Dalton residents could be asked to authorize $75 million in school system borrowing
Published 12:15 pm Friday, June 16, 2017
DALTON, Ga. — Members of the Dalton City Council didn’t say no, but they definitely didn’t say yes when Dalton Public Schools officials asked for their help in borrowing $75 million Wednesday afternoon.
Board of Education Chairman Rick Fromm, then-superintendent Jim Hawkins and Chief Financial Officer Theresa Perry met with the city finance committee, which includes Mayor Dennis Mock and City Council members Gary Crews, Tate O’ Gwin and Denise Wood.
On Monday, school board members voted 3-2 (board members Steve Laird and Pablo Perez voted against) for a spending plan to borrow $25 million against the system’s share of Education Special Purpose Local Option Sales Tax (ESPLOST) collections. Voters approved a new ESPLOST in March, which is expected to generate about $29 million. About half of the $25 million would be used for roof repairs at Brookwood School and City Park School. The other half would be used to acquire land for a new sixth- and seventh-grade school.
Perry said the advantage of borrowing money to do the roof work is that the system could do it more quickly. She said the cost of financing the bonds that would be issued is expected to be 1.77 percent but the cost of those projects could increase 3 percent or so if the system has to wait.
The 6/7 school was not mentioned in the ballot referendum on the ESPLOST that voters approved. The money for land acquisition will be taken from projects that were on the ballot, primarily a gym expansion for Dalton High School.
O’Gwin asked why the 6/7 school wasn’t on the ballot measure.
“That’s a fair question,” said Hawkins, who has stepped down as superintendent but who is continuing with the school system through December 2018 in a role not yet defined. “When we went to the public, the high school was on it, and now we have learned things. We are further down the road to a long-term solution (to overcrowding at Dalton Middle School and Dalton High School), so we have had to adjust our priorities.”
The ballot measure did say that the money it raised could be used for “acquiring, constructing and equipping new school buildings and facilities including but not limited to educational/athletic facilities” and “acquiring any property necessary or desirable” for those new facilities.
School officials also want to borrow another $50 million, of which $36 million would be used to build the 6/7 school and the rest to pick up those projects that were slated to be funded from the ESPLOST that will not be funded if the system uses money to buy land for the 6/7 school. They said that at least part of that borrowing could be paid back with the proceeds from a future ESPLOST.
The school officials said they would like the city to issue bonds through the Dalton Building Authority, particularly for the $25 million to be borrowed against the March ESPLOST, and if the city officials are not willing to do that, to place a referendum on the November 2017 ballot or May 2018 ballot asking voters to authorize the borrowing.
The meeting ended with officials from both sides agreeing to communicate further and share information.
After the meeting, Mock said council members need more time and information before they can make a decision. But he indicated that if they did act it would not be to issue bonds through the building authority but to put the matter before the voters, both for the $25 million request and the $50 million proposal.
“That’s really something the voters need to decide,” he said.