The Carter School Gamble

Tim Burchett believes he can pay for a new school by selling county properties. Can he?

During his first year in office, County Mayor Tim Burchett has shown a lot of prudence, most recently in balancing the county’s budget in tough times without resort to depleting its reserve fund, which his predecessor, Mike Ragsdale, had drawn down by close to $3 million in each of the two preceding years.

Burchett’s resolve to reduce the county’s debt, which had been burgeoning, by $20 million a year in each of the next four years provides all the more evidence of his frugality. Yet achieving this reduction has seemingly been at odds with his quest to satisfy the Carter community’s long-standing clamor for a new elementary school at an estimated cost of $13.8 million.

At a school board meeting last week, though, Burchett unveiled a plan for funding construction of the new school without borrowing a nickel. Instead, most of the money would be raised by selling county-owned property and applying the proceeds to pay “cash on the barrel head” for the school.

A green waste facility in Solway that’s already due to be auctioned off and the county’s Three Ridges Golf Course in East Knox have been the most publicized of the properties to be sold, but a list of candidates that Burchett furnished school board members includes a motley array of other county holdings on which Director of Purchasing Hugh Holt has preliminarily placed a total value of $19.3 million.

Before any of the properties could be sold, they would have to be appraised. Then, County Commission would have to approve each disposition and set terms and conditions. Auctions would then ensue at which bidders might stipulate their own conditions, such as zoning changes. So the sale process could well take many months and have uncertain outcomes.

If Burchett’s plan for committing to build the new school was contingent upon having raised enough money to pay for it, then he could be credited with both prudence and creativity. But in a way that seems totally uncharacteristic, he’s insistent that construction should start right away.

“If the school board approves it in August, then we’ll start turning ground in September,” Burchett says in an interview, while voicing confidence that “the properties are well worth” the school’s cost. As for timing, he explains that the firm selected to build the school, the Devon Group, won’t receive any payment until the facility is completed in 2013. “That’s the beauty of it, we’ve got two years to come up with the money,” the mayor says.

Under state law, it’s the school board’s prerogative to approve any new facilities. As a rule, the school system also pays for them by issuing bonds whose debt service is derived from the portion of county property and sales taxes that are dedicated to schools. But in this case, the county proper would assume all but $2.5 million of the cost—money that the school board had previously approved for a renovation of the existing Carter Elementary School rather than construction of a new one.

Whether a new school is really needed is anything but clear. School Superintendent Jim McIntyre has repeatedly insisted that the existing building is structurally sound and that a renovation is all that’s warranted. As long as the school budget doesn’t have to cover anything beyond what would have been the renovation cost, board members now seem disposed to follow the mayor’s lead in providing the Carter community with the new school it so avidly desires. But the board’s vice chair, Karen Carson, voiced a cautious note when she admonished Burchett to “show me the money” where the property sales are concerned. And well she should.

For all of the mayor’s confidence that he can raise enough to pay for the new school, a cursory review of the prime candidates on the property list that Holt prepared for him leave room for doubt. Consider:

• The county invested $4.5 million in the Three Ridges Golf Course, which adjoins the sheriff’s detention facility on Maloneyville Road in East Knox. But Three Ridges has been breaking even at best in recent years, and golf courses that don’t make money aren’t noted for being worth a lot.

• A $3 million sale price is assumed for the State Street site that the county acquired in the 1990s for an abortive Justice Center and is now a parking lot. But developer/architect Buzz Goss holds an option to buy that property that runs until 2015, and he’s not likely to be exercising it anytime soon unless market conditions improve.

• A Hillcrest Nursing Home on 20 acres in North Knox is assumed to be worth $8.5 million, but it’s the subject of a $1 a year lease that runs until 2016, as are county owned Hillcrest facilities in South and West Knox. And the last time these leases came up for extension in 2009, County Commission overwhelmingly approved them.

• The site of the Women’s Basketball Hall of Fame is deemed to be worth $3 million. Gloria Ray, who spearheaded the Hall of Fame’s creation and oversees its operation as president of the Knoxville Tourism and Sports Corp. says it’s her goal to acquire it with privately contributed funds. But she declines to say how much has been raised, and it’s almost inconceivable that the county would try to sell it out from under her.

The only “bird in hand” that Burchett has identified is $3.4 million to be realized from the refinancing of a mortgage that Knox County has been holding on the county’s 911 headquarters on Bernard Avenue. The Solway green waste facility that’s being auctioned has been appraised at slightly over $1 million, and another green waste facility at Forks of the River Industrial Park is on the for-sale list as well.

County Commission must also approve the Carter school funding plan, and before doing so it will do well to heed Carson’s admonition and know exactly where the money is coming from before committing to spend it.

© 2011 MetroPulse. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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