Impact of reassessment to be factor in discussion of Mehlville’s finances

State and federal mandates constrain budget, Diehl says


With Mehlville School District staffing being discussed this week as part of the district’s public-engagement sessions, officials already are eyeing a key topic to be presented next month — finances.

The district’s finances and resources will be discussed during a Dec. 10 community-engagement session as part of the public-engagement process COMPASS — Charting the Oakville-Mehlville Path to Advance Successful Schools. The session will take place at 7 p.m. at Bernard Middle School, 1054 Forder Road.

One aspect of Mehlville’s finances to be discussed next month is the district’s tax rate for the 2007-2008 school year and its subsequent effect on residents who recently saw their property taxes increase due to reassessment.

Members of the COMPASS Facilitating Team — comprised of residents, employees, school-board members and students — agreed last week that the recently increased reassessment should be kept in mind during the upcoming financial presentation, slated to be prepared by Mehlville Chief Financial Officer Brent Bell.

“The one thing we don’t want to lose sight of here is we all got our real-estate tax bills here in the last week or so,” Facilitating Team member Paul Goldak said at an Oct. 29 meeting. “And we all know what the change has been. And my tax bill went up 6 percent. I’m going to pay 6 percent more money in, and a large part of that goes to the school district. So the school district is going to get more money from me and from all of us I suspect. Where is that money going to go? What’s it going to be used for?”

While residents are seeing higher property-tax bills, Superintendent Terry Noble said it is important to remember that not all of that property-tax increase goes to the school district.

“The district got 2.5 percent of that 6 percent,” Noble said. “The rest of it was because you were assessed higher than the average in the county. I had a call the other day asking if they want to know if that’s coming to us … That misconception’s out there that all these increases are coming to us. And they’re not.”

In August, the Board of Education reduced the district’s blended tax rate from $3.6443 per $100 of assessed valuation in the 2006-2007 school year to $3.2731 per $100 in the 2007-2008 school year to help offset reassessment. Despite that tax-rate rollback, the school district still is projected to see $2,719,285.34 in new tax revenue during the 2007-2008 school year from reassessment and new construction.

To allow residents who attend the Dec. 10 community-engagement session to have a clearer picture of the district’s finances, Facilitating Team member Keith Benack suggested that Bell differentiate the district’s “discretionary” and “mandated” expenses.

“Give them an illustration of income streams — all of it,” he said. “And then branch off from that income stream what is mandated and what is discretionary. What in our program is discretionary and what is mandated based upon that. And I think that would kind of be an easy picture.”

At the same time, Facilitating Team co-chair Dan Fowler — a former school-board member — noted the district’s discretionary spending likely is very limited.

“I’ve got to believe that discretionary spending in the Mehlville School District is really small,” Fowler said. “I mean, 85 percent of the budget is teacher and employee salaries and benefits … then you get into buildings, maintaining buildings … and things mandated by the state and federal government. I’ve got to believe that your discretionary income, it’s probably less than a single digit.”

Board of Education President Tom Diehl, who also serves on the Facilitating Team, said before he was elected in 2006, he didn’t realize how much of the district’s budget is tied to federal and state mandates.

That, he believes, should be explained at the Dec. 10 session.

“There are federal and state mandates that we are obliged to meet where basically you’ve got the equation where about 15 percent of our income is mandating and dictating three-quarters of how our budget is spent,” Diehl said.

Before next month’s session on finances, Goldak suggested that district officials determine a key question of finances — whether the district’s income drives expenses or whether expenses drive its income.

“We know that there are certain amount of fixed expense,” he said. “Teacher salaries are fixed expenses. But if you don’t have enough students, you don’t have as many teachers. And that expense goes down. So what’s the driving force? We have a tax rate, which generates a certain amount of income, which I believe we spend ideally to the penny. So are we driving expense by what we have in income? Or are we driving income by what we have in expense? We have too many expenses, we ask for more money sometimes. So to me, at the highest level, you’ve got to make that distinction, that balance between this is what we think it takes to run the district and this is what we think we’ve got in the way of income. And there’s a match or there’s not a match. And we can address our mismatches by changing our expenses or changing our income.

“And I think if you start with that perspective and say how do we change our expenses, we can build more buildings. We can reduce teachers. We can add programs. We can drive income. We can increase or decrease taxes. We allocate the funds in there.

“So I think people immediately think, ‘Oh, they’re going to ask for more money.’ What does it take to run the district? And are we good stewards of that expense side of the district? And if we can justify the expense side, then people will realize, ‘Oh yeah. The income is necessary to justify that expense.'”

But besides pondering those questions about the district’s current expenses, Fowler said the district should also consider what extra costs it would take to raise the district’s academic performance

“What does it take to run a school district that’s performing in an outstanding fashion, which Mehlville is not doing right now necessarily,” Fowler said. “But what does that take? What are the finances? For example, do we want to keep our same level of teachers with lower enrollment so that we have a better student-teacher ratio? That’s a decision we haven’t made yet.”

“But those are all challenges that you throw out to the audience,” Goldak said.

Dan Burns of UNICOM•ARC, the firm hired by the district to organize COMPASS and assist in the district’s public-relations department, said as the primary goal of COMPASS is to determine what residents want for the future, many future expenses must be adjusted according to those wishes.

“Remember we’ve put in context what we’re doing here from day one,” Burns said. “Here are building blocks. Now when it’s all said and done, what do you want this district to look like in the future? And what it looks like in the future will help define what investment it takes.”