Rockwood School District Prop 3 Dashboard RSD Prop 3

The need is still there and is actually greater than it was last year, given the rise in interest rates.

Twenty-three percent of Rockwood voters cast a ballot in the April 2022 election and the proposition failed 51% (no) to 49% (yes). A post-election survey revealed that many who voted against it indicated they lacked information, didn’t understand the transfer or thought it was a tax increase.

The district could have come back this year with a bond issue to fund annual safety, technology and maintenance needs, but that would have cost taxpayers millions in unnecessary interest and it would be a short-term fix to an annual, ongoing issue. Rockwood has 34 schools and 3.8 million square feet of facilities that cost approximately $30 million each year to maintain. Reallocating tax dollars now being used to reduce debt to fund annual needs can be accomplished without increasing the tax rate and without taking on additional debt. It is a fiscally-responsible way to address those annual needs.

In Rockwood, we understand that updated technology and spacious, well-maintained schools are necessary to equip students with the tools for success. The passage of Prop 3 would provide a pay-as-you-go funding method for these ongoing needs, allowing Rockwood to be more efficient with the tax dollars we receive. With Prop 3, the dedicated source of revenue in the Capital Projects Fund would allow security and technology upgrades as well as ongoing maintenance projects to be completed without issuing long-term debt. The resulting avoidance of interest expense means that 100 percent of the tax dollars collected in that fund could be applied to our safety, technology and facility needs. In other words, a larger portion of your tax rate will go directly to our schools and less will go to banks in the form of bond interest.

While the needs of our facilities as well as technology and safety will constantly change, we currently forecast that approximately 20% (or $6 million) of the Prop 3 transition of $0.54 cents will be allocated to technology for student, staff and infrastructure refresh when the transition is fully phased in (tax year 2025) and 5% (or $1.5 million) will be allocated to safety hardware and equipment needs. The remaining 75% (or $19.5 million) will be allocated to our facility cycle maintenance needs that would include, among other items, HVAC, roofing and hard surface paving. The allocations could certainly change between years based on the needs and priorities within these three areas.

As a result of strategic refinancing and aggressively paying down our debt, we are in a position to reallocate tax dollars from principal and interest expense (Debt Service Levy) to the district’s operating expenses (Capital Projects Levy) and address the immediate safety, technology and facility needs across the district. Moving to a pay-as-you-go funding method for annual items has been part of the district&rquo;s long-range financial plan since 2014. By law, we need to ask voter permission to reallocate these funds for a different purpose. Prop 3 would allow us to do so without raising the overall tax rate.

No, we will pay our existing debt within the current maturity schedules and the planned Debt Service Levy of $0.14, if approved, will be sufficient to satisfy those obligations. Reducing the amount of money that is going toward debt will not change the amount we pay in interest. Our interest cost on existing debt is fixed. We are always looking to save taxpayer dollars. In fact, Rockwood is proactive in looking to reduce its interest cost in the form of refunding or prepayments if the interest rate environment is favorable to do so. Rockwood has saved over $13 million taxpayer dollars in refinancing since 2009.

We are always looking to save taxpayer dollars. In fact, Rockwood is proactive in looking to reduce its interest cost in the form of refunding or prepayments if the interest rate environment is favorable to do so. Rockwood has saved over $13 million taxpayer dollars in refinancing since 2009. Here are recent examples of refinancing and what it saved taxpayers:

• FY16 - $38.9 million refunding of existing debt, saving $3.6 million dollars;
• FY18 - $26.7 million refunding of existing debt, saving $1.3 million dollars;
• FY22 - $16.0 million prepayments and defeasance of existing debt, saving $4.1 million dollars.

The reallocation of the tax levy from Debt Service to Capital Projects will establish a funding stream for district safety and security upgrades, technology device and infrastructure refreshes, and facilities maintenance to fund these purchases without issuing bonds and incurring debt. This will result in both the avoidance of interest expense and more efficiencies in facilities management.

The Rockwood School District has paid over $40 million in interest expense over the past five years. Interest expense will continue to be incurred on bond debt that is already outstanding. However, no additional interest expense will be paid on purchases made with Prop 3 funding. The remaining debt service levy will still allow us to pay our remaining debt obligations on schedule with interest expense over the next five years on existing bonds around $14.5 million.

Rockwood’s existing debt is set to be paid off in 2038-2039. The debt service levy would only be reduced if the district didn’t incur any additional debt or issue any new bonds over the next 15 years. If Prop 3 fails, asserting the tax rate would go down is not realistic because the district has to maintain 37 buildings at a cost of more than $30 million each year, so the need will always be there.

The average age of our schools is 47 years old and our cycle maintenance addresses 37 buildings that cover more than 3.8 million square feet across the district (the equivalent of three Busch Stadiums or 66 football fields). It costs approximately $30 million annually to address the safety, technology and facility needs across the district.

Imagine buying a 47-year-old home and not expecting to do any maintenance on it for 15 years. That is simply not realistic.

Funds from the last bond issue (Prop T) passed by voters in 2017 were depleted by projects completed this summer. If we don’t have dedicated funding, we would need to continue to go to the voters for bond issues, which (if passed) would accrue additional interest.

Also, paying for significant new additions to district facilities, whether it be a large building addition or a new building, generally requires a bond issue for adequate funding. There are no current plans for significant new additions to our facilities. However, we simply cannot predict that there won’t be a need for additional facilities over the next 15 years when there will be a need for a bond issue, which would also prevent the Debt Service levy from decreasing.

