HomeMy WebLinkAbout09-13-2010 Regular MeetingCommittee:
Date & Time:
Place:
Subject:
Public Meeting Notice
Fairhope School Feasibility Study
Committee
Monday, September 13, 2010 at 5 :00 p.m.
Fairhope Civic Center
161 North Section Street
Fairhope School Feasibility Study
Presentation by Dr. Ira Harvey
Notice must be stamped, dated and initialed before posted on
bulletin board.
POSTED
~~~
SIGNATURE
,
STATE OF ALABAMA )(
COUNTY OF BALDWIN )(
The School Feasibility Study Advisory Committee met at 5:00 p.m.,
City Hall , Civic Center, 161 North Section Street,
Fairhope, Alabama 36532, on Monday, 13 September 2010.
Present were:
Debbie Quinn, Chairman
Members: Mike Lucci, Amanda VanderHeyden, Terri Bishop, Mike Keating , Jim
Ketchum, and Mayor Kant.
Liaison Members : Lonnie Mixon, Dan Stankoski, Mike Ford, Rick Kingrea, Gregg
Mims, Lisa Hanks , Nancy Wilson , and Chuck Zunk .
Debbie Quinn called the meeting to order at 5:00 p.m. She said there were 3x5 cards
being handed out for questions which would be addressed after the City Council meeting.
She also thanked everyone for being there tonight. We need to focus on the financial
feasibility of having a school system.
Dr. Harvey gave the following Power Point Presentation:
A REPORT ON THE FINANCIAL
FEASIBILITY TO FORM AN INDEPENDENT
CITY SCHOOL SYSTEM FOR THE
MUNICIPALITY OF FAIRHOPE, ALABAMA
Slide 1
Preserted
September 13, 2010
Prepared by
Ira W. Harvey , Ed .D.
Decision Resources LLC
THE REPORT:
• Written to serve the interests of the City
Council , other elected officials , educators,
general public , media , potential future
Fairhope Board of Education members
along with any of the Board 's employees
or legal counsel , and negotiators for final
separation.
Slide 2
13 September 2010
Page2
PREFACE:
• Statutory authority to create a city school
system resides with the city council.
• If by resolution this is done, the city council
appoints the members of the board of
education.
• The city council does not administer the
schools; but does make initial and future
appointments to the board .
• By the same token the voters elect/re-elect the
city council.
Slide 3
PREFACE: continued
• Upon legal separation, the board
-Can set attendance policy on any rational basis;
-Must demonstrate a sound budget and submit plans
for long term management (ex. Facilities) of the
schools to the SDE:
-Cannot bind a future board of education except by
guarantees of personnel rights and obligation of
debt service;
-Must annually balance its budget and legally
provide at a minimum educational services for
residents of the city.
Slide 5
Slide 7
THE STUDY WITH TOPICS
AND PAGE NUMBERS
Page 1
1. INTRODUCTION
PREFACE: continued
• If a city school system is formed and if a board if
appointed ;
-The board has the authority to receive appropriations and
bequests:
-The board has the aulhonty lo hire personnel;
-The board has standing to attend SOE and MSB /SSA
meeting;
-The board has no authority to administer schools
-The board has no authority to receive school revenues;
-The board has no authority to initiate a school tax
;referendum.
Slide 4
PREFACE : continued
• I am making no recommendation for or against
a proposed Fairhope City School System.
• If you don't like the statutory provisions i
present, the blame is not with me but rather
with lawmakers .
• However this report and presentation is, to the
best of my knowledge, a sound representation
of existing statutes and judicial interpretation
of those statutes .
Slide 6
Page 3
• § 16-8-8. Administration and supervision of
schools generally .
The general administration and supervision
of the public schools of the educational interests
of each county, with the exception of cities
having a city board of education, shall be vested
in the county board of education; provided, that
such general administration and supervision of
any city having a city board of education may be
consolidated with the administration and control
of educational matters affecting the county and
vested in the county board of education ( Code of
Alabama 1975, Section 16-8-8).
Slide 8
13 September 2010
Page 3
Note:
• In Alabama, the laws governing schools
refer to "School System " and not "School
District" as is common in other states .
• "School District" refers to a legally created
territory of a county for ad valorem school
tax purposes . Therefore, "School District"
actually means "School Tax District."
Slide 9
Page 3
§ 16-13-191. School tax district-Boundaries fixed
by county board .
In order to make 11 possible to work out a system of
local tax units adapted to the needs of the whole county,
the county board of education of its own initiative shall fix
the boundaries of any school tax district within its
Jurisdiction in which it is proposed to levy a local school
tax . In making application for a special election in any
such district. the county board of education shall submit
a map made by the county surveyor. or other competent
person. showing the boundaries of the school tax district
for which a special tax levy is proposed. indicating the
section or sections and ranges. together with the correct
descnption of Ihe boundaries of the said district for which
a special tax levy is proposed for education (Code of
Alabama 1975. Section 16-13-191).
