001Okay. So, uh, tonight we will set the tax rate. As part of that, we're required to do a tax rate hearing. Uh, present some information on that if the board has any questions. Um, and then we'll go from there. So, uh, just a review of the the process that we go through when we set the tax rate. Uh, this starts back in uh, March when we get preliminary assess valuations uh, from the county. uh we have to use that to calculate a preliminary tax rate which is then sent to the county by April 1st. Um that preliminary amount is what we use as we budget for the fiscal year beginning July 1. Um after the uh we then in July we get an updated assessed valuation and then a final uh assessed valuation after the
002board of equalization meets uh which for St. Charles County, we usually receive those in in late August. Um, then we use that information and uh calculate our retire required tax rate through the state auditor. There's a uh we put our information into the state auditor's form and it will tell us what our required tax rate is. Um, then we go through the process of posting that hold this tax rate hearing. Uh we will set the levy in the meeting tonight and then uh the board approved rate is submitted to county clerk by August 1st and then we will receive back from the county uh this the state auditor a letter that certifies our rate and says that we have made the calculations correctly and that is the correct rate for uh the year. So looking
003at assessed valuation uh and what we've seen for this year uh our assessed valuation in total went up by just under 9% 8.77% we're right at uh 3.7 billion in assessed valuation um for the district uh for this year 80 just under$84 million uh increase in new construction of real property. So that's uh property that has come on the books and uh been occupied since the last uh since this time last year. Um it going back to that you can see the reassessment years every other year and we'll talk a little bit about this. So uh coming up, but you can see the last reassessment year was a big jump of 21%. this this was more of a a normal increase of of 8.7 and that does include that new construction piece in there in
004that 8.7. Um just a reminder as we get into talking about the tax rates and um the different placements in funds for those tax rates. Uh I told you I you'll see this slide a lot. Just a reminder of the funds that we use in school accounting. Fund one is for general operations. Fund two is for uh certified staff salary and benefits and also our contracted education tuition that we pay to other districts. Fund three is for our debt service. That's the payment of our long-term debt. And then fund four is for our capital uh projects. So it's construction and uh purchases that are meant to last for uh longer than a year and cost more than $5,000 uh are in fund for. So proposed levy for this year um in the operating levy our
005operating levy uh proposed to be at $3.2073 2073. Uh and then we have so that's split out between funds one, two, and four. And I'll get to where how that's actually devised between those funds. Um and then we have two temporary levies. Prop 3 levy um which expires in 2031. That would be set at 0.2132. And then our Prop E levy is set to expire in 2035. and that is uh 0.1851. And then our debt service levy fund three would remain at 0.9304 for a total levy of 4.5360. Um just a little little bit more breakdown by fund of how those actually look between the four funds just and and then combined uh what they look like. Uh just that information. I won't read all those numbers again to you, but uh provided there for
006your information and then a a kind of a historical comparison of where we have been and um where we're at this year. So, it's a a five-year look back at our our levy. Um and you can see it's it's has decreased over time. From 2021, our total levy was at 5.0416 and now we're at 4.5360. And I'll talk a little bit about why that happens here in a little bit when we talk about reassessment. Um, and so this is this is the the typical uh relationship between assessed value and tax rate. So the assessed value is in the bar graph and the tax rate is in the line graph and you'll have an inverted relationship between those two. So as your assessed value goes up, uh, your tax rate will go down. Um, and that
007has to do with the Hancock amendment and the process that we go through when we set the rates. Um, I think I have another slide on that. So, yeah, on reassessment. So, this is a 2005. So, every odd year is a reassessment year for all real property. Personal property is reassessed every every year. So, it's based on book value. Um, so that happens every year. Real property is reassessed every other year in odd years. Um so our real property increased by uh 6.54% due to reassessment. Um and so what happens when when that increases what we have to do as a district is we have to we can only set our uh receive increase in revenue from that reassessment at uh CPI for last year. So CPI for last year was 2.9%. So our assessment
008value went up by 6.4%. But we cannot have a 6.4% in revenue due to reassessment. We're limited to by the Hancock amendment to that 2.9% growth. So what we do is we lower the rate until we hit that 2.9% growth. So in essence, you're not feeling the full payment of that 6.4% growth in reassessment. It's only a 2.9% growth. That's CPI. And again, that's over a two-year period. So, you're really not capturing the full uh inflation value over two years, it's over a one-year period. So, uh so we're receiving revenue of 2.9% increase just in local property taxes. So, comparing last year's local property taxes to what we're projecting for for this year, uh we're seeing that number grow by 2.9%. uh due to reassessment. It also is growing by 2.5 an additional 2.5% due
009to new construction within the district. Okay. Um debt service levy. So we are working with Stiffl on a plan to defease prepay uh about $16.7 million worth of bonds. This we brought to the board in October. Um, this this prepayment, we've done this the last two years, the district has done this the last two years. This uh prepayment uh will eliminate $ 8.71 million in future interest payments. Um, the bonds that we're paying off are from 2037 and 2038. So, we eliminate those interest payments over the next 15 years or 12 years till we get to 2037 and 2038. So, we're not only uh eliminating future principal costs, we're eliminating future interest payments. Uh this will allow us to maintain the levy at 0.934. And it puts us in a position if the boards would
