Dispute emerges over local merger funding avenues

October 23, 2013 11:05:15 AM

Carl Smith - [email protected]


A rift that has simmered through at least two meetings over consolidation finances emerged Tuesday when committee members Lewis Holloway and Orlando Trainer verbally sparred over how to fund county renovations and the future of joint Starkville-Oktibbeha school tax rates. 


Discussions came to a head when the Commission on Consolidated Starkville School District Structure broached cost estimates for renovations to East and West Oktibbeha County Elementary schools. In previous meetings on merger logistics, the committee proposed preserving Oktibbeha County School District's two elementary schools, shifting grades 10-12 to Starkville High School, constructing a new campus for eighth and ninth graders and reconfiguring Overstreet School for middle school students. 


A report delivered via text message to the board from Bill Welch, Mississippi Department of Education Conservatorship director, stated one of the two county schools would require about a $230,000 roofing project as the district moves toward state-mandated consolidation in 2015. Confusion emerged as to which school Welch referred - he was absent from Tuesday's meeting.  


Financial flexibility, or the lack thereof, has been a major uncertainty throughout consolidation meetings. Both school districts currently operate on two different millage rates, and mills within and outside of Starkville School District each bring a different amount of money to the separate systems.  


Board members have alluded numerous times this year that debt accrued by each system will be retired by the individual taxing authorities past consolidation, and that a shared, countywide funding system can only begin once the two systems merge. 


Holloway reminded board members that SSD has taken steps to address numerous construction projects - roofing and air conditioning needs, primarily - before consolidation occurs. The real sticking point is with bonding capacity. Although a handful of mills will roll off the books in the coming years, SSD is near its capacity - the school board approved $10 million in bonds, including $2 million in no-interest loans, in August for its various maintenance and repair projects. As for county bonding capacity, Holloway again hammered home a message he's repeated in previous meetings: the county electorate has been unwilling to pass improvement bonds in the past. 


Once consolidation occurs, SSD will use about 11 mills to service its own debt, while the county will have no outstanding obligations. A single-district tax rate would then place about a 51-mill levy on county residents, while Starkville residents would face about a 62-mill levy.  


The county, he said, must seriously begin discussions on how to fund its own improvements. This came after Holloway provided a list to OCSD Conservator Margie Pulley of about $600,000 worth of curriculum and non-building requirements needed to ready the county schools for consolidation. 


"What I'm saying is (architects involved in SSD roofing projects) really need to evaluate these (county) roofs," Holloway said. "We've spent a lot of money and bonding...to take care of our roofs. We have more than $5.5 million in projects we plan to complete before consolidation takes place. I think the county should take care of its projects before that takes place." 


The county's future millage adjustment to a one-district rate - about a 5 mill decrease from its current 56-mill levy - would also represent a $350,000 loss in district-wide revenue, Holloway said. Increasing that rate to one near Starkville's could net the county enough money to service bonds that would fund renovation efforts. 


"I think it has to be fair," Holloway said of the varying tax rates. His sentiments were echoed by committee member Rex Buffington. 


Trainer, who serves as the Oktibbeha County Board of Supervisors president, said county property values would increase under a unified school system, thereby adding to the potential tax collections in the future. 


"You don't know that," Holloway replied. 


"They will (increase)," Trainer countered. 


"I'm just saying if Starkville taxes itself, bonds itself, pays bond indebtedness ... and is taking care of its projects, and the Legislature has told us to consolidate, it just looks like to me it should be fair,"  


Holloway added. "You have a funding source right now to fix these issues. Just tell me ... do you think it's fair (to have two separate millage rates when) we're one district?" 


"The county has never passed a bond issue, and that has led to some of these issues. It's time to begin the discussion on the county bonding itself to take care of its problems," the superintendent said in closing. 


Trainer alluded to this month's C Spire investment, which is expected to net the county about $250,000 in additional school taxes, and other maneuvers that could significantly impact how much money a mill brings into the consolidated district.  


"The problem remains. You've got building issues that need to be given attention to now," Holloway said. "You're not bonded out at all. Why not go ahead and bond yourself and start fixing these issues?" 


The board agreed to determine specific county school needs and their potential costs. A countywide logistical plan - which specific schools will serve individual grades - was not finalized Tuesday. 




Board meets with desegregation lawyer 


Merger committee members ended their public meeting with an almost hour-long, closed-door meeting with Holmes Adams, a lawyer from Adams and Reese LLP who specializes in Department of Justice-mandated school desegregation orders. 


No motions came forward after executive session ended.  


SSD Board Attorney Dolton McAlpin previously advised the school board to utilize Adams as an advisor since DOJ approval is still needed for any consolidation effort. Both SSD and OCSD are still under federal desegregation orders. 


"Despite the fact that the Legislature believes it may have consolidated the school district, it won't happen until a federal judge says it's going to happen and the Department of Justice agrees," McAlpin told the school board in April. "A federal judge trumps the Legislature, and I'm not sure they understand that."

Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch