsville and Rogersville middle schools and technology upgrades. Hamblen, Hancock and Union counties also got QSCB funds.

City Manager John Campbell said next year’s QSCB applications may be much more competitive since systems will have more time to get applications together.

Still unresolved is where a newly unified Kingsport Central Office of about 25,000 square feet will be, but Superintendent Richard Kitzmiller said D-B needs the space, and the Central Office needs to be unified into one building instead of three. The Central Office is currently housed near the D-B cafeteria, Midland Center and an old church next to Indian Highland Park.

Building a new structure on purchased land was projected to cost $3 million plus engineering costs, but school officials have discussed using land donated by the city if it acquires the old Kingsport Foundry site.

In a presentation to the BMA at City Hall — made after a called BOE work session across the hall — Kitzmiller emphasized that approval means the BOE and BMA should “believe that the existing Central Office space should be converted for Dobyns-Bennett student use.” The school of 1,900 students is at just more than 100 percent capacity.

“We have 19 teachers who teach on a cart,” Kitzmiller said of teachers who go from room to room using carts.

He also said that both groups should be “confident we can execute a plan for relocation of existing Central Office functions to a new, remodeled or leased space in time for the renovation project to be completed in three years” as required by QSCB regulations.

Vice Mayor Ben Mallicote and Mayor Dennis Phillips emphasized a BMA-imposed moratorium on issuing any more bonds until 2011-12, but Kitzmiller said some existing and expected money could go toward the project.

Mallicote said if leasing meant a permanent increase in maintenance of effort for the school system, that would not be feasible. But Kitzmiller said long-term leases could be handled like capital instead of operating expenses.

About $1.5 million in bond proceeds from Hawkins County capital projects will be available for the Central Office project, and Kitzmiller said the Midland property could be sold to get more money with the possibility of a city schools share of a future Sullivan County bond issue.

The city is located in both counties and shares proportionately in regular bond proceeds, although QSCB proceeds for Hawkins and Sullivan are not shared with Kingsport like most bonds.

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