010so decide uh to go to a uh do a no tax rate bond issue if if the board decided. Um and just a comparison of our neighbors in St. Charles County. Um you can see all of them uh everyone did decrease their levy this year. Um and you know one thing that I think is important to understand when we talk about our operating levy those two temporary levies are included in the amount that we calculate as our operating levy. And those two levies are paying off um lease purchases, capital improvements that were made by the district. So they're they show up in operating, but they are truly they're kind of acting more as a debt service. Okay? Because that was approved by the voters in 2011 and 2015. Uh borrowed money to complete projects in
011the district and that those levies were set to sunset after 20 years. So, those do show up in there, but they're those funds are not used for teacher salaries or operational costs. They're used to pay off some outstanding debt that is separate from our our uh debt service account. And summary, so we are the the tax rate would be lowered uh to 4.5360, which is the lowest rate in our district since 2009. and it will be uh it's on the agenda for the regular board meeting. Be happy to answer any questions from the board and then we have public comments. Yes. Thanks Dr. Tim. So you talk about 2.9% increase. That's the percent increase allowed because of CPI and all that. >> Correct. But the actual amount of money as a percentage that more money
012we're getting in it is that 2.9 or is it greater? >> So it's 2.9% due to only reassessment, >> right? But I mean >> it's 2.5 an additional 2.5% is due to new construction. So you really can't compare that because that's new assessed value that's happened in the district since last year. It wasn't on the books last year. What I'm trying to figure out how to ask is how much more money are we getting property tax from last year to this year? It's greater than 2.9 or less than 2.9. >> It would be greater than it's it's 2.9 plus the 2.5 >> plus the increase in the re value of the homes. >> That's in that 2.9%. >> So you're telling me that that all of our homes only went up 2.9%. No, I'm telling
013you that it went up the 6 point uh reassessment amount was 6.54%. So in average in the Wville school district, our home val real property increased by 6.54%. As a part of the Hancock amendment, we can only out of that 6.54% we can only receive a revenue increase equal to that 2.9%. So therefore, we lower our our levy to equal that 2.9%. That's why our levy went from 465.32 to 453 or 60. And so that happens every other year. You can see that levy will go down. You see it pretty clearly on this. You see uh the flat line is a non reassessment year. the line that goes down is a reassessment year. So every other year your your tax rate is going down. So if you're a homeowner and your house, your property was
014the average reassessment rate, let's say your your average reassessment rate is 6.54%. If if your property uh was a a received an average reassessment, you would pay 2.9% more than you have the last two years on that property. >> Not the 6.5 or whatever you could say. >> No. Correct. Because we've lowered the tax rate. >> All right. Second question. Can you go back to the statement about the feesman? How much money you're going to you look to want to pay off? >> Yeah. Um yeah, so we are paying off $17.6 million worth of bonds. Those bonds are were due in 2037 and 2038. So in add 37 and 2038. That's when those were due. We also had interest payments every year until then. About just a little over $700,000 in interest payments every year
015until then. So adding all that up is the we're we're the $8 million $8.7 million in future interest payments. >> And where I'm going with this, Dr. Tim, is every year we're doing this, paying off low interest notes so that we create more room that we can borrow more money. How much money last year did we pay off early? >> Do you know? It was a I don't have the exact number on the top of my head, but it was around 13 to 15 million, I believe. >> That's what I thought. Something like there. So, over the past three or four years, we've been paying off low interest debt ahead of time to make room so we can borrow more money at higher debt because the rates are up. And we're doing this so that
016we can build new schools, remodel, all the things we know that's needed. Why don't we consider instead of paying off early low interest debt to use that money that we've accumulated extra and just use that for repairs of the old schools instead of going down the path that we are right now. >> It goes back to this slide right here that those funds are in debt service, >> right? So they can only be used to pay off principal and interest. You can't use that to do new construction. You can't do use that money to fix up buildings. You can only use that money to pay off p principal and interest. Okay, that's disappointing, but I understand. >> Anybody else with any questions for Tim? So, this might be a silly question, but is it possible
017to do a budget adjustment, move the money out of there, or no, it has to stay in there? >> No, once it's in there, it can't. It has to stay in there. What about when we do our budget funding it less the debt service funding that one less the amount that we're going to pay off and >> the tax rate? >> Yeah. No, the the amount of debt that we're going to pay off prepay on the lower interest rate >> less what? So when we do our budget, we fund all of the accounts. If we fund it that much less that amount, it won't be in there. We won't have to take from it because we can't cuz >> it's it's already in there though. The the money is already there. >> It's inward. I'm
018talking like when we do our budget going forward instead of funding the amount of the low interest debt payoff and putting that money into that account. Don't put it in there. keep it and we can spend it on repairs or not keep it but put it into the account where we can spend that money. >> So, we're only authorized to have that levy in debt service. We are already uh our other tax rates are already at the maximum amount. There's no more authorization to in you can't lower the debt ser are you saying lower the debt service levy and increase the operating levy? >> I have no idea what I'm saying. It was the idea of we can't take money out of that account, >> right? The only way to do that, so this is
