Enterprise Mayor Kenneth Boswell refuted allegations during a July 2 Enterprise City Council meeting regarding the financial agreement between the city and school system that funded the construction of two schools.
Boswell said the claims are misleading citizens about the truth.
"To suggest that the city has profited by the school's building agreement is absolutely false," Boswell said. "There has not been one dime withheld by the city that belongs to the schools, not one dime."
Several former and current school officials have said the city is profiting from a half-cent sales tax and renewal of a 3.5 mill ad valorem tax passed to fund the construction of Enterprise High School and Hillcrest Elementary School. The city and school board also made an agreement that the school system would pay $550,000 annually to the city beginning in 2016 and ending in 2028 to pay off the bond issue.
The year 2016 was chosen for payment is because that is when the bond issue for the Enterprise Early Education Center would pay out.
"If in 2016 or thereafter the school would be somehow deprived of fully funding its education programs or teachers, then the city ought to take a second look," Boswell said.
The ad valorem tax renewal was passed by voters for "general purposes of the city of Enterprise, including but not limited to, construction of school facilities within the city," as said on the ballot.
Former Superintendent Aaron Milner said the tax was sold to the people as a way to pay for the new schools and not as an additional way to generate general funds.
(The tax was renewed to pay for EHS, but the excess from the bond payment has gone back into the city.)
Of the half-cent sales tax increase, the city would pay $2 million annually toward the bond issue. The city also agreed to pay $550,000 annually from funds received by the 3.5 mill ad valorem tax renewal. In 2016, the funds would be used to enhance its main infrastructure. The primary purpose of renewing the ad valorem tax was to avoid having to pass a 3/4-cent or higher sales tax.
In 2016, the school board would take over the $550,000 annual payment to the city for the remainder of the bond issue.
It was agreed that at the end of the 20-year bond issue, the half-cent sales tax passed would stay in place to sustain the growth of Enterprise with 85 percent going to the city and 15 percent going to the school system.
"Thankfully, the city has grown. But please understand the city took a large risk to help. We did not know what was going to happen then, and we sure don't know what is going to happen between now and 2016," Boswell said. "Sales tax collection and ad valorem taxes could have easily gone down and still could. I hope not, and we'll do everything we can to see that this doesn't happen. But remember, this was 2008 and times were uncertain. It was a big risk, but a risk the city thought was worth taking to help our schools."
Boswell said the city has worked hard during the past few years to grow the city.
"It is because of our growth that sales and property tax collections increase, and then more money goes to our schools to improve programs."
The agreement between the city and school board was discussed and agreed upon by a Citizen Study Committee comprised of seven residents including Whit Armstrong, Billy Cotter, Bill Carr, Walt Wilkerson, Mary Merritt, Lara Dicus and Steve Hicks.
It was all disclosed and agreed upon by both the city and school board in working sessions and public hearings where the public was invited to voice their opinions about the funding of the schools.
"All of this was debated and examined and examined again, including at several public meetings," Boswell said. "Some citizens agreed, some did not, but ultimately most everybody got on board for the good of the city and school system."
At the end of the committee's 11 recommendations for funding the two schools is a statement reading, "The committee wants to thank the city and school board for the assistance they have provided during this process. It is the feeling of the committee that the above recommendations once implemented will provide the necessary funds to construct the school facilities needed and also provide funds for the furtherance of the city of Enterprise and Enterprise City School Board."
Part of the agreement was that any extra funds received by the school board from the Federal Emergency Management Agency, insurance, federal, state, or other governmental sources that exceeded bid amounts necessary to build the schools would go toward the bond issue.
Boswell said, "The school system has received these additional funds, but to this date, the city has not asked for anything from the board of education."
"It's not yours and mine," said a tearful Boswell. "It's ours. We are Enterprise. We don't harm each other and I am certainly not going to let others mislead our citizens about the truth. If past history indicates anything, we will move forward, together."
During the July 2 council meeting, former Superintendent Jim Reese said the formation of the committee and those selected to serve on it was "slanted" toward the favor of the city, and the school board was under pressure to secure funding and begin construction on the new schools.
"I did not realize at the time, I found out that some of those members were adversaries, in my opinion, to the school system," Reese said. "I think they were trying to determine how little they could help us, how much can we keep from y'all rather than how much can we help y'all."
Reese said when the school and city were negotiating, he remembers the mayor slapping his hand on the table saying, "I want my $5 million" for the city of Enterprise.
"If you look at the numbers over the amortization period of the city of Enterprise bond issue, the city will profit a minimum of $25 million through the half-cent sales tax and 3.5 ad valorem tax. Should the city receive $550,000 from the board of education for 14 years, the city will profit in excess of $32 million," Reese said. "We can argue about the word 'profit.' I see that as the city profiting off the destruction of two schools."
Reese said, to him, the $550,000 payment was established as insurance in case the 3.5 mill tax renewal tax wasn't passed by the voters.
"I've lived here all my life and I'm not opposed to the city receiving funds," Reese said. "I want to see the city do well, too, but we have 6,500 students or more in our school system, and as superintendent of our education system, I was trying to look after them in 2007 and 2008."
The city has placed a number of documents, including minutes and newspaper clippings on its website, available for residents to read about the actions taken in 2008 regarding the financial agreement.
To locate these documents, visit www.cityofenterprise.net and look on the left hand side of the page.
Boswell said if anyone has doubts they can examine the records and minutes located on the website.
Check back with The Southeast Sun tomorrow for more on this meeting.