Slide 11
Page4
§ 16-13~199. Municipality may remain under county board of
education; dlsposlUon of tax when city assumes control of
schools.
When a municipality under lhe jurisdiction of a county board of
educahon a.ttains a populabon of 5.000 or more, according to lhe
~~~::~!~~ :;~!~b~~~~;'!~~:~: ::~n~~eb~~~: of lhe
agreement between that board and the aty council of the
municip~ty . wtnch agreement shall be expressed in resolutions
adopted by and spread upon the minutes of the two authorities. If ~~~~u:;:1
: :~iari~;~:r!~~~li~~Jl~Oa~::u~~i~~:l~;~ril
be vested in a city board of education. and thereafter the district
school tax collected in the aty shall be paid over to the custodian of
city school funds. and the distnct school tax colected rn lhe
contiguous temtory shall be paid over to the custodian of county
school funds . provided, that so much of tl'1e proceeds of the speetal
school tax colected in the origmal school ta, d1stnct as may be
required for ttie retirement of outstanding warrants issued agau,st
such ta,. including the interest thereon. shalt be paid over lo the
proper offtcial er authoritt to be useo for suet, purp:>se (Code of
Alabama 1975. Section 16-13-1 99).
Slide 13
Public School Laws of Alabama,
1911
1693. Inoorp orat ed cit ie, and town, ,eparate 1chool
diatnct, -Each in corporated city or town in the State
is a separate ochoo l districl
Slide 10
Page 3
§ 16-28-19. Attendance districts.
The county board of education shall arrange the
county, exclusive of cities, into one or more attendance
distncts, and said board shall appoint an attendance
officer for every district created, who shall hold his office
at the will of the county board of education, and the
board of education of each city having a city board of
education shall appoint one or more attendance officers
to serve at the pleasure of the appointing board. City and
county boards of education and county commissions
may 101ntly employ any person or persons to carry out
the provisions of this chapter and such additional duties
as may be assigned them by such boards or county
commissions (Code of Alabama 1975, Section 16-28-
19).
Slide 12
Note:
• § 16-13-199 refers to the creation of a new
city school system and control of property,
control and school tax revenues, and
assumption of specific debt.
• Note: special taxes collected levied and
collected for the repayment of debt shall
be paid to the proper authority for
payment.
Slide 14
13 September 2010
Page4
Page9
§ 16-8-20. Annexing to city territory embracing schools•
Retention of control pending agreements.
When any part of lh e territory embraong a schoo l under the
supeMsion and control of the county board of education is
annexed lo a city having a city board of education by extension of
the corporate l1m1ls of such city , the county board of educat ion
shall reta in supervision and contro l of said school and for school
purposes shall retain the same control of the terntory and
revenues which it exercised prior to such annexaliOn , ror the
purpose of using and devoting sa id school lo the benefit of all
ch il dren who were or wou ld be enlil!ed lo the use and benefit of
the school so long as 11 was a county school. unt l an agreement
has been made between the county board of education and the
city board of educat ion, and the city counc il or commission or
~~.,";,i~v~~~;~etr~n: l~e i~Y ~~1:i~1 ~~~1\~ril~ie~f~ness
and of providing the same or equi valent school~acilites for the
ch ildren 1n that part of the lemlory in the schoo l district or d1slncts
not annexed or made a part of such city (Code of Alabama 1975,
Section 16-8-20).
Slide 15
Page6
§ 16-13-195. School tax district-Consolidation -City district with
other territory.
When ii shall seem desirable to consolidate with a city school tax distrid
having a city board of education, either a county school lak district or
~~ri~~~fe~~i~~ ir:e ~try~!~ }6xv~~111~! ~~to1~r:;~:o:tin
matters of such proposed consolidated school tax district In said city board
of education. the county board of e~catim and cily board of education
shall agree upon the tenns of consokdation and concurrentty request the
county commisslOO to call an election in al the territory proposed to be
~~~ta,:~!~ ~~r;~l~!l~~Jt ~f~~:!~ci~~t~~:~0~e city
~~~:d~~::~~hin:~~~~~:i~r:~ ~1::~1~~~nJ:~:~flo
such city . and whether or not a specia l lax for a un~orm rate and time shall
be voted for such proposed school ta• district. In the event of such
consolidation. lhe rate and time of the three-mill district tax, if levied, shall
be for such time as prescribed in the agreement between the boards;
provided . that the rate and time shall no t be less than the mallimum rale
~n::d~~~r(C~~":,1 x:a~m~~:'~~~~~eti~l ~n~)~ed
01
said
Slide 17
Page9
§ 16-8-20. Annexing to city territory embracing schools•
Retention of control pending agreements .
