Pelham City Council financially partners with BOE
By MOLLY DAVIDSON / Staff Writer
PELHAM—As the Pelham Board of Education works to ready the school system for the coming academic year, the Pelham City Council has stepped in to offer assistance in securing financing for “potential capital improvements which need to be undertaken in order to provide the level of education desired for students in the City.”
The Pelham City Council voted to enter into a memorandum of understanding with the Board of Education, allowing the city to help the school system secure lower rates when issuing bonds to fund capital projects.
As a new entity, the Pelham City School System does not have as strong of a credit rating as the City of Pelham. Through the partnership with the city, the school system will be able to use the city’s credit to secure better interest rates.
“All we’re doing is offering our credit to the school system,” City Council President Rick Hayes said during a June 2 City Council work session, noting Pelham’s “balance sheet is one of the top in the state.”
The partnership could save the Pelham City School System as much as $1.5 million in financing, Hayes said.
“This does not impact (the city’s) debt ceiling,” Hayes said, adding this was a “logical” way for the city to help the new Pelham City School System.
“The $1 million we save will be used for a very good project,” Board of Education President Rick Rhoades said.
In addition to potentially saving the school system $1.5 million in financing, the city has been building an education fund for the Pelham City School System through a 1-cent sales tax enacted in September 2013. The education fund sat at more than $3.1 million at the close of April, calculated at the end of May.
“I want to thank the City Council and the Mayor for their support,” Rhoades said during the June 2 City Council meeting.
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