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January 12, 1993

Industry and Land, but No Money

by William Patterson

Suspended School Superintendent Douglas Magann last year made plans to collect money promised the schools by industry financed with Industrial Development Board (IDB) bonds. But he says he was forced to end his efforts by "the banking syndicate, the Mayor's office, [and] the Chamber of Commerce." Money owed the school system from this source probably totals several million dollars.

In an interview with The Harbinger on January 2, Magann says his office began examining "sums-in-lieu" during the fall of 1991. Property financed with IDB bonds before January 1993 is exempt from all property tax, and sums-in-lieu are fees paid as a substitute.

City of Mobile IDB member Walter Bell told The Harbinger last year the City Board instituted sums-in-lieu for the schools in December 1989. Mobile County IDB attorney Maury Friedlander said the County Board adopted a similar policy in July 1990.

[A search by The Harbinger of Probate Court records and other documents over the past six months found $800,000 a year in sums-in-lieu payments written into the agreements of local companies financed with IDB bonds. Some of the agreements date back to early 1980's.]

School Board Business Manager Charles Ratcliffe says Magann sent a school system employee during the fall of 1991 to the County Courthouse to locate IDB agreements. Ratcliffe says his office examined microfilm and other records of many IDB contracts to compile a list, but the job proved too complex.

Mobile County Revenue Commissioner Freda Roberts helped with the record search. Roberts says she cooperated, hoping it might result in "a procedure to track" the sums-in-lieu. Magann promised her a report about the payments due the schools.

Mobile County School Board member Dr. Joseph Mitchell recalled the time in 1991 after the new superintendent arrived. Magann looked at Mobile County's tax base, says Mitchell, and saw "industry, land, but no money for the schools." Magann was soon "going to places where money was due," Mitchell said.

Magann discovered the IDB agreements contained "loosely written in-lieu language" that failed to assure payment to the school system. The documents themselves were "scattered" and difficult to locate, he says. Magann says he was disturbed to find many of the agreements involved "absentee landlords" that were "not even American companies."

One Too Many Answers

IDBs and sums-in-lieu became a topic of community debate in the spring of 1992 "during the middle of the legislative session," Magann remembers. Degussa, the chemical manufacturer, was granted a substantial school tax exemption by the Mobile County IDB on a bond issue, despite the Board's policy to require sums- in-lieu for lost school taxes.

Magann says he "hit the ceiling," and was ready to "publish names." School Board Commissioner Mitchell remembers Magann wanted "to sue" companies.

But Magann says he was soon told to end his pursuit of the sums-in-lieu funds. "Word came back through," he says, that the $15 million loan "float" needed by the nearly bankrupt school system was in jeopardy. Magann says he was sure local banks would deny the loan extension if he "turned over that rock [sums-in-lieu money]."

Nothing was in writing, Magann says. "Word came from the banking syndicate, the mayor's office, the Chamber of Commerce," he says. Asked by The Harbinger for names, Magann says "some attorneys."

Tax Commissioner Roberts says Magann may have been told to back off his collection efforts. "The report he promised [on sums-in-lieu] never came," she says. Also, Roberts says she asked the County for help on the sums-in-lieu, but "the County Commission told me to do my job" and not try to find the payments.

In a controversial move last October, Magann was suspended by a 3-1-1 vote from his post. The two African-American members of the school board, Hazel Fournier, who voted against the resolution, and Mitchell, who abstained, charged that the three white school board commissioners, Jeanne Andrews, N.Q. Adams and "Sugar" Warren, held a secret meeting which excluded them to plot Magann's termination.

School Board of Hard Knocks

Magann says School Board President Jeanne Andrews and Board member N.Q. Adams "didn't want to touch" the sums-in-lieu issue, and he says they wanted "no public discussion about it."

Andrews was "astounded" when The Harbinger asked her if Magann's search for the IDB money was cut short. She says the suggestion is "totally wrong."

Andrews says she is "very familiar" with sums-in-lieu. She says there was nothing the School Board could do to collect the money. "We have a situation where people [IDB financed companies] comply with the law," she says, and the School Board "can't point fingers."

Andrews says "poor record keeping" by the IDBs is "incredible," and says the School Board made an "effort to line up all these funds." She "assumed all [IDB agreements] contained sums-in-lieu," but there was nothing the Board could do. She added "issues like these are never easy, never simple" and "take time."

N.Q. Adams says no one attempted to block Magann from pursuing the payments. Adams says he is "not able to comment" on events last spring because he is doing research about them. The sums-in-lieu topic "needs more work," he says, but the School Board is "trying to get money as fast as possible."

Mitchell's first memory about the sums-in-lieu was of a meeting at Mobile County legislative delegation offices early in the 1991-1992 school year. Mitchell says Rep. J.E. Turner, then chairman of the delegation, Sen. Steve Windom, Rep. William Clark, Jeanne Andrews and Magann attended. Sums-in-lieu was one of the many money matters discussed, he says.

Need-To-Know Basis Only

City of Mobile IDB records show N.Q. Adams was a member of the City of Mobile IDB last spring. Adams was also chairman of the School Board's Committee on Finance during the 1991-1992 school year; he is the current chairman and has been the chairman of the School Board's finance committee since the 1988-1989 school year. Andrews is a member of the finance committee for the 1991-1992 and 1992-1993 school years.

Mitchell says Adams never told him about his appointment to a seat of the City IDB. Asked why Adams never mentioned it, Mitchell says "malicious indifference." "He knows clearly where things are," Mitchell says. Hazel Fournier, another school board commissioner, says she does not know Adams was a member of the City IDB.

Jeanne Andrews says Adams "left the IDB years ago," adding he left "when he came on the School Board." Adams was elected to the School Board in November 1988, and Sally Jones of the Chamber of Commerce said last week Adams' term on the City IDB expired in November 1992.

-- January 12, 1993


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