Comments prompt response

Published 10:20 am Thursday, March 22, 2012

JACKSON — The Northampton County Board of Commissioners has provided an “extreme clarification” to a comment about the county not supporting the construction of schools in the county.

On March 5, after the Northampton County Board of Education made a highly debated decision to ratify their previous vote to merge their two high schools, Board Chair Donald Johnson said the school board had been to the county commissioners for a bond referendum for the construction of a new, centrally located high school, but had been turned down.

“We can only do so much as a board because they (commissioners) handle the money,” he said. “We are trying to do everything we can in our power to get the commissioners to agree with what some of you have said tonight and that is: give us the money. If you go back and think of all the schools that has ever been built, the county has never furnished the money. They have had bond issues that the school board has had to pay back. The county by law is required to furnish the school system with the money. They haven’t done that. And we can’t put a gun to their head and force them to do it. We ask and if they refuse we have no other alternative. If we need money we go to mediation and that cost money too.”

At their Monday meeting, Commission Chair James Hester directed County Manager Wayne Jenkins to explain the county’s contributions to the school system.

Jenkins said North Carolina General Statutes require all counties to provide two sources of funds to local school systems: current expense and capital outlay.

“The Statutes also requires the county to provide buildings for our schools,” he said. “The Statutes do not tell the county what source of funds to take those funds from to pay that school’s debt.”

He continued by saying that in Northampton County, historically, the construction of a new school has been done by general obligation bonds.

“General obligation bonds are exactly what the title says,” he said. “They are general obligations of the taxpayers of the county. Every general obligation bond issue that has been sold in this county, and ones that will be sold in this county; the board of commissioners have to pledge your taxing authority to retire those debts, now again, not telling you what source of funds to use.”

Jenkins said before the state sales tax was enacted, bond debt payments in the county were retired through general ad valorem tax dollars. Under the state sales tax act, Article 40, levies one cent of the tax and of that one cent 60 percent is earmarked for the schools.

He then referred to Article 42 of the same act, which identifies one cent of the sales tax and 40 percent of that one cent earmarked for schools.

“The General Assembly requires that those tax proceeds be used to either retire debt or new construction,” he said.

Jenkins said in the mid-1990s the board of county commissioners adopted a resolution that those funds earmarked for the school system to go into a special schools capital reserve fund, from which debt would be paid.

“As you know, we have retired debt for the past 12 years out of that account,” he said. “The Board of Education came to you  three years ago and that balance in that sales tax capital reserve account and you authorized a couple transfers, I think one of them significant—somewhere around a half of a million dollars, out of that account into current expense to retire some immediate current expenses.”

Commissioner Robert Carter asked Jenkins if there was a reason why the county adopted the resolution to place those funds into a reserve account.

Jenkins said prior to the resolution creating that reserve account, the county would receive sales tax reimbursement from the state. The funds would then be separated according to the formula and forward the amount earmarked for that particular bill on to the school board.

“The Board of Education would take it and use it as it deemed appropriate to fund schools needs,” he said. “At the end of the year when it came time for the bond payment to be made, I understand that the school system had expended those funds for other purposes and did not have the funds to pay the school debt.”

Jenkins said the commissioners took care of the bond debt that year and adopted the resolution.

“General obligation debt, regardless of what the purpose is, is general debt for the county,” he said. “To my knowledge, the Board of Education has not ever written a check to retire a debt payment. That check is always written by the Finance Officer of the Northampton County Board of Commissioners because you are the debt-holders.”

“So that negates the statement that the Northampton County Board of Commissioners has never paid for the building of any kind of school in Northampton County,” said Commission Vice Chair Virginia Spruill.

“It provides extreme clarification to that statement, yes,” Jenkins said.