001All right. Uh, welcome everybody here in person. Welcome everybody online to this special board of education meeting for the Aquinic uh school district. Uh Thursday, August 21st. It is 5 p.m. Uh we will start this meeting as we start all of our meetings with the pledge of allegiance. >> I pledge algiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all. >> Okay, a couple of quick notes. Um, Michelle Dit could not be here in person, but she is online with us. Michelle, are you there? >> I'm here. >> Okay. Thank you. Thank you for uh being able to attend at least uh electronically. Um, this is a special meeting. There is only one item on tonight's
002agenda. um as we suspected would happen at our board meeting last Tuesday at about 9:40. So after our board meeting uh ended, the general assembly granted school boards um loc or school districts located entirely in Newcastle County the ability to differentiate tax rates and set a separate rate for residential and non-residential properties. The non-residential rate cannot be more than twice the residential rate. Uh school districts are required to get that uh new if if we're going to do it. We have uh 10 business days. So, we're within the 10 business day uh period and that's the purpose of this uh special meeting to receive a presentation uh from our financial folks and then to uh v vote and possibly differentiate the rates. So uh with that um we are going to have a presentation uh
003and I believe that our former CFO who has come in to help us uh this these last two months Chuck Longfellow I see you on the screen now and so you're going to lead us in this presentation. >> Thanks. Can you hear me? Okay, >> we can hear you. >> Excellent. All right. So, this uh this will be a update on the uh tax warrant and the presentation of a potential um uh amended tax warrant for um for fiscal year 2025. Next slide, please. So, the latest uh legislation that came through include these three bills and additional bills. Um, the one that we are discussing tonight involves um, House Bill 242, which enables school districts in Newcastle County that are fully enclosed within Newcastle County to revise tax rates for fiscal year 2026. Um, if
004I said 25, I'm sorry, I meant fiscal year 2026. um by setting the separate residential and non-residential tax rates to adjust the balance between two categories. Uh ensuring there is no increase in total revenue and as Mr. Forston said um ensuring that the non-residential rate is no more than twice the rate of residential property. Next slide, please. This is the tax warrant that was passed in July. And so if there's no change tonight, this is the one that will stand. This includes the uh 10% post reassessment increase. Next slide, please. Just a note about what we mean when we say residential property. One of the things we had to do is determine what does that include? What does that mean? Newcastle County already um classifies property classes R which is residential, ER, exempt residential, F
005farm and EF exempt farm. Um those four categories comprise what they call residential. Even though they say exempt, some of these some of these parcels that are classified these way these these ways do have some residual taxable assessed value to them. That's why we include all four of those. >> Chuck, can we go just go back to the last slide real quick, Steve? >> Yes. >> I want I want to go back to this slide because I just want to be clear. The only tax that we raised uh pursuant to that 10% uh authorization uh regarding reassessment was the current expense rate. That's the only tax that went up 10%. The other like debt service was unchanged. tuition is just a function of what our tuition expenses are. Um, and the different match taxes are
006a function of how much the general assembly is willing to match. So the when we talk about the 10% increase that we adopted at our July meeting, that 10% was just to the current expense ratio. Correct. >> That's absolutely correct. Current expense is the one that involved a 10%. Um tuition did go up because of increased uh cost of educating children in the needs-based categories and special programs is allowed by law and match are they're they're different depending on um what the law allows as far as a match and that's all in the um either Delaware code or the state budget bill um that sets those or that that enables us to set those. Yes. >> Okay. Thank you. >> You're welcome. Next. So um go back one please. So just a note um before
007before reassessment using the 1983 values the tax burden was essentially on 86.1% residential and the balance non-residential according to these um these property class definitions. After reassessment, that shifted 89% 89.5% residential. The balance 10.5% non-residential. Next, so um Oh, go back on there. There we go. So, um I was asked to model what it would look like to provide the maximum relief to the homeowners in the district under um the um abilities we had under HB242. So, maximizing relief to homeowners, these would be the new overall rates. Um residential rate would be um 57.693 cents per $100 assessed. And that's 9.5% less than the post reassessment rate of 63 or so, whatever that number was. Non-residentidential rate would be $1.15.379 cents per 100 assessed, which is 81% more than the post reassessment rate of the
