Northport Releases Official School System Feasibility Study

NORTHPORT, AL — The City of Northport on Friday released its highly anticipated feasibility study ahead of a public presentation at its next regular meeting on Monday.

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The 144-page study, obtained by Patch through a public records request, was conducted by Birmingham-based Criterion Consulting and examined the financial aspects of the city's proposed split from the Tuscaloosa County School System to form its own city school district.

Criterion points out that the formation of a new school system will be required to incur significant expenditures before becoming eligible to receive any state and federal funding — as the Tuscaloosa County School System gets 64% from state and federal sources.

The firm estimates that a reserve fund of at least $7 to $8 million to cover expenses over the first 15 months. This is the funding that Criterion says would need to be in place to get the new school system off the ground until it is eligible for state and federal money. The City of Northport would also be saddled with $30,707,496 in long-term debt, based on the financial estimates for the first year of operation.

For the next steps, Criterion laid out two different funding scenarios. The first includes only City of Northport residents, which would be approximately 3,870 students.

The second scenario would include the approximately 5,555 students attending Northport schools in 2021-2022, grandfathering those students in regardless of their home addresses. This would call for consolidating Matthews Elementary into Crestmont Elementary, and Collins-Riverside Middle into Echols Middle.

The Lloyd Wood Education Center, which serves students from a long list of country programs, including pre-K and the Sprayberry Center, will remain part of the county school system, despite being located within the Northport city limits.

As noted in our reporting on Wednesday, total payroll expenditures were estimated to be $35.4 million for Scenario 1 and $43.2 million for Scenario 2.

Here's a breakdown of each scenario:

*excludes startup costs

Scenario 1

• Total revenues: $30,754,074
• Total expenditures: $39,128,580
• Funding shortfall: $9,196,360
• State-mandated one-month operating costs: $3,370,425
• Additional revenue need in year one: $12,566,785

Scenario 1 funding narrative from Criterion : "Additional recurring revenues will be required of at least 9.2 million dollars. Those revenues can be generated by new property taxes or sales taxes. If increased property taxes alone were utilized to fill the revenue gap, 24.8 additional mills at $370,517 per mill would be necessary. Covering the required one-month operating reserve with property tax revenues would require an additional 9.1 mills at $370,517 per mill. Other sources of revenue such as City appropriations or a portion of the county-wide sales taxes (if either are available) would reduce those required millage amounts."

Scenario 1 funding options

• 33.9 additional mills, resulting in $12.5 million in additional revenue.
• 24.8 mills for break-even, plus city appropriation from sales tax revenue.
• 15.2 additional mills, plus changes to current sales tax distribution.

Scenario 2

• Total revenues: $41,964,707
• Total expenditures: $55,629,582
• Funding shortfall: $14,013,389
• State-mandated one-month operating costs: $4,716,761
• Additional revenue need in year one: $18,730,150

Scenario 2 funding narrative from Criterion "Additional recurring revenues will be required of at least 14 million dollars. Those revenues can be generated by new property taxes or sales taxes. If increased property taxes alone were utilized to fill the revenue gap, 37.8 additional mills at $370,517 per mill would be necessary. Covering the required one-month operating reserve with property tax revenues would require an additional 12.8 mills at $370,517 per mill. Other sources of revenue such as City appropriations or a portion of the county-wide sales taxes (if either are available) would reduce those required millage amounts."

Scenario 2 funding options

• 50.6 additional mills, resulting in $18.7 million in added revenue.
• 37. 8 additional mills for break-even, plus the city's appropriation from sales tax revenue.
• 23.7 additional mills, plus changes to current sales tax revenue distribution.

An early incarnation of the study — published on Nov. 7, 2022 — was obtained by Patch earlier this week, the date of which happened to coincide with the untimely resignation of former Mayor Bobby Herndon, who stepped down from office at the end of the last calendar year.

Patch has heard from numerous sources since Herndon's announcement in November that his decision to resign was due, at least in part, to the results of the feasibility study, which were expected to show that the venture would simply be too costly for the city. This, along with a very public spat with the Council over the city's appointment to the DCH Board of Trustees.

Still, Herndon told Patch this week that not receiving support to rename a street in from of his surveying office was the final straw that prompted his exit from politics — despite being arguably the most vocal proponent of a Northport school system over the years.

As Patch previously reported, a proposed 8.5 mill increase on the special election ballot in February was publicly opposed by the Tuscaloosa County Farmers Federation and failed at the ballot box with 80% of the electorate voting against it. This did not include those zoned for Tuscaloosa City Schools.

Had the measure passed, it would have generated $15 million in additional revenue to be earmarked for education and used for wish-list projects that Northport officials have been asking for.

The Northport City Council will hold its next regular meeting on Monday, April 18.

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