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July 27, 1993

Eyes on the Prize

by Edmund Tsang

Charles Ratcliffe, associate superintendent for business and finance for the Mobile County School System, is methodologically pursuing the revenues promised the fund-starved school system in the form of sum-in-lieu payments from companies financed by industrial development bonds, but has yet to arrive at the school treasury. While waiting to meet with representatives of the Industrial Development Boards (IDBs) in Mobile County to determine the exact amount of in- lieu monies due to the school system, he sent the Degussa contract to school board attorney Bob Campbell, III.

In a telephone interview in early July Campbell said the school system was not named as the recipient of sum-in-lieu payment in the Degussa contract, contrary to articles carried in the Mobile Press-Register. "The school system is not a third-party beneficiary," said Campbell.

Ratcliffe told The Harbinger on July 20 that he remembered the Mobile daily quoted the CEO of Degussa as well as David Wright, president of Mobile County IDB which underwrote the bond issue, saying the Mobile County School System will receive payment in-lieu of property tax. "In subsequent stories, the Mobile Press seem to back away from that," added Ratcliffe.

The Cat Is Out Of The Bag

In March, 1993 Ratcliffe placed sum-in-lieu payments on the agenda of the school board meeting, thus allowing the issue to be aired in public for the first time. The next morning, "School Panel Seeks Industrial Monies" was the headline of a front-page article in the Mobile Register.

At the March 15 meeting, school board commissioners Jeanne Andrews, Hazel Fournier, and "Sugar" Warren expressed outrage at the non-payments as well as the widespread awards of tax-exemptions by the IDBs. [Properties financed by IDB bonds are exempted from property tax for the length of the bonds.] School board attorney Campbell explained to the board members that the school system is considered a "third-party beneficiary" in IDB contracts, so it has little legal right to claim the sum-in-lieu dollars. The school board then directed Campbell to meet with attorneys for the Mobile County and the City of Mobile IDBs to determine the status of in-lieu payments.

During the July interview Campbell told The Harbinger that he had not been successful in arranging a meeting with attorneys representing the IDBs in Mobile County.

Ratcliffe said he has written to Wright to inquire about the status of the school system in IDB contracts with sums-in-lieu provisions. "We at least want to know what is our position," Ratcliffe told The Harbinger. Ratcliffe also said he is working with N.Q. Adams, school board commissioner and chairman of the finance committee of the school board, and, until November 1992, a director of the City of Mobile IDB, to try to locate all the records containing in-lieu payments. In March Ratcliffe told The Harbinger that "payments of some substance" owed by businesses with IDB bond issues from the early 1980s may never have been made. "No records of payments exist anywhere," he added.

Former school superintendent Doug Magann told The Harbinger last year that "the banking syndicate, the Mayor's [and] the Chamber of Commerce" forced him to end his attempts to collect the missing sum-in-lieu monies. Harbinger research has found that City of Mobile and Mobile County IDB agreements contain in-lieu payments totaling $700,000 per year, with some agreements dating to the early 1980s.

-- July 27, 1993


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