When any part ot lhe territory embracing a school under the
supervis ion an d con~.ol of th_e county board of education 1s
annexed to a city having a city board of education by extension
of the corporate il m1ls ol such city , the county board of educat ion
shall retain supervision and control of sa ,d schoo l and for school
purposes shall reta ,n the same contro l of the territory and
re\tenues wh ich it exercised prior to such annexation , for the
purpose of us ing and devoting said school lo the benef it of all
chi ldren who were or would be entitled lo the use and benefit of
the school so long as ii was a county school , until an agreement
has been made between !h e county board of educat ion and the
city board of education, and the city council or commiss ion or
other governing body of the city lo which the temtory was
annexed . with reference to the matter of ex ist ing in_~ebtedness
and of providing the same or equivalent school facilities for th e
chi ldren in Iha! part of the territory ,n the school district or
dislncts not annexed. or made a part of such city (Code of
Alabama 1975, Section 16-8-20)
Slide 19
Note:
• § 16-8-20 to the annexation action of a city
council for whom there is a city board of
education and when a school site is in the
annexed territory.
• When this occurs , the county board of
education retains control until an
agreement is reached for provision of
equivalent school facilities for the school
children of the district or districts not
included in the annexation.
Slide 16
Page 6
§ Section 16-13-196. School tax district. Consolidation.
Effect
Thereupon the county commission shall call an election in like
manner as already prescnbed for calling an election in a school
tax district in tho special distncls or district and adJacenl territory
proposed to be consolida ted, and 11 a majority of the qualifie d
electors voling in the combined terrilories of the districts or district
and adjacent lerritory proposed to be consolidated shall vole
favorably . the dislncls or dislnct and adjacent territory shall be
consolidated into a new special school lax distri.cl . and the tax as
voled shall be levied and collected in the new district as a unit. but
the creation of a new district shall not operate lo relieve the county
board of educatio n of liability for the jusl obligations made pnor to
such consolidatio n. In the event a ma1only of the qualified electo rs
voting in the comb ined territories of the districts or distnct and
adJa cenl terri tory proposed to be conso lidated shall vote against
the proposed consolidation , said consolidation shall not be made
and_ each district shall remain as before with the same taxing
privileges (Code of Alabama 1975, Section 16-13-196).
Slide 18
Page 13
2. THE DEMOGRAPHICS AND
GOVERNMENTAL CHARACTERISTICS
OF THE CITY OF FAIRHOPE, ALABAMA
Slide 20
13 September 2010
Page 5
Slide 21
Slide 23
Slide 25
Slide 22
Slide 24
Page 37
Table 2-22
Slide 26
13 September 2010
Page 6
Slide 27
I
Page 39
Ta ble 2-25
811dw .. CountySchoolS1sltm
1000000"1,,
FisnlYu, To!V •••
Slide 29
Page 41
Tab le 2-27
SchoolS•1soffo11rllop1
l1Al84..,_
Total AOL1 P11ADU
School Ad Valorem Taxes Levied and Collec ted In Ba ldw in County
Slide 31
Page 118
Table S-27
Deb t To Be Assumed on School Sites In Fa irhope from the
2007 Ba ldw ln Count Board of Edu cat ion Revenue Anlic l atlon Warrant Iss ue
Slide 28
F.rfflOpeK-1 School
New f alrhoptiEltman'-Jkhool
Nt wftlmoptlnlwmtdlett~
F.imo111 NlddltSd'lool
FalfflOpe H'9hkhoal~
PORPOSfrl NJ VALOIIEIII TAX
ITAT[:
MU:ICHOOt.FUlll .....
""""""'"
""""""'" -·-flt£"9!0TtCTION ..... .,,
S 1,100
S 1,W ,K4
$1 1,"'4,UI
$22,125,311
$5,7 11,71 5
u
u
u
u
u
u
HOlfflAl..{)IOATH,ARTOfCOUlfl"YON..'I') U
TOTAI.COUlflY -ITN'LETOIIHO«TH' II
TOTAi. COUNTY -SOIJTll U
""""" COUHTYWl>E U
laTIUCTI -COONfY
O.TIUCT J -COUNTY
TOTAi.SCHOOi.
""""'' """'"'
GAAIC)lOTAL
1 10 PEIIACRE/STA.JFNCE1T~TAll'
'SI tlclttldHo'flo/~fll
Slide 30
Page 41
Const1tut1onal
u
!!
Mills Autho ntabon Implementation Statutes
5.0 for Qfll'lefJI purposes :
ore.flll~on.jW0tnUTI
Slide 32
Sectioo21 6;11so authcrizes
certail cities to ll!lvy men None. No election required.
than 5.0mls.
None. Election requ ir ed .
13 September 2010
Page 7
Sli de 33
Page 44 -Note Temporary One
Cent Sales Tax Included
Table2.JO
Baldwin Coun Sa les/Use Taxes levied and Collected
Sli de 35
Page 46
Table 2-33
Sli de 37
Tabie2-29
Stat, Salts/Use Tues levied and Collected In the Citv of Fai........,.,.
