City, schools would split shortfall

By By Leada Gore, Hartselle Enquirer
City Council members have put their signatures to an agreement that spells out the funding agreement for the new high school. Now, the plan awaits the OK of the Hartselle Board of Education, the group that will share in the cost if sales tax revenues fall short of covering the cost of the school.
The council approved the agreement Tuesday night. It was a necessary step in order for the bonds that will finance the $40 million school to be sold.
The agreement limits the cost of the project to $40 million, which includes infrastructure work, design and furnishings. Any overages would be paid by the school board.
In what Mayor Dwight Tankersley said is the “unlikely event” sales tax revenues don’t cover the bond payments, the city and school board will split the payments 50/50. Both entities would probably have to dip into their reserves to cover the payments.
The annual payment is expected to be around $2.8 million. The school board has already pledged $300,000 towards those cost with the city adding an additional $1 million. The rest will be funded through a 1-cent sales tax increase passed earlier this year. City leaders hoped the increase would generate $1.6 million a year but sales tax revenues came in below projected totals.
Tankersley said the timing of the bonds has allowed the city to set aside $500,000 in its sales tax account, money that could be used to help with any shortages. Interest payments on the loan begin in June; principal payments being in 2011.