Council considers agreement with school system regarding revenue sharing
PELL CITY – The City Council is considering an agreement with the Board of Education, which will continue to provide a portion of the 2010 1-cent sales tax increase to the school system.

“I would urge the council to consider it,” said Mayor Joe Funderburg. “It’s a workable solution.”

Without council action, the school system would stop receiving money this April from the sales tax increase the council approved in 2010.

In accordance with the original agreement, the city splits the money generated from the 1-cent sales tax with the city school system. The school system has received half of the money generated from the sales tax hike, but that is slated to end this April,.

Former Mayor Bill Hereford said in 2010 that the city needed the tax increase to meet future obligations, including money to pay off a $12 million bond the city secured to fix sewer overflows, its $50,000 a year obligation for the St. Vincent’s St. Clair Hospital and its obligation to purchase a required amount of water each day from the Coosa Valley Water Supply District.

At the time, Bobby Hathcock, superintendent of Pell City schools, said the additional tax would allow the school system to tap into a low-interest bond for the renovation of Iola Roberts Elementary School.

At Thursday’s council work session, Hathcock asked the council to support the new agreement, which would give the school system 30-percent of the revenue generated from the 1-cent sales tax increase for the next six years. After six years, or Oct. 1, 2020, the school system would again receive 50-precent of the sales tax revenue generated from the 2010 tax hike.

“The City Council has always been good to us,” Hathcock told the council Thursday. “We know you have a lot of needs.”

He told the council the most important asset to the community is “our kids.”

Hathcock said the school system, which is one of the biggest employers in the city, is an economic engine for Pell City.

He said the school system went through three of the hardest economic years in state history.

”If we hadn’t had this (sales tax revenue), I don’t know what we could have done,” Hathcock said.

He said everyone would benefit if the school system continues receiving a portion of the revenue generated by the 2010 sales tax increase.

“We think it’s good for the school system,” Hathcock said. “We think it’s good for the city, too.”

About two dozen school administrators and employees were at Thursday’s work session.

“All our people are here to say, ‘thank you,’” Hathcock said. “We hope you vote favorably on this Monday.”

Tanya Holcomb, the chief financial officer for the school system, said the school system received about $1.4 million last year from its share of the 1-cent sales tax.

Under the new agreement, if passed by the council, the school system would continue to receive about $840,000 each year, if the revenue generated from the sales tax hike remains the same as last year, for the next six years. The city’s sales tax revenue has increased each year since fiscal year 2009.

City Manager Patrick Draper said, in accordance with the new agreement, the city should receive about $600,000 more a year from the revenue generated from the 1-cent sales tax.

“It (the additional revenue) will help pay some of the debt that is expected to increase at the start of next fiscal year,” Draper said.

The City Council is expected to vote on the agreement at its regularly scheduled meeting at 10 a.m. Monday in the Council Chambers at City Hall.

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