" , ... ,,.:
USE AUTO 2.00%
USE FARM 1.50%
USE GENERAL 4.00%
US E MFG. MACHINE 1.50%
SAL ES TAX AUTO 2.00%
SAL ES TAX FARM 1.SO'JI
SAL ES TAX GENERAL 4.~
SAL ES TAX MFG . MACH INE 1.50',I
SALES TAX VENDING (FOOD PRODUC TS) 3.00%
SAL ES TAX VEND ING IALL OTH ER ! 4.00%
SELLER S USE AUTO 2.00%
SELLERS USE FARM 1.50%
SEL LE RS USE GENERAL 4.00%
SELLERS USE MFG. MACH INE 1.50%
Slide 34
Slide 36
Page 49
3. STATE FUNDING OF PUBLIC
SCHOOLS IN ALABAMA
Slide 38
13 September 2010
Page 8
Page 49
SOURCES OF STATE FUNDING FOR PUBLIC
SCHOOLS IN ALABAMA
• (1) 1995 Foundation Program allocations from the
ETF;
• (2) 1995 Capital Purchase Program allocations from
thePSF;
, • (3) Categorical Aid allocations from the ETF; and
• (4) State Department of Education allocations from the
ETF
Slide 39
Slide 41
Page 58
Local Tax-Based Revenues
Equivalent MIils =
Yield of 1.0 Mill of School District Ta x
• Equivalent Mills is a measure of tax effort.
Local taxes earmarked for debt service or
capital outlay are not included by SDE.
Slide 43
Slide 40
Page 58
Ten Mills of School District Tax or Its Tax-Based Equivalent
✓ The requirement of lhe Slate of Alabama that 7 .0 mills of local
property tax must be levied and collected was repealed m
1980 and replaced with the current requirement of the
equivalent of 10.0 mills of school district ad valorem tax from
any tax based source.
✓ In 1969, the Legisla1ure authonzed through general legislation
the levy and collection of the franchise, excise. and privilege
license taxes for local school funding purposes (Sections 40•
12-4, 11-51-90,and 11-51-200).
✓ These could be levied by resolution of the county commission
or the city council. Local school systems could meet their
required local taxation minimums from any tax-based revenue
source. Currently, local tax effort for the purpose of
accountability is measured 1n terms of the number of
equivalent mills reported by the following formula:
Slide 42
Page 58
Amendment 778, Approved November 7, 2006
• Prior to the approval by the voters of the state on
November 7, 2006, of the constitutional amendment
entitled "Proposing an amendment to the
Constitution of Alabama 1901 to provide for a
statewide minimum levy and collection, commencing
with the tax year beginning October 1, 2006, and
without limit as to time, of 10.0 mills of ad valorem
property tax in each school district in the State, there
was no statutory requirement for any specific type of
taxation to be levied and collected by local boards of
education in order to participate in the Foundation
Program of 1995. Any requirement for ad valorem
tax had been repealed by the Legislature in 1980.
Slide 44
13 Septemb er 2 01 0
Page 9
Will Baldwin County School Tax
Millages Expire?
, Five mill countywide tax is permanent.
, Tax District 1 only has 10.0 total mills.
, Tax District 2 can only drop to 10.0 total
mills if renewal votes are unfavorable .
, Failed countywide taxes by Amendment
778 would be replaced with District Tax
Millages.
,. !mplic;itiuns'i 5. 0 ,rnils counlyw1dc rallicr
tl1an 9.0 mills countywide?
Sli d e 4 5
Flowchart of Guaran teed Tax Yield Program ·------------------------------------------------------, ' ' : (•I 1-l ftl l•I :
: '
:LJ --.--· :c .q _ _.·_·· ___ ·_·· __________________________________ :
1··-----------. --. --. -----------1 ,.. . .. , .... -. -~ • ·-. '~.
: 11
'
Slide 47
Page 64
8. STATE CATEGORICAL AID
PROGRAMS
• Student Transportation Program
Slid e 49
A. Operations
B. Fleet Renewal -May be used for
any purpose by flexibility
granted by statute for FY 10
and FY 11.
Page 61
8. STATE CATEGORICAL AID
PROGRAMS
Slide 46
Capital Purchase Allocation
From Public School Fund
Page 62
State Share from Public School Fund
= Z [(KM)-Y] A
where
z = number of guaranteed mills
K = 2
M = maximum yield per mill over all
local boards
y = yield per mill per ADA for a local
board of education
A = prior year ADM for a local board
of education
May bo used for any purpose by flo11ibilily granted for FY 10 and FY 11 unless
pledged for debt service.
