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Johnson City approves initial bond plan to fund new elementary school and infrastructure projects
Summary
City commissioners approved an initial bond public notice and an authorizing resolution to begin issuing roughly $54 million in bonds over two years to fund the Newtown Acre elementary school and water, sewer and road projects; sale is planned in October with funding by December.
Johnson City commissioners on Sept. 8 approved an initial bond public notice and authorizing resolution to start issuing bonds to pay for a new elementary school and a slate of infrastructure projects.
Assistant City Manager Steve Willis told the commission the bond package under consideration would first issue about $54,000,000 in this cycle and finance the first portion of a proposed $45,000,000 Newtown Acre School project — approximately $25,550,000 now, with the remaining school funding expected in early summer next year to take advantage of potentially lower interest rates. Willis also said the current issuance would include roughly $6,650,000 for selected public works projects (including widening and a signal at Rockingham Road and North Roan Street, and widening at Christian Church Road and Boones Creek Road) and about $21,800,000 in water and sewer capital projects, including Sinking Creek sewer upgrades and Knob Creek aeration.
John Warner, municipal adviser from Cumberland Securities, explained the two-step process required by state law: publishing an initial public notice that opens a 20-day comment period and then approving the detailed authorizing resolution that sets terms for sale. "Once that 20 day period expires, we will... be authorized to go ahead with the bond issuance," Warner said. He said staff anticipates taking bids in late October and funding the bonds in December.
Commissioners asked about the effect on the city's debt limits and ratings. Willis said the debt position would remain well under the charter-imposed cap: the issuance would put the city's debt at about 3.5% of assessed tax value, well below the 10% limit. Warner said the city expects to contact Moody's and possibly S&P for ratings and will award the sale based on true interest cost.
The commission voted to approve the initial public notice and the authorizing resolution and directed staff to publish the notice and proceed with the bond sale timeline.
What happens next: the initial public notice will be published to start a 20-day public comment period; staff expects to solicit bids in October and have funds available by December, with the commission to receive more detailed debt-service information at the next reading.
