The Oak Ridge, Tenn., City Council voted this week on an initial debt resolution for the issuance of up to $5 million in general obligation bonds.
Janice McGinnis, city finance director, stated in a memo that the bonds are to fund the replacement of roofs at Jefferson Middle, Woodland Elementary and Oak Ridge High schools, as well as the Central Service Center. The Robertsville Middle School roof is currently under contract.
All of the City Council members present voted in favor of the resolution. Council members Kelly Callison and Derrick Hammond were not present.
The resolution sparked some discussion about debt and how the city will repay it.
"We keep bumping against that ceiling," said Council member Chuck Hope, referring to the city having to rely on debt. "At some point, either that ceiling moves or we do."
"We can't not take care of our property and put roofs on," Mayor Pro Tem Rick Chinn said. However, he said the city needed to look into how to pay for its projects. He said he wanted another revenue stream other than raising the property tax rate and said the city needed to look into which of its programs were "wants or needs."
He also said he was worried about the city gaining less revenue during an economic downturn.
"We've been fortunate that we've hit a good stretch of good economy," Chinn said. However, he said he worried an economic downturn would come "sooner rather than later."
Council member Ellen Smith had a different perspective.
"I think we need to get away from the notion that an increase in the property tax is a terrible thing. It's something that has to happen every now and then or we're not going to continue to operate this city in the fashion that we think it should be operated," she said. "In most jurisdictions when property values go up, property taxes go up because everybody's rate is based on the actual property value. Here we re-adjust the rate usually downward.
"We need to look hard at providing value for the future and not just taking care of what we do right now," Smith said regarding the roofing issues.
She said the city could not continue to expect to give its employees raises "forever when they need cost of living adjustments based strictly on growth in the community."
Since Council adopted the initial resolution, the public may petition for a referendum on the debt. A referendum on the debt would go ahead if 10 percent of Oak Ridge eligible voters petition within the designated time period of 20 days.
City Council will still have to vote on a final bond resolution for the bonds to be issued.
"This is an authorization, not an actual issuance," City Manager Mark Watson said at the meeting.
"You can pull the plug between now and adopting the final bond resolution," explained Chris Bessler of Cumberland Securities, which is in charge of selling bonds for city projects.
City Council voted in June to raise the property tax rate by two cents per $100 of assessed property value. At the time, Watson argued in favor of the increase due to obligations to pay off city debts.
Anderson County Commission is to vote Monday on possibly rating the county property tax rate, which includes the county portion of Oak Ridge. That meeting is set for 6:30 p.m. Monday in Room 312 of the Anderson County Courthouse in Clinton.
