Finance explores options for LFMS
by CHRISTY ARMSTRONG, Banner Staff Writer
Jul 18, 2013 | 719 views | 0 0 comments | 14 14 recommendations | email to a friend | print
Members of the Bradley County Finance Committee spent time discussing the pros and cons of a possible funding source for construction at Lake Forest Middle School at their Wednesday meeting.

The county has been looking for ways to fund necessary changes to the school, which would include a new academic building. The project has been estimated to cost $14 million.

The newest financing option on the table was a lease-purchase agreement through Municipal Capital Markets Group Inc.

Lanis Cope, president of Knoxville-based Cope Architecture, presented committee members with information on the funding option, which he said would obligate them to choose his firm for the project.

“You don’t pay for anything during the time the building is getting designed,” Cope said.

Cope added that the company had experience working on school properties in the area, including Ocoee Middle School and Lee University.

Ed Elkins, committee chairman, asked what “the catch” was, if there would be any costs associated with deferring payment for the three-year period Cope had used as an example of a project funded by the program.

Cope said interest charges would accrue during the time before repayment, which could vary depending on the county’s desired schedule.

“It does cost more interest than what your bond rate is,” Cope said.

The interest rate would be “0.25 percent higher than bonds issued by the same district,” according to literature distributed by Cope.

After representatives from the firm left the meeting, committee members discussed the option further.

“I would support this if it was the only way we can get Lake Forest built,” committee member Jeff Morelock said.

But he said this type of funding option would just be “kicking the can down the road” because it is putting off payment until later.

Bradley County Mayor D. Gary Davis said the county once looked at a similar funding plan for the Bradley County Jail, but ultimately decided against it.

Davis also said the county would need to determine when the Cleveland City Schools share of any funding package would need to be paid, based on state regulations. If the county were to pursue a plan that would have it borrowing money that it would not have to begin paying back for three years, he said he did not know whether or not the county would need to give the city funds before the three-year mark.

“You can’t assume there’s no taking the city out of the picture,” Davis said.

The committee determined it would continue to research that option and declined to vote on whether or not to officially pursue it.

The committee also discussed a request from the Senior Activity Center, which is located on Urbane Road.

One of the facility’s two air-conditioning units, one that serves as a sort of backup for the other, was said to be broken, Davis said as he told the committee about the request.

The Senior Activity Center asked for $24,000 to replace both units. The center is run by the Bradley/Cleveland Community Services Agency, which receives funding from both the city and the county.

While the facility is located in the county, Davis said the county had been leasing the property to the center for $1 a year and that he did not believe the lease terms required the county to undertake such maintenance projects.

The request he read also included information stating the city had agreed to contribute half of the money — $12,000 — on the condition that the county did as well.

Committee members said they would also investigate that further to see if the CSA could find other funding options other than from the city and county governments.