Washington County approves up to $20.5 million loan for new Pre-K–12 school in 3–2 vote

The Washington County Board of Commissioners voted 3–2 on May 1 to authorize up to $20,500,000 in financing for a new Pre-K–12 school, approving Resolution 2023-018.

County Manager and County Attorney Curtis Potter, with bond counsel Bob Jessup and Ted Cole of Davenport Financial, briefed commissioners on timing and terms. Potter said the county is pursuing the loan now because legislative funds that could reduce the local funding gap may arrive too late to avoid borrowing. "We would not get a penalty for paying off early — 10% (about $2 million) a year for the first 10 years," Potter said, describing a prepayment penalty structure staff said would apply under current loan terms. Potter also said the county may need to increase property taxes if the additional legislative funding does not materialize.

The board’s approval came after debate over whether to wait for potential legislative assistance and how to avoid raising local taxes. Commissioner Tracey A. Johnson moved to approve Resolution 2023-018; Commissioner Ann C. Keyes seconded. Commissioners Johnson, Keyes and Chair Julius Walker voted in favor; Commissioners Carol V. Phelps and John C. Spruill voted no.

The approved resolution authorizes the county to seek and accept financing up to the stated amount; it does not itself set a tax-rate increase. Potter told the board the Local Government Commission (LGC) would review the county’s financing application; commissioners noted an LGC meeting was scheduled the following day. Potter also identified $500,000 in ARPA funds previously held in utilities as a possible offset that would equate to about a four-cent tax-rate reduction, but said using those funds would affect the county’s flexibility.

Why it matters: The loan action is intended to close a funding gap for a new consolidated Pre-K–12 facility after Washington County Schools (WCS) closed Pines School in March 2021 for air-quality reasons. WCS Superintendent Dr. Linda Carr told the board that WCS has received two grants totaling $50 million but additional local or legislative funds are still needed. The financing decision moves the county forward on the project while preserving options to prepay if and when funds become available, subject to the penalty Potter described.

Next steps: The board approved the financing authorization at the May 1 meeting; the financing application will proceed to the Local Government Commission for review. The county budget presentation is scheduled for May 15 and a public hearing on the budget is slated for the June 5 regular meeting.