Mayor: Full council does not support revenue split
by DAVID ATCHISON
Feb 21, 2013 | 3131 views |  0 comments | 5 5 recommendations | email to a friend | print
PELL CITY – An agreement to continue sharing the revenue generated from the 2010 1-cent sales tax increase has the support of some members of the council, but not full support of the city body.

That’s what Mayor Joe Funderburg told members of the Pell City Board of Education at their Tuesday night meeting.

“The majority of the council members today are in favor of it,” Funderburg said, but added not all members of the council support it. “Right now it would be a split vote in favor. Two weeks from now, it could be different.”

The School Board voted against Superintendent Bobby Hathcock’s recommendation to approve a resolution supporting the proposed agreement.

The BOE voted 2-3 against the approval of the resolution and tabled the matter until the board had more time to look over the agreement.

The School Board has scheduled a work session for 2 p.m. Sunday at the board office to discuss the matter.

BOE members received a copy of the proposed agreement just prior to Tuesday night’s board meeting.

Board member Joe Sawyer appeared concerned about the wording of the agreement and whether the School Board could eventually lose funding from the city, when the school system needs a reliable flow of revenue to secure an $8 million bond issue for future projects.

“I see doors out,” he said.

City attorney John Rea said the School Board must fully support establishing a new school district, so the school system can rely on funding through ad valorem taxes instead of city sales taxes.

“This Agreement shall expire on Oct. 1, 2020,” the proposed agreement states. “After that date, this Agreement and the covenants contained herein shall be null and void, unless the parties agree in writing that this agreement shall be extended.”

Funderburg said it was the council’s intentions to work with the School Board, not against it.

“We aren’t trying to strong arm,” he told the School Board. “Our intent is to work closely with the Board.

Funderburg said he was a Pell City graduate and most members of the council were Pell City graduates.

“Our hearts our here,” he said.

In accordance with the agreement, the city would share in the cost of setting up a new school tax district.

“This is the first time we’ve had a partner come to the table and say. ‘We’re willing to help you,’” Hathcock said.

He told School Board members they have total control of the expenditures involved with setting up a new school district.

“The Board has to approve the fees spent on this,” Hathcock said.

He told the School Board that the council could change their mind tomorrow and keep all of the revenue from the 1-cent sales tax increase.

“This is good for the people, if we can do it at a reasonable cost,” Hathcock said of setting up a new school district.

Officials say a new school tax district would allow people who have children in the school system to vote on any increases in ad valorem taxes and the ability to vote for representation on the School Board.

Nobody has said or even estimated how much it would cost the city and school board to set up a new school tax district.

Currently, more than 50 percent of the students attending Pell City schools live outside the city limits, and parents of those students cannot participate in municipal school board elections.

If an agreement between the School Board and City Council is not finalized, the original sharing agreement between the two entities will end April 30, 2014, when the city will receive 100 percent of the revenue generated from the 2010 1-cent sales tax hike. Currently, the sales tax revenue is split equally between the School Board and city.

In accordance with the new proposed agreement, the School Board would receive 30 percent of the revenue generated from the 2010 tax increase for the next six years or until 2020.

Officials said after Oct. 1, 2020, the city would provide the school system 50 percent of the revenue generated 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 vote in favor of additional funding for the school system.