Slide 48
Page 65
• C. LINE ITEM APPROPRIATIONS FOR
LOCAL BOARDS OF EDUCATION
Slide 50
13 September 2010
Page 10
Page 67
Tablt3~
Una Item Appropriations for FY 2009 -2010 to
Loca l Boards of Edu cation with StaM Authorization
4 004369
33 527343
250 000
Slide 51
Page 69
4. BALDWIN COUNTY SCHOOL
SYSTEM TAXES FOR PUBLIC SCHOOLS
Slide 53
General Statewide Constitut ional
Authorizations for School Ad Valorem Taxes -AuthorizaUon Rate Type ofTax lniU ation
Procedure
Constitution 1.D COllnlyw'de Pelilion ol 200 qualified
S1ction269 voters
Amtndmentl, 3.0 COllnlyw'de Petition of 200 qualified
Section 1 vol.-.
Amendment l , 3.0 School District Resolution of School
Section 2 Boa<d
Amendment202 5.0 Coonlyw'de Resolution of School
Boa<d
Amendment 382 3.0 School District Resolution of School
Boa<d
Nole:Seclm269fequim1l'Smajctt)'kll~wllillalelhetlrequte1timple
maj0rtydtaeV0Cin9. UpNoYember21ofC0111liionllamendrf'e11110CNnge101rn~
rn.,rty.
Slide 55
■ .
2016 -2017
2015-2016
2015-2016
Unused
Unused
Sta• _,U-..11D«
Slide 52
·--, .. -lC....ltdl.Wil ...
4 Oti.,.1Eyo5aH'q
5 CHct..-Wlbpll,ilEdoliDn!ISona1
fl»staoal .... -ACCESS
1 ~0JIPIIII~
IErvw,■1Smn!Lq.aga -~~,,..,.
10Go¥llra'ltti,lltop.bStJdlnll
11 HrffllNtldllnlaf,...llff'rlldloaln
12.kti•b~~
13Ml~Mtni:fogJ~
14 ~8d.,.._Tdl.Sldl.
1SO&WCHct.ifnl~
11PJGfASF'Pnp!I
11~~ ,.~~ ...
II SOal~Rlpc,1c.d
2DSoruillilob!
School Ad Valorem Taxes -All
Governed by General Statute
Genera l Statewi de Constitutional
Authorizations for Schoo l Ad Valorem Taxes
Autho rization Rate In Type o!Tax Referendum Initiation
Mills Procedure
Con stitution S.Ctlon 289 1,0 Countywlde Pttltktn of 200 quaiflad votffl
AmtrMlmtnt 3, Stctlon 1 3.0 Countywlde Petition ol 200 qu.u.d vot.n
"1Mndmtnt3, Stctlon 2 3.0 Sdloot 01ttr1ct RMOlutloo of School Boonl
lAm.ncfm.nl202 5.0 Countywldt Resolution of School Board
Amtndment3a2 3.0 School Diltr1ct Rffoludon of School 8oanl
Molt: s«:tion269rtQUm 1 l'Slll.;:rkybapp!V'.llwhN al oll'ltfs,._11ifflpll~dllOM'fClli,g. U.,
Jrbember 2 br ~ am.ndtn9111 lo c:fllr'9' lo simple ll'lljl)tty.
Slide 54
Page 74
Special Five Mill Countywide
Ad Valorem Tax, 1961
On December 5, 1961, the voters of the
state of Alabama , and the voters of
Baldwin County , approved a constitutional
amendment levying an additional five mill
countywide tax for schools in Baldwin
County not sub' ect to renewal.
Slide 56
13 September 2010
Page 11
Page 80
Apportionment of
Countywide Taxes for Schools
to the Respective School Systems
of the County
Slide 57
Statutory Origin of Countywide
Foundation Program Cost Ratio.
Slide 59
Baldw in Coun
Rtwnut
c""' ...
8010 Counl)'RegiAa"AdVllof1m•4 .0Mill
11032 Counl)'Sp«;ia1Ad\lllorem•5.0Mill
8)96 COl.ntt&wNuPrtriege TH
6110 Cooot)'S..Tu•lcanl
6110 CountySalll TH•0.55c«1II
6140 CountyAlcohoicBeverageTu
8170 Mhnt.-Ooame,uy
61!KJ 00.CcultyTax
6210 Regular Dilh1 Ad \llkffm
8370 HtlpllgSdlCIOk\llhldeTaga
5JSO 1.1..tnndHomelReg.FH
TOTAL
Slide 61
$11,1166,232 S
$20,832,0311 S
S 1.0S5.000 S
SJe,060,000 S
$ $ 12,l!00,000 12,!KI0,000
S 350.000 S 350,000
S 2,000 S 2,000
S 75.000 S 75,000
S 12.5111,428 S 12,518,428
S 50.000 S S 50JXX:1
I JOOXl_S ___ -~
S 17,&ll,H7 S 12,800,000 S 100,tll,H7
Page 80
§ 16-13-31. Record of receipts and disbursements;
apportionment of county-wide taxes for Foundation
Program .
(b) The tax collector/revenue commissioner of each county
shall apportion county-wide taxes collected for the
purposes of participating in the Foundation Program to
each local board of education in the county on the basis
of the total calculated costs of the Foundation Program
for those local boards of education within the county.
