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Sullivan County panel endorses plan to borrow low-interest bonds

Published November 2nd, 2009 | 1 Comments

BLOUNTVILLE — Details on a potential $15.48 million low-interest bond issue — such as the exact interest rate and the payment schedule — continue to be “a moving target,” Sullivan County’s top finance officer said Monday.

Unchanged, however, are the deal’s positive aspects, Accounts and Budgets Director Larry Bailey said: The bonds, coming through the Tennessee State School Bond Authority “pool,” are a good buy compared to what the county would spend if it went it alone — and the bond issue is unique in the county will not have to share the proceeds with city school systems.

Bailey spoke to the Sullivan County Commission’s Administrative Committee, which endorsed the plan to enter into a contract for the bonded loan.

The full County Commission is scheduled to meet in called session at 9 a.m. Wednesday to discuss and vote on the issue.

The plan is to use the $15.48 million to overhaul Ketron Intermediate School.

It will cost the county an estimated $1 million per year to pay off the bonds, to be issued mid-November through a state program, county officials have said.

Bailey said that while a 15-year payback period has been most mentioned during the ongoing bond agreement process, the final contract with the state could call for 16 years of payments — payments made on a monthly, not yearly, basis.

Initially, county officials were told the bonds might be interest free. Bailey said the most recent figure he’s heard is an interest rate of 1.3 percent.

And earlier indications that the first payment will not be due until August 2011 might not be correct, Bailey said — the first payment could be due next year.

That could require alternative planning for how to make the payments. County officials favor repaying the bonds with money already in the county school system’s budget — through cost-saving measures, including potential closure of some schools.

The Sullivan County Board of Education went on record last week that it plans to close Kingsley, Cedar Grove and Akard elementary schools and will consider closing Brookside Elementary.

BOE Chairman Ron Smith said the vote — 6-0 with member Jerry Greene absent — was in response to questions and concerns from county commissioners about the funding source for repaying the low-interest Qualified School Construction Bonds.

The payments on the “sinking fund” bonds will go down each year as interest drawn on unspent money and from annual payments helps offsets future payments.

The closure of Cedar Grove and Kingsley and the potential closure of Brookside — all in Bloomingdale and the Sullivan North High School zone — would occur after the Ketron project is done.

The Akard closure could occur by the start of the 2010-11 school year in August 2010. Under tentative plans the BOE has discussed, Akard students would be moved westward to Blountville Elementary School.

Smith said the BOE would schedule at least one public comment session for the Akard community, just west of Bristol, Tenn.

Director of Schools Jack Barnes has said of about 154 students at Akard this year, 18 or so are in a special education program put there to help the building not be so underutilized. Those students might be placed in Blountville or sent elsewhere, but the others likely would come to Blountville, Barnes said.

Brookside could stay open to house K-2, while Ketron could be expanded from its current 5-7 to handle 3-7, or Ketron could become a pre-K-7 school. North serves 8-12.

Closing Cedar Grove and Kingsley would save about $740,000 a year, according to earlier school system estimates, while adding Akard to the closures would bring the projected savings to about $1 million. Closing Brookside could save an estimated $281,000.

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Akard should be left alone!!!! If closing Brookside is going to save 281,000, then close it and leave Akard open. That would give them there million dollars. Doing that the kids would be left where they are until Ketron is finished. Blountville does not have room for all the children from Akard. How do they think this is going to affect the special education students? The teachers at Akard know each and every child in the school and the children know and trust the staff also. They are not just a number there. How is sending them to an over crowded school going to help? This is only going to hurt their education. The children and their educations should be thought about first and foremost!!!

Ann PKMB | 11/3/2009 - 11:02 AM - ( Comment

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