Savannah to give county $4.5 million for school construction

Jan. 14– A likely compromise between Hardin County and the city of Savannah promises to result in the completion of a 550-student county school now under construction near Walmart.

With $7 million needed for the work, the Savannah City Commission unanimously voted tonight to offer to pay $4 million in county debt for the project over a period of 16 years at an interest rate not to exceed 3.75 percent. The funds to service that debt are to be derived from the city’s portion of the 1997 one cent sales tax increase.

The city is also offering to provide an immediate cash payment of $535,000.

Under the proposed agreement, which the Hardin County Commission is set to consider Tuesday night, the county will provide $500,000 cash toward the total needed and issue $6 million in bonds.

In return, the city is set to receive approximately 68 acres known as the Louie Black now owned by the Hardin County Board of Education and the North Elementary School property when it is vacated.

The tentative agreement also provides that if the local option sales tax proceeds being used to retire the $6 million bond exceed the twice yearly note payment by 125 percent, the excess will be held in escrow by the county until the bond is callable.

At such time, 20 percent of any excess shall be paid toward the retirement of the city’s share of the debt principal.

The North Elementary property has been assigned a value of $5.9 million by the board of education–a perhaps optimistic number.

In a planning session, county commissioners also met tonight and were given their first opportunity to see the proposal.

Hardin County Mayor Kevin Davis noted that Savannah is under no legal obligation to help pay for the project.

"I appreciate the consideration the city is offering. We as the county need the city, and the city needs the county," he said.

County Commissioner Mike Jerrolds of Walnut Grove questioned where the $2 million not being funded by the city will come from.

Davis said that because of current favorable interest rates, the county can afford to service the $2 million in debt not being covered by the city without a tax increase.