During a well-attended panel discussion last week, county representatives told Signal Mountain residents that creating a new municipal school district would not grant the town legal claim to the area's three county-owned school buildings: Nolan and Thrasher elementary schools and Signal Mountain Middle/High.
Hamilton County Board of Education Attorney Scott Bennett specified during the Q&A session Sept. 7 that county school buildings are titled in the name of the county's board of education, according to state laws.
"Municipalities can buy buildings, can lease buildings, can build buildings, but there's nothing in there that says they can take title to existing county buildings," he said regarding statutes that allow municipalities to start their own school districts.
Even if the law could be changed to allow for title transfers, Bennett continued, it would not apply to Signal Mountain Middle/High School. The facility was built as part of a four-way interlocal agreement between the towns of Signal Mountain and Walden, Hamilton County and the Hamilton County school board. The contract, signed by all four parties in 2005, stipulates that the county school board would own, maintain and staff the building for "the life of this facility," Bennett said.
"The Hamilton County Board of Education has the contractual obligation to own and operate this building as long as there's one child who lives on this mountain who wants to come here," he said.
Ownership of the SMMHS building could be transferred by changing the interlocal agreement, the attorney noted, but only if all four entities agreed to alter the contract.
Though the town of Signal Mountain's School System Viability Committee has not yet initiated formal discussions about building acquisition, Bennett's statements challenge information shared with the committee during its fact-finding trip to Shelby County in June, when SSVC members met with leaders from municipalities there that launched their own school systems in 2014.
Referencing an 1898 Tennessee Supreme Court decision included in Bartlett City Schools' feasibility study, Jason Manuel, superintendent of Germantown Municipal Schools, told SSVC members that in his district, the "buildings go with the kids."
The 1898 annexation-related case, Prescott v. Town of Lennox, granted an expanding municipal school district the rights to obtain a school acquired by Shelby County, ruling that "public property is not 'owned' by a governmental instrumentality, but rather 'is only held in trust for the public,'" the study reports. The ruling could mean a county school system would be required to transfer school facilities to a municipal school district, the study suggests.
Still, Bennett said the municipalities paying Shelby County to acquire buildings in order to create their own school district served as evidence to the contrary. Though Manuel said during the June meeting that the payment was not for the school buildings, but for other post-employment benefits provided to retired employees, Bennett expressed to the Signal crowd that he was not convinced.
"If the title automatically goes over, then why would the municipalities have had to pay a red cent?" he argued. "It's because the title didn't go over."
Generally, Bennett added, buildings cannot be sold if they have bond debts still attached to them, which would pose another problem for a newly formed Signal school district.
Though Signal will finish paying the $7.7 million loan for the town's contribution to SMMHS' construction this fiscal year, Al Kiser, chief financial officer for Hamilton County, who also sat on last week's panel, said the county board of education still has a balance of $14.7 million to pay on the $43 million building. That debt is expected to be paid in full by 2023, he said.
Regarding the addition made to Nolan Elementary School in 2014, the county still has $4.8 million left to pay for that $11.8 million project, Kiser said. That debt will be paid off by 2030.
Thrasher is the only Signal school whose debt has been paid off, said Kiser.