After previously taking out $33 million in loans to pay for
school construction, Loudon County Commission on Monday approved the remaining $10 million that
would complete funding to build a new Greenback School and Fort Loudoun Middle School and renovate
the Philadelphia Elementary School cafeteria.
Mayor Estelle Herron recommended the board
approve issuing a 10-year loan, allowing the county could pay off the debt quickly while maintaining
a tenable level of reserves in the county's school debt service coffer.
"Our fund balance
would continue to stay above (board), and there would be enough money there each year to make
our payments for the next year," Herron said.
The county would pay off the
recently approved loan in 2023 and will be making payments on the other $33 million in debt until
2036. Prior outstanding debt not related to the $43 million project is expected to be paid off in 12
Commissioner Don Miller made a motion to approve the 10-year loan, and Commissioner
Bob Franke seconded.
Commissioner Sharon Yarbrough questioned the proposal. "What does
this include?" Yarbrough said. "I'd like a school person (to answer). What are we paying
Miller said he didn't think it was appropriate for an official with the school system
to answer that question.
"We're paying for the additional $10 million for phase one, and
that's it," Miller said referencing the three construction projects. "However, an important thing is
if we go with option two, there is enough fund balance as time goes on that we can proceed with
phase two whenever the ..."
"My question was, 'What are we paying on phase one?'" Yarbrough
Miller responded. "Ten million. That's the answer."
Herron said the
county took out the previous $10 million on a bank qualified loan for 25 years. The other $25
million was also issued for a 25-year term. She said the county took out the debt in segments as the
overall project progressed.
"I didn't see any point in paying interest on the whole $43
million in, say, November, December 2011, because you would not have been using all of that money,"
she said. "So, why put it in the bank?"
Commission Chairman Roy Bledsoe, who temporarily
passed gavel duties to Vice Chairman Earlena Maples so he could comment, said he was pleased the
county was looking at paying off the debt more quickly.
"My point has been lately to try to
reduce that so we don't have interest for so many years to keep building on, so I am glad that we
have at least stopped in 10 years," Bledsoe said. "And the next one, I'm hoping we can keep it at a
lower year and not have our debt running for 25 years — several million dollars (in) interest that
the county doesn't need to pay."
Miller said the county would save a little more than $2
million in 25 years by going with Bledsoe's idea.
The vote then passed. As the lone
dissenting vote, Yarbrough expressed her opposition to the process.
"I think it's an
inappropriate manner of funding, and I think we're costing our taxpayers still an additional
extensive amount of money on this issue," she said. "My vote is no, for the funding, not the
The board also approved adding Herron and Sheriff Tim Guider to the County
Corrections Partnership Committee as voting members. They were previously on the panel in an ex
Tellico Village resident Pandora Vreeland said that she, along with Wayne
Schnell of Lenoir City and Tom Murphy, another Village resident, wanted to be considered for
membership on the jail committee.
"We wanted to be part of this committee because we thought
we could bring unique creative solutions and experience to the committee," Vreeland said, noting
that the group previously made the suggestion in the summer of 2012.
Thomas is a former
executive with Accuprobe, Inc., in Salem, Mass., while Schnell is a former U.S. Air Force lieutenant
colonel. Vreeland previously worked as a senior official in the leasing industry. "If that
committee can be opened up after it has been prior closed to new voting membership - i.e. the
sheriff and our mayor - we want to come in again and try and help bring our county to a good
resolution on the problem," she said.
During the public comment period, Schnell also brought
a proposal before the commission to consider adopting a home rule form of county government that he
said would create more community input in county business. According to material he presented to
commissioners, a panel called the Loudon County Home Rule Committee began collecting petition
signatures on Feb. 19 with the goal of reaching 2,500 supporters. The petition would then be sent to
Loudon County Election Commission for certification prior to the establishment of a charter
Schnell said the charter board, which would consist of 21 residents representing
county districts, would then have nine months to write a new charter for voter
"What I'm trying to do is foster open government," Schnell said.
write into the charter if you have a tax increase it'd have to go as a referendum for the voters, so
that means you have to get out there and explain why you have to have this tax increase, and you
have to convince a majority of the voters that those taxes ought to be increased," Schnell
Miller said after consulting with the county attorney and other lawyers, he took issue
with that contention. "State law says that only county commissions and the state legislator can vote
on property tax increases or property tax rates, so you would actually have to change state law," he
said. "Charter government will not do that for you."