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Commissioners approve Jonesborough K-8 school

Robert Houk and Jonathan Roberts • Updated Oct 29, 2019 at 4:18 PM

Washington County commissioners approved a first-of-its-kind lease-purchase agreement with the town of Jonesborough to build a new K-8 school and sports complex late Monday.

The vote was 10-4-1, with Commissioners Steve Light, Phill Carriger, Robbie Tester and Mike Ford voting “no,” and Commissioner Jim Wheeler abstaining.

The decision came after several hours of back and forth negotiations among commissioners and the county’s attorneys, as well as discussion with Jonesborough Mayor Chuck Vest. Commissioners voted 11-3 to adopt amendments to the lease approved by the Jonesborough Board of Mayor and Aldermen earlier Monday.

But as more amendments were introduced, commissioners asked more questions and voiced more reservations about the project.

Carriger even interjected a proposal from Johnson City Manager Pete Peterson, which he told his colleagues could save county taxpayers as much as $12 million on the Jonesborough school project.

He said Johnson City would be the “financial conduit” for the project obtaining a more favorable bond rate for the county to build the new school. He said those cost savings could be reinvested in capital projects for all county residents.

“We have an obligation to see if there is a better deal out there for all taxpayers,” Carriger said.

Commissioner Freddie Malone said he was more than “intrigued” by the city’s offer, but noted the commission should first act on the deal with Jonesborough.

“I’m inclined to finalize the deal we have with Jonesborough tonight,” he said. “We have a bird in hand.”

Washington County Mayor Joe Grandy said he had spent 71 days negotiating the best deal for the county with the town of Jonesborough. He said the school project was a “revolutionary approach,” but it was also one that calls for the “county to shoulder all the risks” for the project.

Before voting on the lease-purchase agreement, commissioners approved a resolution authorizing Grandy to negotiate “with the city of Johnson City and the local education agency operating within that municipality to identify the terms that would resolve dispute over the interpretation of the Jonesborough proposal.”

Malone said the measure represented a “good faith statement” to the citizens of Johnson City regarding the county’s commitment to helping with city school needs. Commissioner Jodi Jones said the county needed to go “one step further” and asked that language be included in the resolution to “communicate a stronger” commitment to “a coordinated agenda and sense of trust.”

Before the vote, Vest told commissioners the project represents a “new day for Washington County, the school board and for our town.” He said the school project also offered an opportunity to build a new sense of “trust” between the county and Johnson City.

The four-part agreement includes an inter-local agreement (which was approved by the county’s Board of Education in September), a lease for the school building, a lease for the sports complex and a purchase-option agreement.

The facilities lease was amended by both town leaders and the County Commission to a 10-year span, with the provision that once that term is met the county has the option of purchasing both properties at “a nominal fee of $1.”

In a special called meeting earlier in the day, Jonesborough’s aldermen voted unanimously to approve a lease agreement with Washington County that would see the county pay anywhere from $1.4-$2.2 million annually, dependent on the length of the lease agreement.

The agreement the town voted on was the same one presented to the County Commission at its special called meeting on Oct. 17. It also included 10 amendments, which Vest said were mainly items requested by the county.

The county and Jonesborough did make one significant change. At its Oct. 17 meeting, the commission was presented with an estimated $34 million building cost that included more than $1 million in interest fees — something that wasn’t included in previous estimates from the town.

Culver Schmid, the attorney representing Washington County, said the county had wanted the project to be capped at $32 million to include everything, including interest. He also said the the town’s approved amendments did not include the county’s request that the design costs for the project be capped at $1.5 million, and any amount above that would be Jonesborough’s responsibility.

Schmid said he the county needed to make the overall cost of the project “crystal clear” in the lease for budgeting purposes.

Vest told commissioners setting those costs too low could jeopardize the project down the road. After discussion, Vest said the town would be agreeable setting the overall budget at $32.75 million. Commissioners agreed to the compromise in one of the amendments they passed Monday.