Who should refinance Opp bonds?

Published 12:48 am Wednesday, January 20, 2016


Mayor, super disagree; council split

A recommendation from Opp Mayor John Bartholomew to the city council to solicit prices in the bond market turned heated at Tuesday night’s council meeting.

Bartholomew wants to refinance the general obligation warrants from the 2007 bond issue that are directly linked to the construction of the new Opp Elementary School, and use an estimated $700,000 to $800,000 to fund city projects.


Star-News archives show that the $10.24 million bond issue undertaken in 2007 by the city of Opp, also included money for capital improvement projects. Together, the city and the BOE were able to obtain a AAA credit rating, almost unheard of for a school board, for the bond issue.

The city later implemented a 1-cent sales tax which is being used to pay the debt service on the elementary school, which opened in 2009. If the 1-cent sales tax doesn’t generate enough money to make the bond payment, the school system uses some of the money it receives from a 4-mill property tax to make up the difference.

Bartholomew told council members the additional funds from refinancing the bond issue would be used to make improvements to Channell-Lee Stadium, the Opp Public Library, Opp Fire Department and Hardin Street Community Center.

Bartholomew said that the awning at the stadium is in very bad shape; the fire department is in disarray, the library is leaking horribly, and that the Hardin Street Community Center bathrooms haven’t been updated in years.

Bartholomew said he met with Opp City Schools Superintendent Michael Smithart about the possible refinance last week.

Smithart, who was present at Tuesday night’s meeting, said he would not pledge the county 4-mill tax that is currently obligated in any new finance agreement.

“I wouldn’t recommend it to the (school) board,” he said. “The 1-cent sales tax is still there.”

Bartholomew said he asked if the school system wanted to split the funds gained from a refinance, but Smithart declined.

Bartholomew said the school system’s responsibility for the payment and payoff would remain the same as always.

Currently, the system is set to pay off OES in 2037. Bartholomew said a new bond issue also would be structured to pay off in 2037.

“We can still do this, “ Bartholomew said about not having the 4 mill tax backing. “We can pay the bond. The 4 mills is a nice cushion.”

Smithart said it was the system’s contention that spirit of the bonds that the portion for the elementary school was for the schools and should be used for the schools.

Bartholomew interjected that wasn’t the case.

“That was the intention and that’s what I believe it should be,” Smithart said. “For the sake of being honest, we make the payment. Yes, it’s tax money, but we make the payment.”

Smithart said that since 2009, the system has used $300,000 to supplement the 1-cent sales tax to meet the financial obligation for the elementary school debt.

Star-News archives show that the school system was obligated to a $600,000 per-year payment for the school.

“My spirit of it is we have fulfilled it to build the school,” Bartholomew told council members. “It’s your choice. It’s on your shoulders. That’s why the people elected you.”

Councilmember T.D. Morgan said he wouldn’t support the bond issue.

Councilwoman Mary Brundidge asked if the system would be defaulting by not offering up their 4-mills.

“Their obligation is gone,” Bartholomew said.

Since the funding agreement was set for the 2007 bonds, a 2016 bond issue would free the system from their 4 mills, Bartholomew said.

Bartholomew said he told the school officials that he would pledge any left over money to help upgrade the gym locker room.

“A lot of money is going to go into fixing that stadium,” he said.

The city, not the school system, owns Channell-Lee Stadium.

Morgan wanted to know why they couldn’t use the money to pay off the 2007 debt.

“You could, but all these projects won’t be done,” Bartholomew said.

After the meeting, Morgan said he couldn’t see talking money away from kids to give to city projects.

Bartholomew said after the meeting that he wasn’t against the schools.

“The school system wanted to do the bond themselves, but they wouldn’t get as much money, and they can’t give us any money,” he said.

Smithart said after the meeting, “We are the only city in America that has an ordinance that takes money way from schools.”

Bartholomew introduced the ordinance authorizing the proposed bonds, but unless there is unanimous approval, an ordinance cannot be adopted on its first reading.

There is a special called meeting of the council at 10 a.m. Thursday, at which time the ordinance could be approved.