00863 or so cents. Again, this models maximum relief to um residential properties. Next, please. And Chuck, real quick again, the reason I made the point earlier was because when the current expense rate is the only one that we raised is the only one we had the authority to raise that 10%. So right now that rate pursuant to the slide is 30.3541 cents on the dollar. 10% of that being about 3.5 cents. So we're going we're having an overall reduction proposed here for residential of 6375 to 0.57693 which is a reduction of more than the 10% increase that we passed in July. Is that correct? the increase to the operating expense, the decrease in the residential rate is is more than the increase that we had passed in July. So, it's actually going to be a
009little lower. >> No, I I don't know that I' I don't know that I'd say that the um when you take all of the when you take all of the tax components going um Yeah, I don't know. I don't know that you would say that because we're when you do this um aortionment between residential and non-residential, it's going to impact all of the tax components um proportion proportionally. It doesn't just um pertain to the um the operating part. It's spread. You'll see in the in a later slide what it looks like among all the rates. And if you were to compare >> Yeah, Chuck, you missed my point. Um my point my point is that you're right. the 10% reduction or or the uh split differential that we're going to do right now, assuming that
010we do it um cuts all of the different tax rates by some percentage. Um but the only rate that we had used our authority for pursuant to the reassessment statute was the operating rate. And so >> that is correct. Then the operating rate is about 57 or so% of the entire rate if I remember correctly. >> Yes. Okay. I'm sorry I interrupted you. Keep going. >> That's okay. That's okay. Um so yeah the residential rate the new one if this is if if this model is accepted would provide um would would result in u reductions in the currently issued bills of 9.5% um on the school tax. So um okay go ahead to the next slide please. This is what the rates would look like residential and non-residential when split out into the tax warrant.
011So if this is the model that the board wants to pursue, then these are the rates that would be on the tax warrant that would go to the county. And uh next slide please. Just a few graphs to see just to show um comparatively the impact. So um the top one is if the proposal tonight is accepted as is then the um responsibility for um for the school taxes in total on residential would be 81% versus 19% non-residential postreassessment which is where the the bills that are issued now currently out there is this is the center um bar which is 89% 89.5% of the responsibility is on the residential with 10.5% on non-residential. The bottom bar represents what it was like before reassessment happened. If things had just gone on without reassessment, then the responsibility
012would have been 86.1% on residential. Next, please. So, real quick, Chuck, so um >> regardless of uh the 10% increase that the the district did, it seems residentially uh the residential property took a larger hit as far as the burden on taxes than commercial after reassessment. Correct. >> Yes, that's true. And it it doesn't look that dramatic here. Um it's it's just, you know, 3.4% different. But I know from the phone calls that I've been helping to answer, there are individual cases that are far more far more dramatic than what you see here. You know, you hear about about bills going up. I've I've seen 55 80%. I've seen I've seen even some that have more than doubled. So, this provides some relief, but this this really without without the county going through and looking
013at those assessment appeals that I'm I'm sure there are a lot of people who have valid appeals out there that haven't been adjudicated yet. Um, you know, those cases are still out there, but this is just overall um when you take the district um in total. Okay. Uh next slide, please. All right. So, um, thank you, Chuck. Thank you for the presentation. So, in accordance to House Bill 242, the following tax rate recommendations are presented to the school board for approval. They're listed there. So, the overall tax rate um is.57692 for residential and 1.15378 for non-residential. I know that >> you wanted to have all that. >> Is there any questions or any additional questions on this? >> So I just >> pardon me there's no numbers. >> Oh well mathematically they they've done it.
