Why Johnson City may sue Washington County over new Jonesborough school funding plan

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WASHINGTON COUNTY, Tenn. (WJHL)- A funding plan for a new PreK-8 school and sports complex in Jonesborough has some Johnson City leaders considering a lawsuit against Washington County.

On Monday, the Washington County Commission voted to pursue further study of a proposal in which the Town of Jonesborough would take out a bond to build the school. The Washington County School Board would later lease to own it.

MORE: Washington County Commission approves moving forward with amended Jonesborough school project

Before the vote, Johnson City Board of Education Chairman Tim Belisle told News Channel 11, “If the county does choose to move forward with this funding mechanism, I would begin to lead the effort to have Johnson City pursue legal action against the county.”

The threat comes at a time when Johnson City is in search of funds to rebuild Town Acres Elementary School to accommodate annual increases in student enrollment.

MORE: Middle school transition plan discussed by Johnson City leaders

Johnson City Superintendent Steve Barnett said several school construction projects in the past have been funded through a state law that requires bond proceeds to be shared between the county and city.

“We’ve co-existed for well over one hundred years together,” he said, in reference to the two school systems.

Barnett said the formula is based on student enrollment. As of the 2019-20 school year, he said 48 percent of students in the county attended Johnson City schools.

“Bond proceeds are paid back by property taxes, 60 percent of the property taxes that are paid in Washington County come from residents of Johnson City,” Barnett said. “At this point right now, your property taxes are not being used equitably to fund projects in both school systems.”

Barnett didn’t take a stance on the calls for legal action against the county.

Jonesborough Town Attorney Jim Wheeler, whose also a Washington County Commissioner, said a potential challenge to the current funding plan would hold up in court.

He said the town sought outside counsel before making a proposal to the county.

“Everybody that we’ve had look at this agrees that this is pretty straight forward,” Wheeler said. “The state law says that county bond proceeds have to be shared with the city but not any other type of structured debt. In this case, a capital lease is a debt but it is going to be paid for out of the capital improvements fund and does not fall under that section of code.”

In other words, he said because Jonesborough is taking out the bond, not Washington County, the proceeds don’t have to be shared with the city.

News Channel 11 asked Jonesborough Attorney Charles London, whose not affiliated with any local governing body, to weigh in on the legal question.

“Because the county is not taking out any bonds, because the county is not raising any tax revenue, it makes it much more difficult for the city to argue that they’re entitled to some of the funds,” London said.

He said both sides make valid points and the disagreement would likely have to be resolved by the Tennessee Supreme Court.

“When you’re talking about millions of dollars at issue it wouldn’t be uncommon for there to be hundreds of thousands of dollars spent on attorney’s fees,” London said. “The citizens of Washington County would probably be better serviced by some sort of mutual resolution.”

The Washington County Commission will hold a Special Called Meeting no later than October 17th to discuss a lease agreement with Jonesborough.

A date and time for that meeting have yet to be finalized.

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