ARTICLE TOOLS
Cleveland cautioned on 'creative financing'
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| Bambi Hines | |
CLEVELAND, Tenn. — The Cleveland City Council and City School Board agree they want to build a Cleveland High School science wing.
Finding the estimated $5 million to $6 million to pay for it is the challenge.
The council asked Finance Director Michael Keith on April 28 to look for “creative financing.” On Monday, the council got the staff recommendation: It’s not a good idea.
“Financing is not the hard part. Paying it back is the hard part,” Mr. Keith said.
City school board members and two county commissioners were present for the discussion.
City policy requires the City Council to say how it will repay any money it borrows, and it says school construction not covered by state or county financing will be budgeted in the city’s debt service fund or repaid by the city school board, a memo by Mr. Keith stated.
The city loaned the school system $600,000 from the general fund last year and will give the airport authority up to $3.5 million between now and 2012, he said.
The city’s debt service fund is above its target of $1.3 million and is now at $2.8 million, Mr. Keith said, and it’s likely to remain at that level for 20 years. That won’t allow new debt, he said.
The general fund balance is $8.6 million, below the target of $9.5 million, according to the memo.
If Bradley County raises money to build a school, Cleveland by law will get a share. But nobody knows when that will be, council members said.
“We are pretty much tied to the county,” Councilman Richard Banks said. “And it’s a question of ‘when,’ not ‘if,’ they will build a new school.”
Mr. Banks suggested going ahead and budgeting for at least the beginning phases of the science wing.
“When you lose momentum, you lose focus,” Mr. Banks said.
Councilwoman Bambi Hines asked whether the city should vote in a 5-cent property tax increase that would last just one year. The city rate has stayed level for years and city leaders brag that Cleveland has the lowest city tax in the state for towns that have a complete K-12 school system.
“How long can we stay at $1.65?” Ms. Hines asked.
But Councilman Bill Estes cautioned against spending money without a reliable source of financing, and Councilman Bill May suggested putting the science wing on hold until the city knows what the county is going to do.
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