Hamilton County debt will top half a billion dollars when the largest bond in county history closes next week, according to county officials.
The record-breaking debt brought on by the $260 million bond issue, recently approved by the commission, will stymie the county’s ability to return to the bond market for five years, commission Chair Jeff Eversole, R-Ooltewah, told commissioners Wednesday.
“It seems like we are tapped out and locked in for a while,” he said.
In 2018, the county’s debt reached a record $360 million. With the new bond issue, that debt level is now projected to be $507 million, Lee Brouner, the county’s finance director, told commissioners Wednesday.
Meaning, “48% of this year’s budget would be our debt,” Eversole said.
The new bond, priced Aug. 27 and set to close Sept. 12, will be for 20 years, unlike the county’s previous 15-year bonds. Brouner said the county is expecting to pay $112 million in interest.
The bond issue, proposed by Hamilton County Mayor Weston Wamp and Hamilton County Schools Superintendent Justin Robertson, was intended to address the long-brewing school facilities crisis. Still, spending priorities can shift and have shifted with previous bond issues. Commissioners have final approval of how bond funds are spent.
(READ MORE: Hamilton County Commission passes $260 million bond)
“I do think it is important to make sure our schools are safe and structurally sound, but we also have other responsibilities that include infrastructure improvement, like in the Ooltewah area where we have had rapid growth,” Eversole said. “We need to be thinking about the safety of our citizens as it relates to security and fire protections. We need to be thinking of those constraints. We have got to be multidimensional and conservative in how we are addressing these issues.”
After being asked about the county’s ability to issue bonds over the next years, Wamp issued a statement Wednesday saying the county was fiscally sound.
(READ MORE: Hamilton County maintains AAA rating)
“Hamilton County is in a very strong financial position, evidenced by recent AAA ratings from the three major bond-rating agencies,” Wamp said. “If we are serious about improving public school facilities, now is the time to take bold action.”
Brouner told commissioners that, historically, the county has paid off its debt fairly quickly but said that without more revenue it would be tough to go to the market within the next three or four years.
Contact Joan McClane at jmcclane@timesfreepress.com or 423-757-6601.