After nearly two years of research, discussion and gathering community feedback, the Board of Education voted on Dec. 14, 2015, to place an $85.1 million bond referendum on the April 5, 2016 ballot with the primary purpose of renovating the district’s high school. Proposition R passed with 64% voter approval.
The vast majority of the projects included in Prop R were in relation to a high school renovation and totaled approximately $82.2 million. This estimate includes construction costs escalated to reflect anticipated construction costs for 2016-18, abatement of existing hazardous materials, furniture, and equipment, and expenses associated with both internal and external temporary classroom accommodations.
In addition, approximately $2 million will be used to fund less extensive safety, security and technology upgrades in other district schools, and approximately $900,000 will be used to add an artificial turf practice field on the Ladue Schools West Campus in order to replace practice field space at the high school which will be lost due to construction staging and temporary classrooms.
Approximately $9.5 million in other projects will be prioritized and funded through alternative sources (noted below), or from cost savings identified as construction progresses. Significant contingencies have been built into construction estimates for the project due to the age of the facility. Extensive abatement of hazardous materials, such as asbestos and lead, is anticipated, and currently unknown structural deficiencies may be identified as rebuilding and renovation take place. As savings are identified, other components will be incorporated into the project and include renovation of one of the newer sections of the high school built in 1971 and smaller projects at other district facilities.
The Effect of the Bond Referendum on Property Taxes
The passing of Proposition R is anticipated to increase the district’s current $.39 debt service levy by $.39. For the owner of a $500,000 home (the approximate median value of a house in the Ladue School District), this would mean an estimated increase in property taxes of approximately $370.50/year, or $30.88/month. (Use the Tax Calculator below to determine the cost increase for a specific home value.)
Voters approve the total amount of the bonds to be issued – not the levy increase. The precise increase in the levy is dependent upon a number of factors, with the primary factor being changes in overall district property assessments. The district sets the levy each year based on the funds required to repay the bond debt. Therefore, increases in overall assessments decrease the required levy, while decreases in overall assessments raise the levy.
Additional Sources of Funding
The Ladue Education Foundation
The Ladue Education Foundation (LEF) is in the process of raising private and corporate funding for the project and has nearly $2 million in pledges to date, with plans to continue fundraising throughout the construction cycle. To learn more or to donate, go to the Ladue Education Foundation website.
Sale of Property on Clayton Road
Proceeds from the sale of the former Ladue Early Childhood Center on Clayton Road are also earmarked for district improvements. While the district had originally hoped proceeds from this sale might be available in time to directly offset the cost of the project, the current plan is to use these funds at a later date to assist with projects not included in the bond referendum.
Savings from the Reduction of Operating Costs
It should also be noted that a major renovation of the existing facility is anticipated to reduce operating and maintenance costs for the high school. A renovated high school is projected to reduce operational and maintenance costs by approximately $295,000 per year for at least the first five years after completion — for a potential savings of up to $1,475,000.
Calculating Your Increase
Increases to a homeowner’s annual individual property tax can be calculated using the formula below. Please note:
- Appraised Value is the amount St. Louis County determines a home is worth or for which a home could be sold.
- Taxable Value (or Assessed Value) is the amount upon which taxes are calculated and is equal to 19 percent of Appraised Value for residential property. (A home with an Appraised Value of $100,000 would have a Taxable Value of $19,000.)
- Taxes are levied per $100 of the Taxable (Assessed) Value.
- For bond referendums, the district is requesting support for a specific total amount of funds to be raised, not for a specific increase in the existing tax levy. The estimated increase in the levy is $0.39 and this is what is reflected in the example and Tax Calculator below.
Appraised Home Value x .19 divided by 100 x levy increase.
Example for a home appraised at $500,000:
$500,000 (home value) x .19 divided by 100 x $.39 (levy increase) = $370.50/year ($30.88/mo.)
Notes on Current District Financials and Tax Status
- The Ladue School District has a AAA rating from Standard and Poor’s and is one of the few public school districts in Missouri, and one of less than 100 in the nation, to hold this designation.
- Six School Districts in St. Louis County spend more per student. In 2014, the Ladue School District spent $12,569.24 per student (as reported by the Missouri Department of Elementary and Secondary Education), nearly $5,000 less per student than the highest-spending district.
- The Ladue School District continues to have the lowest operating tax levy in St. Louis County at $3.1675. Please note that the Ladue School District is made up of all or part of 10 different municipalities, with 60 percent of the district lying outside the City of Ladue.
- In 2014, the Ladue School District had the seventh-lowest debt service levy in St. Louis County and was utilizing 34.29 percent of the district’s allowable bond debt limit, as defined by the state. Out of 22 districts in St. Louis County, 15 have higher debt service levies and only eight are using lower percentages of their allowable debt. With the passing of Proposition R, approximately 74 percent of the debt limit will be utilized, ranking the Ladue School District in the middle when compared with other public schools in St. Louis County.
- In 2014, the Ladue School District had the lowest combined operating and debt service levy of any school district in St. Louis County and will still have the lowest combined tax levy, even with the passing of Proposition R.
- Since 2012, the district has operated under a 2 percent expenditure increase parameter as set forth by the Board of Education in order to prolong the need to ask the community for additional tax dollars to support day-to-day operations. Even assuming assessments continue to remain flat, it is anticipated this practice will allow the district to remain financially stable without asking voters for an increase in the operating tax until at least 2020.
- Ladue School District taxpayers are now protected by the Hancock Amendment. When voters approved an operating tax increase in 2012, bringing the district’s total operating levy over $2.75, the district automatically became subject to the Hancock Amendment. This means that in any year property assessments increase more than the Consumer Price Index (CPI), state law requires school districts to lower their levies so the total tax dollars collected do not exceed the previous year’s collection, plus the CPI or 5% – whichever is lower. (New construction is the only exception.) Simply stated… Regardless of how much individual property assessments increased in the last cycle, the district can only increase total operating revenue paid by district taxpayers for the 2015-16 school year by last year’s CPI, or .8 percent.
- Bond refunding has saved taxpayers over $2 million. Through a process allowing the district to refinance taxpayer-approved bond issues into lower interest rates, $18,995,000 in bonds were refunded in October 2014 with a total district savings of $2,176,522 over the remaining life of the issue. (This did not require extending the length of the repayment.) The bonds were sold by location institutions and local residents were given the first opportunity to purchase them.
- New compensation strategies and structures have been implemented in the last two years. During the course of the last two years, salary structures have been put in place for certified staff, support staff and administrators. The primary goals have been to rectify salary inconsistencies, to align employee salaries with those in comparable districts, to implement a process capable of maintaining a fair and equitable system going forward, and to improve budget forecasting.