Lakeland weighs immediate and delayed options for high school

CORRECTION: The original version of this article contained an error. There is an expiration date of 2021 to refinance Lakeland School System’s current middle school bond without tax implications. There is not an expiration date for the interlocal agreement between Lakeland School System and Arlington Community School (an agreement that allows Lakeland high school students to be educated in the ACS system). The error has been corrected in the story below.

Board members seated at the dais are, from left, Vice Mayor Josh Roman, Commissioner Wesley Wright, Mayor Mike Cunningham, Commissioner Richard Gonzales Jr., and Commissioner Michele Dial. Photo by Carolyn Bahm.

Lakeland, its school system and its residents have been at odds for many months on when or if to build its own public high school. At the Jan. 17 special-called city board meeting, two clear proposals emerged.

The city’s Board of Commissioners Vice Mayor Josh Roman laid out his arguments and a financial presentation for starting now on the high school project. He mentioned that Lakeland School System was willing to cover approximately $755,000 annually for the first four years from its reserves.

Mayor Mike Cunningham also took a clear stance in favor of the high school, but on a different timeline. For financial reasons, he advocates waiting until 2021, when there is an expiration date to refinance Lakeland Middle School’s bond without tax implications.

Cunningham also emphasized that there is no need to wait until 2021 to get started. If LSS does commit funding now for the next four years, that could be used to lay the groundwork for the high school until the bond is issued in 2012, and the bulk of the project could kick off.

He further proposed shelving all discussions of instituting a Lakeland Fire Department until the more urgent high school project is completed. Currently, the city’s fire services are handled by the Shelby County Fire Department, and people pay a fire fee annually.

“We have great fire service as it exists now, and I don’t see any reason to change that,” Cunningham said.

Shelby County Fire Chief Alvin D. Benson encouraged the board to make a decision soon on whether to delay or pursue its own fire department, because that would help his department’s planning and staffing decisions. He also advised Lakeland board members that it really takes three stations to become a self-sustained fire department.

Currently, all Lakeland School System students in grades 9-12 are educated in Arlington as spelled out in an interlocal agreement. Those students’ state funding goes to ACS to cover their educational costs.

For now, LSS includes one elementary school and one new middle school.

Roman’s presentation

  • He used a conservative $35 million estimated cost for building the high school. He listed:
  • $2,213,150, current school debt payment
  • $2,968,145, projected future payment of a 30-year bond
  • $754,995, payment difference (the amount affecting the city’s budget, covered by LSS for the first four years and then covered by the city starting in Year 5)

Roman’s presentation said if funds can be reallocated to cover the $754,995 gap then no tax increase is needed.

He also emphasized that his numbers assume the board locks in construction costs and interest rates at current levels.

According to Roman, the city’s fund balance is currently projected to end the year with $7,437,182 (assuming no reserve funds are used for a fire department). He said policy requires the city to keep about $3,732,855 on hand, meaning that $3,704,315 would be available for use. He proposes using some of that money to pay off three current debts, saving $417,654 in payments and leaving $5 million in reserves. Subtracting that $417,654 from $754,995 yields the amount of $337,341 that would still need to be covered by the city.

He said the different conceivably could be covered by sales tax increases, budget adjustments, increased housing, etc., starting with Year 5. His revenue projections included $200,000+ for Lakeland Commons, $180,000 from property tax on 150 new homes, $200,000 from the Lake District, and an as-yet-undisclosed revenue source that was referenced at the December meeting is expected to yield $300,000.

His presentation also discussed the city’s investment in road maintenance, details about a capital outlay note, proposed budget cuts and, depending on which variables are chosen, a potential tax increase up to a total of $1.83 (not including the annual fire fee, which is billed separately).

A few citizens also spoke up during the meeting. Afterward, in Lakeland discussion groups on Facebook, other citizens quickly picked through these financial statements and brought up questions and arrived at different conclusions.

The Jan. 17 meeting was a special-called one, so the Lakeland city board and mayor did not take a vote on the issues raised. Both the fire department and high school topics are expected to be on the agenda for the board’s Feb. 7 work session.