The total calculated costs of the Foundation Program for
each local board of education shall be the sum of state
funds received from the Foundation Program and the
amount of local effort required pursuant to paragraph a.
of subdivision (3) of subsection (b) of Section 16-13-231.
Slide 58
Page 81
• This general state law applies to all
countywide taxes levied and collected for
public schools:
-ad valorem taxes and excise, franchise , and
privilege license taxes .
Slide 60
Slide 62
13 September 2010
Page 12
Calculation of the Chargeback for
Baldwin County School System
Current Yield per Mill Chargeback
Fiscal Year ADM Used Used Used
n/a $1 699 ,457
■ 2000-2001 22 ,598 .51 $1 ,850 ,805 n/a
2001-2002 23 ,087 .02 $1 ,962 ,115 $16,994 ,570
2002-2003 23 ,414 .12 $2 ,155,209 $18,508,050
2003 -2004 23 977.9 1 $2,409 ,759 $19 ,621 ,150
2004-2005 24 ,657 .25 $2466 412 $21,552 ,090
2005-2006 25 825 .20 $2 ,931 ,421 $24 ,097 ,590
2006-2007 26 ,037 .40 $3 723 640 $24,664120
2007-2008 26 323 .05 $4 5,13 ,147 $29 ,314 ,210
2008-2009 26 735 .95 $4,383 ,047 $37 236 400
2009-2010 27 445 .40 n/a $45,431,470
$43 ,830,470
Slide 63
Page 94
5. FINANCING THE PROPOSED
FAIRHOPE CITY SCHOOL SYSTEM
Slide 65
Slide 67
Chargeback: Local tax resources expended locally
fo r purposes denned by 1995 Foundation Program
Slide 64
Slide 66
Slide 6 8
13 September 2010
Page 13
Page 102
Table 5-9
Proposed Baldwi n Cou ntvwld e Foundation Proaram Cost Ra tio for 2009-20 10
P«unlof
Total Baldwin
Sdlool Svsttm Amol.lnt County'
fllrhopt FO!JndltlonProgram S 11,UG,3 13 1.49441 0'11
Ntt Baldwin County FourKlatlon Program l..J.1!J!lill ~
Coun-.t.L.Totar S 1lUI041S 100-
'Hott: ~ foelldM,on Program Cod RIJtio ii Md! sdtod systa,n 's
N'lo/,,.lollllculdtWflp,og,wncoltlo/.,lllsdtodsysttmsdlhe
autlylrtd11calaMHda,wiatybyl'NSIM~o/EductiJonby
"""'·
Slide 69
Slide 71
Page 104
Tabl e 5-13
Summary of Required State Matches
for th e Proposed Fairhope City School System
SateAldPmnram
1tt5foundatlo,iProg,am
1tt5 Capital Plll'diaM Alloutlon ,. __ _,,._kMTotll
Slide 73
B~ed Propowd Net Rnldial
Baldn! County Falmop. City 8aWwllt
SdlOOl s ~•--khoo!S111,te Countv
$ 45,,131,470 $ l,412,2,41 $41,Mt,224
L....lJll.lH L.__Jnlll l...1.lllJ2l
S Ul<cM I I 1113 572 S 05I01l2
Page 103
B. PROPOSED FAIRHOPE
CITY SCHOOL SYSTEM
LOCAL TAX REVENUES, FY 2009-2010
Slide 70
I
'
Page 104
Tab lt 5-12
Calculatio n of Local Tax Revenu es Per Stude nt fOf' FY 2009 -2010
Slide 72
Slide 74
h bk5-II
&tlm111d f oundlltlon Program i nd 01hw Stitt Nioutlons
lo,the Propo1 1dFtl~~)'IW1111orFY2000-:N11
13 September 2010
Page 14
Page 110
§ 16-24-2 Criteria for continuing service status
for teachers, principals and supervisors; list
of persons recommended for continuing
status; effect of consolidation or separation
of schools.
(d) When two or more school systems are
consolidated under one board of education , or
when one or more schools are separated from a
school system in order to become a part of or to
constitute another school system, the continuing
service status of the teachers involved in such
changes is in no way jeopardized ( Code of
Alabama 1975, Section 16-24-2).
