Last week it was learned state officials had turned down a grant to Cocke County for upgrades to the Highway 25E industrial park because the county does not own the land.
At a Monday evening meeting, the Cocke County Finance Committee agreed to recommend Partnership President Lucas Graham be tasked with negotiating an agreement for the county to purchase the 98-acre site, through the Industrial Development Board, at a cost of $10,000 per acre.
Bill Shults speaking on behalf of the Shults family which owns the land, said Eternal Beverage wants to locate at the site but has demanded language in the contract to control what can locate on the rest of the property in the future.
"That would have exposed my family (to liability) from now on," he told the committee.
The members were told, under state law, having Cocke County as owner of the land would reduce the liability because governmental agencies are protected under state law.
The land was appraised at $980,000 total 18 years ago, and Shults pointed out acreage near the new Highway 411 intersection recently sold for $68,000 per acre.
The plan is for the Industrial Development Board to hold the note on the land for 10 years, with the county paying for the property. Under that scenario, officials believe the site will qualify for a state grant to pay for the access road and pad for Eternal Beverage at a cost of $480,000, as well as additional needed infrastructure.
The committee was told that the Tennessee Department of Transportation may be willing to build an access road stretching from Highway 25E to West Highway 25/70, if the county owns the land.
Finance Committee Chair Forrest Clevenger said the cost of the land would add between two and three cents to the new property tax rate.
Scott Gibson of Cumberland Securities presented alternatives to the committee to fund a jail and school building project.
The county currently has a debt of $19 million, and Gibson proposed a plan to finance the additional needs over a 30-year period at an anticipated interest rate of about 4 percent.
If $30 million is borrowed the annual payment on the loan would be $1.8 million, borrowing $40 million would mean an annual payment of nearly $2.5 million and borrowing $50 million would cost $3 million annually. But the financial adviser cautioned borrowing more than $40 million would stretch the county financially.
Gibson pointed out one of the reasons Cocke County is finding it difficult to raise the needed revenue is because nearly half of its property is in the national park and federal forest, and not subject to a property tax.
He suggested the committee hike the property tax rate to $2.99 (from the current $2.83) to fund the borrowing. While over the next few years revenue is expected to increase through retail and manufacturing growth locally, inflation also will increase costs.
Clevenger again pointed out a $25 wheel tax would bring in $1 million in revenue annually, and a $30 tax would raise $1.4 million.
Gibson said most rural counties in the state currently have a wheel tax.
The committee also heard from Kirk Morris of Rural Development who said his agency could finance a jail and school needs over a 40-year period at an interest rate of 4.25 percent.
Chair of the Cocke County School Board Dr. Ken Johnson told the committee it may be difficult to get additional state education funding this year because the newly passed voucher bill is taking a lot of state money.
He said Gov. Bill Lee previously had said the voucher bill, which provides funding to students in several large cities to attend a private school, would not affect Cocke County.
"The vouchers are impacting every county in the state by a total of $100 million a year. If you broke that into 141 school districts, we could be helping you to the tune of about $500,000 a year.”
Johnson called on everyone in attendance to push for a repeal of the voucher bill.
A recent Vanderbilt poll found just 40 percent of state residents support vouchers.