City, BOE reach agreement on sales tax ordinance
by David Atchison
PELL CITY – City and school board officials met Tuesday morning to iron out an agreement with revenue generated from the 2010 one-cent sales tax hike.

“We feel like we’ve come to an acceptable solution for the city and the School System,” Mayor Joe Funderburg said Tuesday.

At Monday morning’s council meeting, a proposal to continue sharing funds from the additional revenue generated by the 2010 sales tax increase stalled, when Councilwoman Dot Wood voted no to suspend the rules so the council could vote on a proposed agreement between the city and the school board on its first reading.

After Monday’s council meeting, council members, with the exception of Councilwoman Sharon Thomas, said they did not support the proposed ordinance as written.

The proposed ordinance would allow the school board to continue receiving a portion of the one-cent sales tax. Without the passage of a new ordinance, the school system would stop receiving half of the revenues generated from the 2010 one-cent 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 sales tax revenue generated from the 2010 sales tax hike.

Council members said they wanted the ordinance to state that the city would receive 100-percent, not 50-percent of the sales tax revenue generated from the 2010 tax increase after the six-year period.

Council members said the school board could re-negotiate with the council to extend the revenue sharing agreement at a later date.

Council members cited the city’s debt and future planned projects as a need to have all the money generated from the 2010 sales tax increase.

Monday’s action surprised school board officials, including School Superintendent Dr. Bobby Hathcock.

“No, we did not expect this,” he said following Monday council meeting.

Funderburg said he, Council President James McGowan, Councilman Jay Jenkins, and City Manager Patrick Draper met with Hathcock, Assistant Superintendent Michael Barber, School Board members Cecil Fomby and Tammie Williams, and the School System Chief Financial Officer Tanya Holcombe to iron out an agreement.

After negotiations, city officials said Tuesday that the council is expected to pass the original ordinance but will first pass a resolution outlining an effort to make the school system more self-supporting.

Funderburg said the city and school system, jointly, are going to actively pursue setting up a Pell City school district, so people in the school district can vote for an increase in ad valorem taxes to support their local schools.

Currently about 52 percent of the students who attend Pell City schools live outside the city, and do not have representation on the school board, a mater of taxation without representation.

“To me, it’s not right,” Draper said Tuesday. “This is an opportunity for the city to have a hand in finally resolving this.”

Draper said city and school officials have six years to establish a new school district.

He said after Oct. 1, 2020, the city would provide the school system 50 percent of the revenue generate from the 2010 sales tax increase only if a school voting district is not formed and the people living in the school district do not voted in favor of additional funding for the school system.

McGowan said the school system has plans to move forward with an $8 million project to renovate the Spring Sports Complex, the high school football stadium and build a new quarter-mile running track for students.

He said the school system needs to count on a certain revenue flow before it can secure a bond for the proposed $8 million project.

McGowan said either way, the school system will have the funding necessary for bond payments.

“I think this is best,” McGowan said. “This will give the school system an opportunity to continue with their plans.”

Funderburg said a resolution is not drafted yet, but the council should have a copy of the resolution outlining in detail the city’s agreement with the school board by its next council work session, Feb. 21.

He said the council could vote on the resolution and ordinance at its next regularly scheduled council meeting at 6 p.m., Monday, Feb. 25.

Funderburg said Tuesday’s meeting was held at the school board office.

“We all walked out in agreement,” he said. “We have to work together hand-in-hand to address what I considered an injustice since 1982.”

Draper said the city and board will share in the cost associated with establishing a new school district for the Pell City Board of Education.

"I think there was just a misunderstanding," Hathcock said Tuesday afternoon.

Hathcock said he feels much better after Tuesday's morning meeting with city officials.

"Again, we are appreciative of what the city has done for us," he said.

Contact David Atchison at datchison@dailyhome.com.

© 2013