The levy transfer is reallocating tax dollars the district already receives from debt service to capital projects that allow for effective long-term safety, technology and facility maintenance planning without incurring additional debt and paying interest. This will not affect the overall tax rate and is not a tax rate increase. Prop 3 is about transitioning to a dedicated funding stream to ensure 100% of the revenue received goes back into our buildings through safety, technology and facility maintenance needs without increasing the overall tax rate.

School financing is broken down into four fund categories. Each fund category can only be used for specific items under Missouri law. Each category has a coordinating tax rate that is set annually. Currently, the tax rate associated with Rockwood’s Debt Service Fund is more than necessary thanks to aggressively paying down the debt, higher assessed values and taking advantage of strategic refinancing opportunities to save taxpayer dollars.

The long-range strategic plan has called for a transfer of funds from Debt Service to Capital Projects, and that can only be done through voter approval.

Restructuring the tax rate will allow the district to allocate annual resources to safety, technology and facilities with zero change to the overall tax rate.

Rockwood has traditionally funded our safety, technology and cycle maintenance needs by issuing general obligation bonds. The current Debt Service levy of $0.6800 provides the funding for the repayment of principal and interest on our outstanding debt. Based on the higher interest rate environment and the responsible structuring of our outstanding debt, the district is in a position to transfer a portion of our Debt Service levy to the Operational levy in the Capital Fund without increasing the overall tax rate.

Going to the voters for a bond issue every two to five years to fund annual safety, technology and facility needs is not a fiscally-responsible way to fund these types of expenses. Each election costs taxpayer dollars, regardless of the outcome. Each successful election involving a bond issue costs taxpayers millions of dollars in interest on those bonds to fund annual expenditures. In the last five years, Rockwood has spent over $40 million in interest on its debt.

Restructuring the tax levy, without raising the overall rate, is the most fiscally-responsible way to fund annual projects and ensure the district is being good stewards of taxpayer dollars. Missouri law dictates that the district needs voter approval in order to do that.

Additionally:

• The district would still need to go to the voters for any new facilities or significant additions to existing facilities in the future.
• Rockwood is the only district in Missouri to hold a AAA rating, the Meritorious Budget Award and two certificates of excellence for its financial reporting.
• The zero-tax-increase levy transfer has been part of the long-range financial plan since 2014.

There is no expiration on the levy transfer because these annual needs will not go away. With a bond issue, “one-time” projects are identified and funded by the bonds. We are looking to fund ongoing safety, technology and facility cycle maintenance needs across the district on an annual basis, without borrowing funds and incurring interest.

Prop 3 does not provide funding to catch up on all projects, which will then no longer be required (and expire). Technology and safety updates will be ongoing as those items are ever-changing and improving. The life of a Chromebook is approximately five to six years, for example. With 3.8 million square feet of space to maintain, the district will continue to have needs with regard to facilities on an annual basis. Those needs include, but are not limited to, HVAC, flooring, roofing, paving, elevators and ADA lifts, as well as playground equipment. As our buildings age, there will not come a time when we no longer have to pay for these items.

Prop 3 provides only enough funding to allow the district to address ongoing annual needs to the tune of $26-27 million. It will do so without borrowing funds and incurring interest. We are simply reallocating tax dollars we are already receiving. This is the most fiscally responsible way to fund these ongoing needs.

School districts cannot receive a “windfall” when assessed values go up. Missouri school districts are limited to revenue growth by the Consumer Price Index (CPI) or 5% (whichever is lower), commonly referred to as the Hancock Amendment. In fact, at the Tax Rate Hearing in Sept., the Rockwood School Board LOWERED the district’s overall tax rate this year by $0.25 to $3.8907 to offset rising property values, as required by Missouri’s Hancock Amendment. This is the lowest Rockwood’s overall tax rate has been since 1990, and it is one of the lowest overall school district rates in St. Louis County.

Rockwood received a total of $11.4 million one-time funds approved through federal legislation to provide financial assistance during the COVID-19 pandemic to spend over the course of three school years. The funds were allocated and most of the allocated funds have been spent. We expect to spend our entire allocation of ESSER III funds by September 30, 2024.

Here is a comparison from last year (2022) that shows the expenditure per student in Rockwood compared to other St. Louis County school districts. Given that the latest district rankings by Niche.com show that Rockwood is the fifth best performing district in Missouri and that we have one of the lowest per pupil expenditures, that demonstrates that Rockwood taxpayers are getting a lot of bang for their buck.

Other points of pride that demonstrate the level of education our students are receiving include that Rockwood has 34 Rockwood students representing all four district high schools who have been named semifinalists for the National Merit Scholarship Program. With 23 semifinalists, Marquette has the highest number of any school in the state of Missouri, public or private. Overall, Rockwood contributed nearly 12 percent of the 292 National Merit Scholarship semifinalists from Missouri this year. Also, the Rockwood Class of 2023 had 279 students who scored 30 or higher on the ACT and 68% of students in the Class of 2023 earned at least one college credit during their high school career.

Registered Missourians who expect to be prevented from going to their polling place on Election Day may vote absentee beginning six weeks prior to an election. Options include voting by mail or in person. For additional details about absentee voting, visit the St. Louis County Board of Elections website or the Jefferson County Board of Elections website.