City, education board, park enter funding agreement

By Luke Brantley
Staff writer
WINFIELD — The City of Winfield, the Winfield Board of Education and Winfield Parks and Recreation have entered into an agreement that will help fun new capital projects in the near future for the park and the school system.
The new agreement will extend the current sales tax appropriation until the debts accrued to pay for the new projects are paid off.
The four percent sales tax appropriation has been in place for around 40 years and has funded important capital projects in the school’s history, such as the building of the high school in 1998, and the current multipurpose athletic facility.
As part of the agreement, the school has agreed to help pay for a new gymnasium to be built by the park, which is something the park has been trying to accomplish for a long time. Also, as part of the agreement, the school will also have access to the new gym when they need it if it’s not being used by the park at that same time.
The city council voted to accept the agreement during its regular meeting on Tuesday night, Nov. 7.
Robert “Bob” Young of the Frazier Lanier Company, who has worked with the city on bond issues before, explained to the council why this agreement was necessary.
“What this will do is extend the taxes that you already send to the school board each year for as long as the bonds are outstanding,” Young said. “Under Alabama law, the only taxes that can be used to pay for a loan are local taxes, so you can’t use a special education trust fund or federal funds. So local funds are the only ones that a school board can use to pay debt service. What this does is extend the tax to a point until the debt is paid off, and this is very usual for city and county school boards when an agreement is adopted by the entity that levies the tax to continue until the debt is paid.”
Young clarified this agreement wouldn’t be adding anything new. It would simply be an extension of what is already in place.
The existing agreement was set to expire in 2028, but instead, it will remain in place until the debt required to fund the new capital projects are paid off.
The agreement was left somewhat open-ended to account for unknown factors, such as the final cost of these projects or the timeline of their completion.
“Quite frankly, because of where we are, we don’t know how much it’s going to cost to build a gymnasium,” City Attorney Todd Atkinson said. “We don’t have all the particulars on what the ultimate cost is going to be. We don’t have a construction contract yet, so the agreement is written in such a way that once we actually get to that point where we are ready to sign that construction contract, we will present it to the school so they can have some input since part of their funds are being used to do that.
“At that point in time, there will be some mechanism for the payment of the portion that the school is paying to the city. That’s all not being agreed to yet because we’re not to that point. But the school is at the point where they need that pledge so they can move forward with what they want to do.
“That’s very significant, so we went ahead and structured this deal where they get their pledge, we get the grant agreed to for the building of the park gymnasium and it left a few things open ended on exactly how we agree to do this and how the money is paid, but that’s just because we don’t know when we’re going to start construction, or the extent of how much money they’ll need to borrow the bond issue and how long it would be, but they do need this pledge so they can go forward.”
The council then voted to pass the new ordinance.
Later that week, on Thursday, the school board met to approve the agreement, and expressed its thanks to the city council, the mayor and the park.
“We’ve been working toward this for a time, and this is monumental,” School Board Chairman James Garner said. “We got a commitment from the city council to extend our tax portion that we receive from the city for a period of time, whether we secure the debt by bond or any other method, as long as it takes to pay that back, we’ve got the commitment from the city to still enjoy that portion that we currently receive now. It’s nothing new or extra. It’s just a commitment to push it way out into the future.”