014So uh does anybody have any comments? We have one person who signed up for public comment. I don't know if any board members have any questions for Dr. Longfellow or Dr. Burroughs before we have public comment. >> Um, >> nothing. I have nothing. >> I have no additional um questions, but if you can take public comment and then I can we can come back to the >> Yeah. No. So, so what we're, you know, if anybody has any questions on the board right now of the presenters, now is the time to ask those questions. We have one person who has signed up for public comment and then we'll make a motion and presumably have discussion on whatever that motion is. Chuck, I mean for the people who like me were just kind of playing on
015their calculator which is on my phone. If I assume that $500,000 I'm just picking that number as a uh as an assessment. Then I take the old rate that we had, which was 6375, and I multiply that by $500,000, and I have a school tax bill of $3,187.50. If the board were to adopt the new residential rate of 0.57692, then I do the math on that same $500,000 assessment. And the school tax is $2,884.60, which would be a savings in the case of a $500,000 assessed house of $32.90. Am I doing the math correctly? >> That sounds right. it would be a 9.5% decrease in the in the bill. Um, and yes, the way to figure it out is what is your assessed value? What if your school taxable assessed value of your property? Divide
016that by $100 and multiply it by the total rate. >> Okay. So, with that, unless Norm, do you have any questions for um >> Okay, we have one person who signed up for public comment. You get three minutes and you know the usual rules all apply. Be respectful, don't attack people, etc., etc. So, Mr. Ker, David Kizner, >> a microphone. >> That's fine. Yeah. So, we'll have a clock over here that'll count you down. >> The floor is yours, sir. >> Good evening. I appreciate you allowing me to address. Uh, as I always preface, not personal, it's business, dollars and cents. Burden on the taxpayers. Um, try to make it as brief and short and concise as possible. Couple words I learned back in the day. Shall and may. Shall. You do not have a
017choice. This back in the academy. May. You have discretion. Legislating. Even the prior legisl uh prior when you put on the 10% initially you have discretion to go up to 10% doesn't mean you have to exercise the full 10%. I also got an artic got hold of an article that I gladly forward to you. Brandy Wine, they lowered their tax bill district and couple other school districts in question um that I'd like to see things happen. Christian and state as a whole. Big thing is the burden on the taxpayer. I see a lot of new green pipes going up in the area. That's brand new revenue source that's not being taxed or tapped into both commercial and residential. I also see age of many of our attendees at some of these events not 25 anymore.
018A lot of us are either aged out by statute retirees, disabled, disabled vets, medically impaired, etc. A lot of a lot of other expenses fall on the burden of the taxpayer. What may seem like a big deal, $300. Well, I think you guys might be able to sharpen your pencils a little bit if you have that discretion. I know you did your calculations. I got that. If you have your discretion of going 5% 10 or 10% versus 10%, that'd be great. I also got hold of another article today. I skimmed over. It actually listed vendors that the state utilizes for its services, various equipments, etc. And the commonality that was brought out is three of the top investment firms in the nation, Black Rockck, Vanguard, and State Street. Found that interesting from two points of
019view, but the one for tonight. I'll be curious. The vendors that you're using and who has interest in those three investment firms, we get the best price. We putting things out to bid for service versus, you know, low bidder, best bidder, or because there's interest in those three coincident. Well, I don't even think it's coincidence because on every one of the ones that of services that was listed, those three had the largest interest in those services and supplies. So, as far as cost cutting, that might be something to pursue. >> All right. Well, Mr. Ker, you are out of time. I appreciate your comment and speaking and it's always interesting to uh to hear your thoughts. >> Okay, I appreciate I yield back. Please consider the burden on the tax plan. I yield. >> Thank
020you. >> Okay, there being no one else signed up for public comment. Uh the I think we ought to get things started with a motion if we can. If someone wants to make a motion. >> Mr. President, I'll make a motion to to approve the 2025 tax residential as presented 57692 non-residential 1.15378 as presented and as discussed in furnace. Is there a second? >> Second. >> Motion by Mr. Abram, second by Dr. Graham to approve splitting our uh property tax rates. Uh residential would become uh 57692. Non-residential would be 1.15378. Questions, comments, discussion on the motion. Dr. Graham? >> No. Um Mr. President, I'll ask for a point of privilege. Matter of fact, let me just let let's see if the if the motion passes or fails. Go ahead. Go ahead, Mr. President. >> Okay.