Slide 75
Slide 77
Slide 79
Page 116
E. PROPOSED FAIRHOPE
CITY SCHOOL SYSTEM TOTAL
REVENUES, FY 2009-2010
Page 110
Tablo 5-20
Slide 76
Page 114
Table 5-24
Assumption of Debt Service and
Availab le Revenues Dedicated for Debi Service for FY 2009-2010
DEBT TO BE ASSUMED :
Annual Debt from 2007 Warrant Issue
REVENUES RESTRICTED TO DEBT SERVICE
S (2,685,648 .00
Slide 78
si. kvdlliDn..., OU. l.n lllrnl -·-Caplll~Aloc:ali)n
O..Slaie~
TotalSl.1t1Souru1
2. FEDEAAI. SOURCES· lncludt1 AA.RA
l.LOCAl.SOORCE.S
Loan-
Localfoods«wicalncoml
LocalSd'Od~At.outl ------4. OTitER AN.AHCINO SOURCES
TOTAL ALL SOURCES
Slide 80
,.,. ,.,. 1,071,1)1 "' "' "' 0 "' "' "' ,11.1111 "' "' "' ~ "' S111 ,l01 ,170 S 4,162.98 1,li5.123S l,IOlJO
S l&08'l.1124 S 1,424.78$ 1,m,on s 1,424.71
S 100,1111,1187 S l ,TTU1 S 11'71,2-411 S J,720,11
s ,,OJt .m s 150.ao s Ul,m s uo.ao
S 5.115.930 S 216.04 S ,,u,,.., S 985..M
s 1.213,m s ,1.00 s 111,0&2 s suo
S 1,520,2111 S 56.16 S • S s s,amain L_l!1!! L____: ~
7 9S5 10053.'6 224401l1 tMUI
13 September 2010
Page 15
Page 118
Table5-27
Debt To 81 Assumed on Sc~ Situ In Faifflope from th•
2007 Baldwin Coun Board of Eduea Uon Rt venut Antk:I atlon Warrant Issue
Slide 81
SchoolSill
FHt,optK-1 School
New flirhopt Et.mtntary School
New Fairhope lnttrnwdl1t1 S~
FuhoptlllddMSchool
FalmoptHlghSchoolWing ,~.
S 1,600
S 1,663,964
111 ,564,131
122,125,369
1s1111,71s
S41 ,171,7Mi
Baldwin County Board of Education
Alabama Public School
and College Authority
Allocation from 2007 Bond Issue
$18,817 .603.26
Slide 83
Key to Financial Success is
Amount of Unrestricted Local Tax
Revenues
• Only these local tax-based revenues are
truly available for local board control.
• Other revenues which are restricted -
most by object of expenditure -are not
subject to local board control.
Slide 85
Sources of Funding for Capital
Outlay
• Pay as you go with local revenues
• Revenue Warrant Issues by local boards
• Pay as you go by county commissions
and/or city councils
• Revenue Warrant and/or bond issues by
county commissions and/or city councils
• State Revenue Bond Issues (APSCA)
• Capital Purchase Program through PSF
Slide 82
3 la1R..-.:119915FOIM'dml~Localr..:tl
4 la1Rmlclldli95Capu1PwcfaeM:x:alD'llocll~
5 H9I UnrfltrktN Local Tu Rn.nun
UP!:HOIT\lft!S:
~~do.llls.vi:a
atMl~llll6SWIClfi.llPllttllstAIDcllioll
I c...ltbtlll5beapilalPIKMNMlcltalL.ocalMlldl
I Blld.t!CGll'lfy $0.55S..Tu
Ntl ll9Cjund0ebl Semce bpw,ditun
11 Eimueo.t kw Gen.Ill Admnlll'Dt Serke1
12 Eu•tColllOfloeal TMCnll'Unib
1 12,685,5411(1,111.43
I 411 ,0il I 180.37
S JOl,321 I 132.2'2
~1 .m.oe
S 1895.1 I (311.75
I (800,CXXI I (361 .03
1171 ~
IW.ANCll!UNlll!STIIICTEDI.OCAL TAXIUWOfUUfORGENEAALPURPOSU I 1142 11$ I 501 .51
Nola: 8uncl ■MmSlnsilams10,11 ,Wld12
Slide 84
'
I
Page 121
Tab le S-30
Unrestricted local Taxes for FY 2009·2010 Based on State Mandates
Baldw in County Propose d
Category School System ;c~:~:~t~~
Local Tax-Based Reven ues
Less 1995 Founda!lon Program Ma th
Less 1995 Capital Pt.rchase Alocatlon Match
Net Urns~ed Local Tax Revenues
ADM
S 100,436,697 S 8 ,◄78,2◄6
S (4 5,431 ,◄70) S {J.◄82.246)
S (3,932 ,◄34) S ~
S 51 ,072,793 S 4 ,894,87◄
26 .7 35 .95 2,279 .00
Slide 86
13 September 2010
Page 16
Slide 87
Page 123
On the basis of the increased debt load percentage wise of
the budget that the proposed Fairhope City School System
would assume on a per student basis (generally the input
variable for federal, stale and local funding), it is
recommended that the per student additional cost be
funded through additional local taxation or other revenue
means. This would amount , for FY 2009-2010, to around
$1,850,000. It is further recommended that as costs for
General Administrative Services as a percentage of a
smaller budget for the proposed Fairhope City School
System will be proportionately greater than for the Baldwin
County School Sys tem , additional resources annually in
the amount of $150,000 be provided through additional
local revenues . This means that approximately
$2,000,000 should be provided through additional local
resources
Slide 89
Revenue Sources:
• City Council Appropriation from Existing
Taxes;
• Non Taxed Based Revenues (Foundation)
• Tax Increases:
-AdValorem
• Authority under Amendment 373
• Other?
