At last week’s County Commission meeting on Mayor Tim Burchett’s proposed budget, there was some evident confusion among commissioners about exactly how much the county is required to pay next year on its bonds. Commissioner Amy Broyles proposed removing about $2.7 million from money she assumed was extra debt payment and using it to give raises to Knox County employees. But Finance Director John Troyer told her there was almost no “extra” debt payment included in the budget: All $71 million in bond payments are part of the normal 2012 debt schedule. (There’s another $700,000 that is technically discretionary, since it arises from bonds being let this year, but the projects it’s tied to would have to be canceled to free up that money.)
Broyles seemed unconvinced, and we think we know why: During Burchett’s public presentations on his budget proposal, he made a point of emphasizing (one could even say bragging) that it would “reduce the county debt by $20 million this year, and set a course for annual debt reductions of approximately $20 million or more annually over the next five years.” What Burchett didn’t say is that that is how the county’s debt load was already set up: Debt for non-school county projects peaked at about $405 million this year and will fall by regular increments to about $337 million in 2016. (Provided the county doesn’t issue new bonds in the interim.) So Burchett was essentially taking credit for promising to pay the county’s bills, which may have led some to believe he was going over and above what was legally obligated.
Anyway, because we’re the kind of journalists who aren’t afraid of calculators, we asked Troyer for a copy of the 2012 debt schedule, and spent a while going through all five pages of it. Our conclusion: Troyer’s math is right. The county owes $35,615,702 in principal payments next year, and $32,759,119 in interest. That plus $2,704,206 in commissions and fees for financial services gets you to $71,079,027. There isn’t any extra payment being made.