Renewal of proposed sales tax ordinance stalls
by David Atchison
Feb 12, 2013 | 2625 views |  0 comments | 9 9 recommendations | email to a friend | print
PELL CITY — It appears the City Council does not support as written an ordinance pertaining to the 2010 1-cent sales tax that is currently shared between the city and School System.

At Monday morning’s council meeting, a motion was made to suspend the rules so the council could vote on the proposed ordinance, but Councilwoman Dot Wood voted no, which will now require a second reading.

“I wanted to give more time for the council to consider this,” Wood said.

The proposed ordinance would allow the school board to continue receiving a portion of the 1-cent sales tax. Without the passage of a new ordinance, the School System would stop receiving half of the revenues generated from the 2010 sales tax hike after April 30, 2014.

The proposed ordinance would allow the School System to continue to receive 50 percent of the sales tax revenue until Oct. 1, 2014, when it would be lowered to 30 percent for the following six years. After Oct. 1, 2020, the School System would again receive 50 percent of the revenue generated from the sales tax hike.

Wood said she wants the ordinance to state that the city receives 100 percent of the 1-cent tax after the six years, like the original agreement.

“If the city wants to renegotiate then, that’s fine,” Wood said. “I want the original deal. … Look at our debt.”

Council President James McGowan said it appears the majority of the council wants the entire sales tax revenue to come back to the city after the six-year period. He said the School System will continue receiving money generated from the 2010 tax hike.

“It’s not putting an end to it,” he said.

Councilman Terry Templin said he also wants to the city to get 100 percent of the sales tax after the six-year period.

Templin said the city has many projects officials are considering and needs the tax revenue if those projects are to move forward.

“Our intention is to help the School System,” Councilman Jay Jenkins said.

He said the council supports the School System receiving 30 percent of the sales tax increase for the next six years.

City officials said 30 percent of the sales tax increase is about $800,000 each year for the School System.

Jenkins said after that time, it should resort back to the original agreement.

He said sharing of the sales tax was to help the School System through tough economic times, and the council is still helping the School System by extending the agreement by six more years at 30 percent instead of 50 percent.

“Right now, we can’t give it all back,” Jenkins said. “The half-cent return was a big part of our future plan, so it’s important. We can’t do everything with no money.”

He said nobody knows what the future holds, and the council is voting to support the School System with a portion of the 2010 sales tax revenue for an additional six years, when the system would not have received additional funds under the original agreement.

Sharon Thomas was the only council member who said she supports the proposed ordinance as written.

“I’m totally 100 percent for the School System to continue receiving the tax money,” she said.

Schools Superintendent Dr. Bobby Hathcock said he was surprised at the turn-around.

“It’s going to change things for us significantly,” he said. “No, we did not expect this.”

Hathcock said school officials met with city manager Patrick Draper on behalf of the council and thought a good-faith agreement was reached.

“I hate to have the School System come with hat in hand every six years asking for money,” Hathcock said. “Again, we appreciate what the city has done for us. … They are all trying to do good things.”

Hathcock said the School System was expecting to secure an $8 million bond issue for a new high school track, along with major renovations to the football stadium and Spring Sports Complex, so long-term revenue the system can count on is important.

“This is tremendously important to us,” Hathcock said. “We thought we had an agreement worked out.”

City attorney John Rea said the current ordinance was already introduced in a council meeting, so the council must move forward with the proposed ordinance.

The council could vote on the ordinance at its next meeting in two weeks.

“They could have a motion to amend the ordinance,” Rea said after Monday morning’s council meeting.

In other matters, the council:

• Approved a request from Dr. Ken McMillan with the Pell City Animal Hospital for a one-month extension regarding a zoning violation.

• Rejected all bids for the wetlands project and approved accepting new bids for the project.

• Rejected all bids for the heating and air-conditioning system for the Pell City Community Center and to solicit new bids.

• Approved a street light at the Mays Bend Road and Cedar Lane intersection.

• Approved waiving 21 utility bills for customers who are still having discolored or smelly water.

• Tabled a request for new lighting at the 156 Exit or Eden Exit on Interstate 20.

• Amended the budget to reflect a $750 donation to the Pell City Police Department.

• Approved a resolution expressing support for a pre-trial diversion program bill for St. Clair County municipalities.

Contact David Atchison at datchison@dailyhome.com.