019money that's generated every year through our tax rate. What you're what I think you're saying is you're proposing to lower the debt service levy and increase the operating levy. >> So then you would generate less money in debt service and more money in operating. Correct. That's what you're what you're So our operating levy is already at the maximum amount that that we're authorized to go to. So it it can't go any higher without a vote of the people. So you can't you can't tra trade that off. There are I mean there are options and I've done this at at other places where uh you go to the voters and say um you know approve a 20 cent operating levy and the board will voluntarily roll back the debt service levy by 20 cents. And so
020there's no uh no true cost in your you know in your tax bill. you're gonna we're just shifting it to operating, but it takes a vote of the people to pass that operating levy increase and then the board could voluntarily roll back the 20 cent on that debt service levy side. The the other side of that is, you know, I I don't see us being done building buildings. And you know, I when I look at our debt service levy compared to Francis How and and Fort Zumalt, I see those districts is probably they're probably finished building new buildings. They've probably built out to their capacity. Are we there yet? I don't know. And that's that's the the the danger of lowering your debt service levy because then if you have to uh you have a
021building boom and you have to go uh then you're looking at a tax increase for people and it's it's just harder to to do that. So, um, if we were in a different spot, I mean, I think at some point that's going to be a consideration for a board of this district, but I just don't know if we're there yet as a as a district with the the land that's still available here and and potential growth. I mean, we could be here in three years and say, okay, yeah, we're at that point, but I just don't know that we're there yet today. >> Can we go to the defense slide? Yeah. So, we're going to prepay 17.6 million principal essentially. So, then we're saving that 8.71 million in the interest that we would have paid.
022>> Correct. >> So, then it's sitting in the account. So would we then maybe want to do another defecence down the road with that 8.71? >> I mean that's a that's a discussion for the board to have every year because you're you're in a position to either do something as a bond issue is one option or you continue to prepay your debt. That's kind of where we are at right now. And so, uh, you know, if we add debt to the district because we have facility needs we have to address. I mean, we're not just adding debt to add debt. We're adding it for a purpose. Uh, you know, that's something that we always have to remember is that there's a purpose of what we're doing and why we're doing it this way. um you
023know if we do that then the current levy will fund that and we'll pay that off you know in a in a and we'll have options I think you know with paying off this much in in prepayments uh we will have some options in in in how that could structure how that would look um those are discussions that that the board can have um you know if we get to that point and and decide that we want to look at that um you know there's just going to be options for the board to to consider as they um look at potential for that. >> So options as in potentially taking that 8.71 and moving it to do like building improvements >> or is >> again you have you would have to do it you you
024have to do a voter approved bond issue is the only way to access any of this. So even though we would have essentially this 8.71, we would have to go to the voter voters and ask for an 8.71 million bond. >> No. >> So this is just eliminating future payments. This is not cash in the bank. This is just future payments that we do not have to make. >> Okay? So the bond is not money in the bank. It's a loan. And so we're just eliminating part of that loan through the interest. And in essence, we're prepaying on our mortgage. And so then you eliminate future payments. Dr. Eller, just a maybe more of a comment slash question just to clarify for those that might be watching like back on slide 14 or sorry 12
025where you got the comparison of the different districts. I think you made the the comment like we're still in a position where we're obviously growing, might still need to build, whereas you look at the other districts and they're not. That's why we're on the higher end. Correct. >> Yeah, that's why I I would say our our debt service levy is higher than Francis, you know, I always compare us to Francis Halenport, Zumalt. They're similar in size, but I think we're also in a different position than than those two districts where I think they're probably feel like they're pretty well built out. Um, and again, I I I can't predict the future. We may be. It's hard to know. Um but I I I'm not ready to say that today. So that's why I think it
026would be important to leave that uh in place so you have that ability um you know to meet future growth and future needs of the district. So yes, that's why you know when you look at Orchard Farm, Orchard Farm is a growing district. They're building new buildings. They have a higher debt service levy. Um and so that's why why our debt service levy is higher than than in comparison to Francis Hal and Port Zumalt. They also have a higher uh assessed value than we do. We have more students, but their assessed their total assessed value of their districts are higher than ours. So it's they're a penny at at Ford Fort Zumalt raises more dollars than a penny in Wville. All right. Any last questions before we move on? >> Yeah, we just it would
027be open for public hearing. >> I was going to say the public comment is next and I do not see that anybody had signed up for that. So So we need a motion to adjourn the tax rate hearing and reconvene for open session at 6:30 p.m. >> Motion. I think I got to get the roll call back. >> Okay. >> Yeah, we'll take a roll call, Joanie. Thank you. >> Secretary Bonpaul. Hi. >> Director Olsson. Hi. >> Dr. Wave. Hi.