The Blount County Commission meeting was embroiled in a numbers game during its February meeting, with discussion on refinancing the county debt and additional discussion on storm water regulations.
The money issue was whether or not the county should refinance its debt. Backers of a motion to do so said it would save the county $1 million each year.
Linda King of Laws Chapel Road asked what the cost is to Blount County taxpayers to refinance the debt. She also wanted to know who receives the fee to refinance. King also took aim at proposed measures that would require property owners to get permits to do work on their property if they are going to disturb more than 1/10th of an acre.
“Should people be penalized for trying to make their homes and lives better? Your kids ask you to vote against this,” King said.”
Tona Monroe Ball of Greenback asked when the county was going to pay off the debt rather than refinance it. She also was in opposition to the storm water regulations.
“If Blount County passes this, clearly it’s not constitutional,” she said. “Just don’t show up on my property. I’m not going to apply for it or ask for permission to use my land.”
On the storm water issue, Justin Teague, storm water coordinator, explained that the proposed measure is a change to the grading resolution, a post construction runoff regulation. Maryville and Alcoa already have the same regulations requiring a permit for any work done on more than 1/10th of an acre of property. “Knoxville is strong too,” he said of their regulations. “You need permits for excavating, grating and cutting.”
Commissioner Scott Helton made a motion to table the measure until the March commission meeting to see if the requirements by state law would apply only in the county’s urban growth boundary around incorporated areas or if it would apply throughout the county.
Commissioners Farmer, Proffitt, Peggy Lambert and Kenneth Melton voted against putting off the vote. The remainder of commissioners voted to table the measure and the motion passed. Samples was absent.
The commission discussed applying for a grant to help cover the cost of installing sewer in a section of Blount County near Grade Road. Terry Bobrowski, director with the East Tennessee Development District, answered questions. He estimated cost of the project will be $880,000 and the federal grant is for $500,000.
Finance director David Bennett said if the commissioners chose to apply for the grant, they would have another opportunity to vote on it if they win the grant in September. “When it comes back you’ll have opportunity to appropriate funds. If you don’t appropriate the funds, you lose the grant,”Bennett said.
Bennett said if the county gets the grant, they will put the job out for bid. “Our maximum based on that estimate would be $380,000,” he said. “There are ways to match with work and work-in-kind to where it’s into a direct outlay of cash and it still benefits the residents. There are ways we can be innovative and not just pour cash at the problem.”
Commissioner Ron French made the motion to apply for the grant and said it affected residents in his district. “By approving this resolution we’re not saying we’re going to spend this money. We’re saying we’d like this group to apply for this grant. It may not go through, it’s up to the grant givers,” he said. “They decide whether we get the grant. We’re not obligated to anybody by approving the resolution. It’s worthwhile.”
Commissioner Bob Proffitt supported the measure. “Bottom line is I think it’s a worthwhile project, and I think it’s something we need to jump on and let folks see if we can get a little help,” he said.
The commission passed the measure. Commissioner Brad Harrison voted no, commission chair Steve Samples was absent and all the other commissioners voted yes.
Regarding refinancing the $49 million in debt, Bennett answered questions from commissioners. Commissioner Wendy Pitts Reeves asked when the debt originated and what it was used for.
She was told that the $39 million was originated in 2000 for 28 years and $10 million borrowed in 2002.
Bennett said the bonds went to pay for the new library, courthouse renovations and schools such as Carpenters Elementary, Carpenters Middle School and Mary Blount Elementary and finishing the Justice Center.
Bennett said that by refinancing the debt, the savings could be considerable. “We’ve estimated annual savings of $1 million a year,” he said.
Joe Ayers with Cumberland Securities, said much of this need for refinancing came about when JP Morgan decided not to extend a liquidity facility which allowed stock traders to leave a bond with JP Morgan until it is sold. Without a liquidity facility, the bonds aren’t eligible to be put on the money market, he said.
“The good news for Blount County is your credit has never been better. What you need to do is refinance your bonds,” he said.
Commissioner Mike Walker asked if the $1 million in savings was annually or over the life of the loans. “It’s based on market conditions and projected market conditions,” Ayers said. “Based what we’re paying currently, payments would be $1 million less next year.”
Commissioner David Graham asked about the bonds and Ayers explained that the county had paid about 3 percent interest on the loans. Graham questioned Ayers about the variable rates the county pays on is bonds.
“You should be conservative when you’re handling taxpayers money,” Graham said. “I don’t know anyone who has a variable rate mortgage. I know we’re trying to get the best deal. I sometimes wonder if we shouldn’t be more conservative even if it costs us a little more.”
Ayers said voting yes regarding the motions helps the county. “This plan lowers risk, lowers cost and gives the county the opportunity to see what happens on global market,” he said.
Commissioners voted to authorize issuing $3 million in general obligation refunding bonds to make payments on the $39 million bond during refinancing.
Voting no were Pitts Reeves, Walker, Graham and Joe McCulley while the remainder of the commissioners voted yes. Samples was absent.
Then commissioners voted to authorize one or more loans, not to exceed $50 million to refinance all the county’s outstanding debt.
Voting no was Graham, McCulley and Pitts Reeves. The remainder of commissioners voted yes. Samples was absent.