July 14, 2014 8:51:42 PM
Starkville Mayor Parker Wiseman will introduce a resolution during Tuesday's board of aldermen meeting authorizing the legal transfer of over-collected school taxes back to Starkville School District.
If aldermen approved the motion, the city would reclaim $474,081 in over-collections and interest from a retired 1986 bond issuance for school repairs, then immediately transfer the funds back to the district pursuant to Miss. Code Ann. 27-105-367.
City staff discovered the funds drawing interest in an account this spring. At the time, officials said that due to changing statutes and tax-collecting and -paying authorities in the '80s, it is believed the over-collection occurred in part when the original millage rate to pay off the bond's principal and interest was not adjusted properly after property value reassessments. Compounding interest helped balloon the amount.
Wiseman approved a transfer of the funds to the school system, but the city attempted to recall the money after Vice Mayor Roy A. Perkins said the move was made without board authorization and instructed the city attorney to investigate all legal avenues to reclaim the money.
The mayor attempted to get clarity on the issue from the state attorney general's office, but an opinion was provided to him by the state auditor's office instead. The Dispatch was unable to receive a copy of the opinion by press time.
Tuesday's action would reconcile the original action and provide a legal means for providing the school district money Wiseman said it deserves.
"I believe the way I went about issuing the original check was not the right way to make the transaction. It's clear to me that the right thing to do is transfer the money to the school district, so it's my intent to make sure we do the right thing in the right way," he said.
A previously obtained legal opinion stated the city could take the money and place it in its own general fund, but Starkville aldermen would then have to reduce taxes in the same amount - almost 2.5 mills.
Complicating matters is the fact that SSD's territory encompasses all of Starkville and a portion of outlying county area. If the city was to reduce taxes, residents living outside city limits but within the school district would not feel any relief.
"These funds were procured for the purpose of building school facilities, and the school system is the only entity with jurisdiction over both its facilities and the residents of the added territories," he said. "Therefore, there is no public body other than the Starkville School District that can make a decision as to the disbursement of those funds that is in keeping with the public trust under which they were collected.
"It is clear that the city has the authority to transfer these funds to the school system," Wiseman added about the auditor's opinion.
Last week, SSD Superintendent Lewis Holloway said he hoped the city and school district could find an amiable solution that would allow the funds to be used toward campus repairs and renovations.
In 1986, Starkville issued about $4 million for district renovations, remodeling and equipment. Approximately $900,000 was earmarked specifically for the old middle school, which is now the Greensboro Center.
Almost 30 years after the issuance, the facility still requires additional repairs. A spring study performed by Tenn.-based Structural Design Group states inspectors found "advanced decay" associated with roof trusses above the facility's auditorium; green growth, mud and other evidence of water infiltration; and deterioration associated with the building's facade and masonry.
Holloway last week said structural repairs, along with asbestos abatement, could proceed if the district is allowed to keep the money.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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