-Excise, Franchise, Privilege License Taxes
• Aulhonly Currently Granted City Council
Slide 91
Slide 88
Assumptions for this Estimate:
• Excess debt is a new cost: $1,190.000
• General Administrative Services -Central Office -
is a new cost: $660 ,000
• To Adjust for Inefficiency in General Administrative
Services add additional new cost: $150,000
• Total: $2,000,000
-locked in Stone? No .
-Could there be offsets based upon spending pattern of
the Baldwin County Board of Education ? Yes.
-Is there a good chance of new flex ible spending dollars
from the State: No.
Slide 90
Page 124
The Amendment 373 process consists of the following
steps :
• (a) Public Hearing. The local taxing authority (the
city council) conducts a public hearing on the
proposed tax increase at which the local taxing
authority formally votes to propose the increase. The
approved request is given to the local legislative
delegation for submission as a local act to the
legislature.
• (b) Local Legislation. The legislature approves the
proposed increase through the passage of a local act:
and
• (c) Local Referendum. Voters approve the
proposed increase in a local election .
Slide 92
13 September 2010
Page 17
"There is no such thing as a
free lunch ."
• Nobel-prize winning Chicago-school
economist Milton Friedman
Slide 93
Slide 95
ETF FINANCIAL OUTLOOK
FOR FY 2012
• ETF has budget one-time revenues for
FY 2011 which will not be available in FY
2012;
• Financial liability of Teachers '
Retirement System (TRS) for future
years has been increased (30 year
accounting period from 20 years)
• ETF subsidy for PEEHIP has been
maintained level for 3 fiscal years by
borrowing from reserve and postponing
liability ;
Slide 97
Slide 94
ETF FINANCIAL OUTLOOK
FOR FY 2012
• Alabama has budgeted one-time federal
funds ending in FY 2011 for continuing
education costs ($ 0.5 billion in ETF for
FY 2011 plus $149 million in jobs money);
• ETF has borrowed $437 million from ETF
RDA for FY 2008 and must be repaid by
FY 2014 ;
• ETF has issued APSCA bonds to pay for
transportation fleet renewal annual
allocations to local boards ;
Slide 96
ETF FINANCIAL OUTLOOK
F0R Y 2012
• Flexibility granted for local boards to use
capital outlay allocations for personnel
costs will expire .
• Proration is again warned for FY 2011.
• Many local boards have exhausted
reserve fund.
• Many local boards have borrowed for FY
2010 .
• County boards of education are hardest
hit financially.
Slide 9 8
13 September 2010
Page 18
Slide 99
OPTIONS?
• Increase state and/or local taxes;
• Decrease funding from ETF:
-1995 Foundati on Program
-Categoncal Aid Programs
-Line Items to SOE
• Decreased Revenues coupled with
Increased Costs could aggregate from
S450 million to $650 million .
Slide 100
Exited Meeting at 6:00 p.m. for City Council Meeting.
We returned to the School Feasibility Study Advisory Committee Meeting at 7:00 p.m.
for Dr. Harvey to answer questions.
1) Considering the devastating financial challenges ahead for 2011-2012 , how close are
Baldwin County Schools to losing accreditation and what would that mean?
Increase revenues and decrease expenses. Repeal Amendment 225 and sales tax
reciprocity.
2) With the 2.0 million extra in funding, is that status quo? Or will that be a better City
school system than the current system?
This would be status quo not worse, possibly it could be better. .. depends on economy.
3) County or City system, why would we not annex J. Larry Newton now anyway?
The County would have to want it annexed.
4) When would we be ready to vote for this matter?
The City Council does not have to allow for a referendum. The City would not be
allowed to pay for the election. We would have to find the funds.
13 September 2010
Page 19
5) What millage rate would it take to have a strong school system?
You would probably have to double your millage to have a system in the top 20 , but this
would be at the bottom of the 20 .
6) How is "Twin Beech" property affected in an annexation?
We have to go to the State Legislature to ask for a vote. All schools are in the City limits
except J. Larry Newton. Unless it becomes a part of the City , it does not become part of
the school system. It is best to annex the school before forming the school board and
system. The feeder pattern would have to be negotiated with the Baldwin County School
System. The Baldwin County Board of Education must be willing to negotiate.
After separation, the Fairhope School Board would meet with the County Board and
negotiate; take to the County Commission to authorize the vote and this may take another
year after seperation.
7) Who has the authority to tax that district?
Everyone in the district can vote and single majority wins.
8) We have 35 to 40 percent who are retirees in the City and on a fixed income. Were
your figures from per capita income?
Dr. Harvey replied yes; and then mentioned that the retirees have some sort of a county
property tax exemption.
There being no further business to come before the School Feasibility Study Advisory
Committee, the meeting was duly adjourned at 7:25 p.m.
~,,__ __ _,,