Jimmie Stephens
Jimmie Stephens, Jefferson County Commission president. (Frank Couch\[email protected])
(Frank Couch)
The Jefferson County Commission is looking to raise up to $65 million annually by refinancing nearly $600 million in education debt, with a large portion going to area schools, AL.com has learned.
That plan, which is among several that could be introduced in next week's regular session of the legislature, does not include any new taxes, according to officials.
Some parts of the plan could be unveiled as early as Wednesday when Commission President Jimmie Stephens delivers his first annual State of the County address to the Rotary Club of Birmingham at The Harbert Center.
Stephens stressed that any bill introduced in the Legislature will come from lawmakers and the commission will support any revenue fix that does not put any financial burden on residents, he said.
According to some who have seen an outline of the speech, Stephens is expected on Wednesday to discuss refinancing debt on portions of $1 billion the county borrowed in 2004-2005 for county public school construction.
The refinancing could mean between $61 to $65 million for the county and area schools, according to those with knowledge of the plan.
The proposal would be contingent on the necessary legislation by state lawmakers and the issuance of the refunding warrants.
Stephens has said the county would use added revenue for road repairs and infrastructure; capital needs and economic development.
Lobbyists in place
On Thursday, the Jefferson County Commission put in place two Montgomery-based lobbying firms to help with bills in the Alabama Legislature, which begins March 3.
Stephens declined to discuss details of any legislation - several are being crafted on the county's behalf -- or his upcoming speech because some aspects still need to be worked out and he was waiting for input from some commissioners, he said.
However, Stephens said his Wednesday speech "is an important communication because it affects the future of Jefferson County."
He did acknowledge he has met with some school officials and members of the Jefferson County Legislative Delegation, including chairman Jim Carns, about ways to generate money for both the county and schools.
In 2004, the Jefferson County Commission approved a 1 cent county sales tax to raise $1 billion for school construction projects. The warrants are being repaid with proceeds from a 1 cent sales tax.
Half of the money was financed with a fixed rate interest of around 5.5 percent. The other half was financed with variable interest rates that skyrocketed with the market crash of 2008.
Last year the tax generated $96 million, according to finance officials.
How one plan works
Here's how the refinancing could work under one bill that has been discussed: Refinance the outstanding principal balance of $595 million on fixed terms currently averaging around 4.5 percent.
The debt service would be between $32 to $35 million leaving between $61 million to $65 million in excess receipts that could be used by the county and area schools.
At least $25 million could go to the county for roads and infrastructure improvements and the remaining excess funds would be split between the county and every county school district based on annual student count.
Stephens's speech, which begins at noon, is expected to cover a myriad of other issues including the challenges the county has faced and the need to continually improve services.