021Any further questions, comments, or discussion on the motion? >> Yeah. I just uh like to comment. Um I guess that everybody here um glad to see uh that we're able to do what uh the county does um with their end of of the tax burden. But as a as a business owner, it does it it is going to affect our community. And I and I I'm also a family that is affected by this. Um I just think through all this we can't you know you would buy drive by Lorenzo's Pro Clean all these businesses um that we need you know we support and should support but the residential as we said uh property owners did take a bigger hit than our commercial brothers and um you know um I I think this is um a
022great opportunity for us to uh try to balance that scale um a little better than the uh county uh led us to have That's my only comment. >> You have any comments? >> No. >> Okay. Uh, unless anyone has further comments, I'll call. Michelle, I'm sorry. I know you're online. Uh, did you have anything you wanted to comment about before we vote? >> No. >> Okay. Well, then with there being no further comments, the chair will call the question. All those in favor of the motion signify by saying I. I. >> I. Any opposed? Motion carries. Okay. So, we have adopted the new tax warrant and the district will get this information to the county tomorrow. And just so people know about the process going forward, then the county is collecting this information from the
023school districts and expects to send out new tax bills I believe the first week of September. Uh the time for paying the bills has been extended. Um, but uh I I can't, you know, I I I can't speak for the county in terms of precisely when they'll get the the bills out, but I know they're focused and they're ready uh to get that done. Um so, Dr. Graham, did you have something further you wanted to comment on? >> Yeah. Uh Mr. President, if I can ask for just a point of privilege. Um, I just wanted to kind of follow up on some of the comments that we heard in our meeting last week uh with the community and just wanted to acknowledge um some of that commentary uh that evening. And I just wanted to
024say that we most certainly recognize and we have learned what has brought us to this um situation and we're committed to learning uh what has occurred and we appreciate the support not just from the community um but from our leaders to help us understand what has indeed taken place. One of the comments last week that um really has uh resonated with me is a community member stood up and said that uh she is losing confidence in us and so we are committed to restoring that confidence. We certainly own what has happened as an entire leadership team. Another comment that was shared was that um we seem to be kind of taking this lightly or being dismissive of it and that is certainly not our intent. Um, of course we can't share with you discussions and
025dialogue that occur in executive session, but I can assure you that no one um has been taking this lightly since we've learned of it. I think we all have been committed to off-cycle meetings, offcycle phone calls, discussion, engagement to learn and more important, not to just learn what has happened, but more importantly learn how to mitigate this going forward. So I did just want to make those comments that we certainly as a board do not take this lightly. We own this entire process from beginning to end. We are looking forward to the external audits um that are happening next month. We're confident that it will affirm what uh Chuck and Scott has already revealed to us. And as you know, I think we have demonstrated that we are taking active steps to mitigate this. We
026have a new financial leader sitting here to my to my left. Um, we're working on our financial advisory committee group and then we as a board are committed to just continuing to learn and uh support each other in this and being able to kind of sit here before all of you and take the necessary steps. And um, as you can tell by our vote, we certainly support any opportunity to be able to offset the expense because we recognize what is actually happening. And to Mr. Higgins point. We know that we have kind of shifted some of it to um our commercial operations in our community, but clearly based upon our vote, we feel like that's the right thing for us to do for um not just for our students, but obviously for our taxpayers. So,
027I just wanted to acknowledge where we are, what has brought us here, our commitment to get it right, and for this hopefully to never um occur again because like I said, the comments last week um we certainly took them to heart and we do not want anyone to think that we aren't taking this serious or we're minimizing it or just kind of like moving on from it. We are part of the community as much as we are elected officials. Um, and so we take our roles uh very serious. So I just wanted to comment. We've had quite a few emails, quite a few phone calls since then. And so I just wanted to try to close the loop from a board perspective. Of course, speaking for myself, but hopefully I'm I'm confident that my fellow
028board members um agree with my commentary. So that will conclude my comments. Mr. President, >> thank you, Dr. Graham. >> no, not not now. You can talk to us after the meeting, but not now. >> Um, >> Michelle, any final thoughts? >> I'm good. >> Tim, just to, um, reiterate what Dr. Graham said. um with all the emails, phone calls, stopping at Sprout, wherever. Um we do feel it and we're part of the community and and um we we hear you and we we we are trying to do our best to be the best stewards um with the funds of our community. And uh through the emails, I just got back from Idaho, so I really couldn't respond to many literally had barely any internet service for the last few days. So um wasn't ignoring
029anybody. I just couldn't really retrieve my emails, that's all. So yeah, I will also say to the extent I've been getting emails, I've been trying to respond to them. Um certainly I my goal is to respond to every email I get. Um but with that uh we are adjourned. Thank everybody for coming. We have a financial advisory committee meeting coming up on uh the first uh Tuesday in September and then our regular schoolboard meeting will be Tuesday, September 9 here in this room. We are returned.