By NEAL WAGNER / City Editor

Pelham could form its own city school system separate from the Shelby County School system, but should consider a tax increase to support the proposed city system, according to a city school system feasibility study.

In the study, which was conducted by Ira Harvey of the Vestavia-based Decision Resources firm and posted on Pelham’s website on June 3, Harvey wrote Pelham forming a separate school system “does not present a difficult financial circumstance due to the tax base.”

However, “certain cost containment and revenue options should be considered,” Harvey wrote.

“While the projected revenue stream may appear to be minimally adequate for operating the current instructional program provided, funds for start-up costs must be considered, as well as roll-over costs (maintaining the current instructional program) and costs for instructional improvement,” read the study.

“Is it financially viable? Absolutely,” Harvey said during a June 3 public hearing on study. “In firm conclusion, with the local revenues you would inherit, it’s feasible. It’s a political issue for your governing body to decide.”

The study touched on several areas:

 

Revenues per student

 

Based on data gathered during the 2012-2013 school year, a Pelham city school system would have slightly less revenue to spend per student than the Shelby County School System without a city sales or property tax increase.

According to the study, Pelham would have had $9,288.50 in revenues per student in the 2012-2013 school year, while Shelby County had $9,444.49 per student.

However, the city would have $2,201 in unencumbered funds to spend per student, compared to the county’s $2,021, Harvey said.

 

Debt obligations

 

As of May 30, there was about $15.8 million in outstanding debt on the school buildings in Pelham. The city would have to fund an about $2.8 million debt payment during the 2013-2014 school year, according to the study.

Pelham would have an about $817 per-student debt load, compared to Shelby County’s about $605 per-student debt load, according to the study.

 

Additional spending

 

The study recommended the city spend an additional $4.28 million per year to enhance the city’s school offerings and facilities.

Of the $4.28 million, about $2.66 million should be earmarked for potential new school construction and $642,000 should be earmarked for an additional eight new teacher units.

If Pelham passes a 1-cent sales tax increase, it likely would generate about $4.62 in additional revenue per year, according to the study. A 5-mill property tax increase likely would generate about $1.93 million in additional revenue.

To view the entire feasibility study, visit Pelhamonline.com/pelham-schools-financial-feasibility-study-2013.