By NEAL WAGNER / City Editor

The Pelham City Council is set to vote on a proposal to raise the city’s sales tax by 1 cent during its Aug. 5 meeting unless it calls a special meeting before then.

The council held the first reading of the proposed ordinance during its July 15 meeting after several Pelham leaders and residents weighed in on the matter during a public hearing.

During the hearing, which drew about 75 people to Pelham City Hall, City Council President Rick Hayes said revenue generated from the additional 1 cent would be earmarked for a city education fund.

The school fund could only be spent on educational items defined by the council.

Pelham leaders currently are considering breaking away from the Shelby County School System to form a Pelham school system, but the tax increase would not be contingent on Pelham forming its own school system, Hayes said.

“This is an opportunity for us to quickly and decisively make a difference for schools in Pelham,” Hayes said. “This is an absolute have-to for our city.”

Pelham Mayor Gary Waters, who previously said he would not support Pelham forming its own school system now, said he was in support of raising the sales tax to support the city’s schools.

“If you look at the long-term deep-pocket cost to support a school system as opposed to passing a 1-percent sales tax, it’s a no-brainer,” Waters said.

Several Pelham residents shared mixed feelings on the proposed tax increase.

Mike Harris, owner of Three M Karts and Mowers in Pelham, said he opposed the tax increase because it would place his business at a competitive disadvantage compared to some other cities in the Birmingham area.

Pelham resident Rick Rhoades said he supported the tax increase because Pelham’s parent support base shrank when Oak Mountain High School opened, and will decline again when Helena High opens.

“I think it’s important to understand (that) the resources we used to have to support our schools are no longer Pelham resources,” Rhoades said.

During its pre-meeting work session, some council members considered voting to suspend the rules of order to allow them to vote on the tax increase the same night.

Councilman Maurice Mercer said he was not yet ready to vote on the matter, and said he would like more time to try to set up a meeting with Shelby County School System leaders.

“We are moving a little rapidly,” Mercer said, noting he would like to discuss the tax increase with business owners during the city’s July 23 business council meeting.

If passed, the tax increase also would eliminate discounts to businesses for paying their sales and lodging taxes on time. Currently, Pelham discounts up to 5 percent of a portion of sales taxes paid by businesses before the delinquent date each month.

“We are not at a point where we can vote on these yet,” Hayes said.