Loudon County Mayor Doyle Arp said he was disappointed but not surprised so few people came out for the meeting. 

County officials have been wrestling with the decision of what school building projects should take center stage for years. The school board decided on Phase I of the building plan which current estimates call for a new school in Greenback at $26.2 million, a new Fort Loudoun Middle School at $13.4 million and renovations to the Philadelphia School cafeteria at $1.4 million. Phase I also includes combining the current Fort Loudoun Middle School and Loudon Elementary but at an earlier meeting the school board decided to put the combining of the schools on hold since it cannot be done until the new middle school is built. This puts the current estimate of costs for Phase I at approximately $41 million. 

Commissioners Austin Shaver and Don Miller have both presented preliminary plans for borrowing money. Both come up with similar numbers with the difference being Shaver's contention the money for school buildings should be borrowed for 30 years and Miller maintaining the county should stick with 20 year loans. Looking at the debt budgets only, Woody ran through the possible finance numbers depending on how much is borrowed, for how long and what interest rate is used. 

Woody said the county was in good shape financially and that, looking at the numbers, he could tell the county has budgeted for the looming building program by putting more pennies in the debt funds. The county's per-capita debt is about $632, compared to the national average of $1,200.

Woody began by inputting a $47 million loan at five percent interest for 25 years. That amount of debt would be inadvisable, Woody said because county finances "won't support $47 million" and the county would be "looking at a tax increase." 

A $47 million loan on those terms would cost the county $3.3 million per year and increase the debt per-capita to $1,643, Woody said adding if the loan was for more than 25 years the county would need a financial advisor. After running through several scenarios, he concluded that a loan of $25 to $30 million at the same tax rate could be done but any loan above $30 million would require more revenue. 

Woody said because some counties across the state have back loaded loans that are financially unsound in the long run, the state comptroller's office  has been cracking down on loan conditions and that he could not recommend any loan for more than a 25 year term. 

Miller spoke from the audience to remind everyone that the different scenarios presented by Woody are conditional on the county continuing to put the same amount of tax pennies in the two debt funds. He said commissioners also have to think about the entire county budget, which was so pared down this year that other departments will be in need of equipment and funds the commission nixed in this budget cycle. He also said when estimating a budget the school system's operating budget must be taken into account since it has gone up frequently in past years. Assuming the operating budget would remain the same for years was not realistic, Miller said. 

School board member Van Shaver pointed out there are currently three debts in fund 156 and there are plans in the works to pay off the two smaller debts leaving only $12 million to be paid. That difference completely changes what is available, Van Shaver said.

Commissioner Austin Shaver said the interest rate could change when the loan is pursued and noted that changing the interest rate to 4.5 percent or less would allow the county to borrow more money for a longer term and still keep property taxes at the same rate.

Woody also weighed in on another topic that has caused controversy between the school board and the commission - whether or not it is good policy to take a building project all the way to bid in order to get the best idea of costs.

"Don't give the architects money for estimates," Woody said. "Never go to bid unless you have the money to secure the contract." He cautioned that asking engineers to come up with a bid for a project that has yet to secure financing would cause them to "jack the price up." 

Given the many variables that must be taken into account, there is still no consensus about how much the county can borrow although estimates of between $20 and $30 million are common. The amount borrowed will determine which building project will be funded first. If the county can only borrow $20 million the $26.2 million school for Greenback would be out of reach. If the county can borrow $30 million, Greenback School could be completed along with the Philadelphia School cafeteria renovations. 

The county school building debate will continue Monday evening, Feb. 8 when the school board will host a meeting for commissioners and the public to see the plans for Phase I building projects and question the architects about the plans. The meeting will be in the Loudon High School auditorium and is scheduled to begin at 6:30 p.m.