Lindbergh board plans to vote June 8 on whether to seek tax-rate increase

CFO says public not aware of challenges facing district.

By MIKE ANTHONY

The Lindbergh Board of Education plans to vote Tuesday, June 8, on whether to place a tax-rate increase on the November ballot.

During a budget workshop last week, board members agreed by consensus to vote June 8 on whether to seek a tax-rate increase in the Nov. 2 election. While some board members indicated May 18 they had a potential amount they would consider asking voters to approve, they agreed to discuss and formulate the exact amount of any potential tax-rate increase at the June 8 meeting.

During the workshop, Chief Financial Officer Pat Lanane noted that much of the groundwork for the district’s proposed 2010-2011 budget had been laid in March when the board voted unanimously to give final approval to more than $4.7 million in reductions. The board’s action eliminated 60 positions, including 45 teaching positions. But even with the $4.7 million in reductions, the district still faces a more than $3.9 million budget shortfall next year.

The district’s long-range financial plan calls for a spend down of its $24.9 million in reserves with a deficit-spending cap of $3 million per year. In June, the school board adopted a 2009-2010 operating budget that projected a deficit of $3 million. That $3 million deficit was reached by making more than $2 million in reductions for the current school year. But a further decline in the assessed value of commercial real estate — including successful appeals by commercial property owners to the county Board of Equalization — coupled with cuts in state funding increased the projected budget deficit for the current school year to more than $6.6 million.

Officials plan to further utilize district reserves to cover the increased deficit, and projections indicate those reserves will drop to roughly $18.3 million at the end of the current school year. If reserves fall be-low roughly $13 million, the district would have to borrow money to operate.

Lanane also elaborated on the results of a recent telephone survey conducted by Patron Insight of Stilwell, Kan. The results were presented to the school board May 11 by Ken DeSieghardt of Patron Insight. A total of 400 registered voters in the district were interviewed for the survey, which carries a margin of error of plus or minus 5 percent.

Fifty-eight percent of survey respondents said they would support a tax-rate increase that would cost the owner of a $200,000 home $95 per year. Forty-eight percent of respondents said they would support a tax-rate increase that would cost the owner of $200,000 home $152 per year while 43 percent of respondents said they would support a tax-rate increase that would cost that same homeowner $209 per year.

The $95 per year increase would equal a 25-cent tax-rate increase, the $152 per year increase would equal a 40-cent tax-rate in-crease and the $209 per year increase would equal a 55-cent tax-rate increase.

“… The survey has very mixed results,” Lanane told the board. “I’ve had a chance now to look at it many more times and I believe there’s a little bit — I don’t want to say disconnect — but there’s a difference between what people think and what they believe on that survey. And I think I can show that on a number of the issues …”

For example, respondents gave the district high marks for the performance of teachers, quality of school facilities, performance of the superintendent and Central Office administrators, performance of the school board, value for the tax dollars spent and class sizes.

“… And it’s all wonderful. I mean if you were running a popularity contest, this is great, great news,” Lanane said. “Of course, that’s not what we’re running. But in every major category … What people think of our teachers. I think that is so keen that they cite that as the most highly rated aspect of the entire school district because that’s the one that’s most at risk. And so while they believe that, what we need for them to know is there’s a huge risk right now. This is the one that could change.

“I don’t think we have that. I know that doesn’t exist out there yet. It’s part of an information effort that we need to make …”

While Lindbergh is rated highly in the areas he cited, Lanane said he doesn’t believe the public is aware of the changes that lie ahead for the district as a result of its fiscal challenges.

“… It’s getting ready to change. Not even our parents understand the change that’s coming next year,” he said. “We’re still in that old world of where Lindbergh has been. And so one of the jobs I that see we have to do is continue to let people know about these things.”

Noting 100 percent of survey respondents strongly agreed or agreed with the statement: “A good school district is important to building and maintaining quality neighborhoods,” Lanane said, “… That’s a hundred percent. Getting a hundred percent on any question is almost impossible. But that tells you how highly they value it.”

Survey respondents also believe Lindbergh needs to have a sizable amount of money in reserves, even if it means paying more in taxes to protect those reserves.

“… They believe it’s really, really important to have re-serves. They actually tell you — 88 percent say you should have more than three months. Forty percent (say) more than a year. A year’s reserves would be $60 million. Three months that they think we should have is $15 million,” he said. “We’re getting ready to fall below that. So I’m not sure they’ll tell us to pass a huge, huge levy so we can save up $60 million. I don’t think that’s what they’re telling us. But they are saying it’s really important to have reserves and you better have some.

“We expect you to have some in abeyance so that when these kind of times visit us — and they have a tendency to visit every once in a while — you’re in a position that our kids don’t get hurt and our community stays strong. That’s what I think it says.”

Lanane later noted survey respondents indicated their desire that the district spend down its reserves before seeking a tax-rate increase.

“… I think they said spend them (reserves) first if you have them and we’re quickly getting to the point where they’re not there,” he said. “They’re certainly below the level that people expect us to have them.”

Lanane said he was concerned about the number of survey respondents who did not know that Lindbergh’s 2009-2010 blended tax rate of $3.1488 per $100 of assessed valuation is one of the lowest in the county and state.

“… Some people understand that we have a really, really low tax rate, particularly for suburban St. Louis County,” he said. “Some people still don’t quite get it. I mean 56 percent is not resounding to know that …”

Board member Mark Rudoff said, “… There’s only 10 percent that disagree (that Lindbergh has a low tax rate) and 35 percent didn’t know.”

Board President Ken Fey later said to Lanane, “You’ve done two things. You’ve kind of preached to the choir here, which is OK. That’s perfectly OK because we need to hear it, but you have identified exactly what you’re going to have to do for a tax-levy campaign. And exactly the points, exactly the ideas that you have to get across to this community …”

Lanane said, “… There’s some things they don’t know. And I think if they know that their community is in jeopardy — that’s the word that I think is appropriate here — what has made Lindbergh Lindbergh is in jeopardy …”

Rudoff later said, “… I went back through the survey that was presented. The thing that I will say disturbed me — and I will say really disturbed me the most — was the number of ‘don’t knows.’ And to me I don’t know that this is an issue where we have to change people’s minds or shake their preconceptions as much as it is the need to aggressively move out and try to inform them … Those that have opinions feel strongly one way or another. It’s those that do not have the opinions that we really need to make a special effort.

“How can we reach them? What do we need to do to get them to understand the state of — as we say the state of urgency and how the district’s in jeopardy so they understand that this is no longer a situation that we can put it off until next year and dip into the reserves. The time for action is rapidly approaching if not past us.”

Board members earlier had discussed how much tax-rate increases would generate if approved by voters.

Board member Janine Fabick said, “… When you look at this, Pat, the highest amount you have on here, it’s a possibility of a 75-cent tax increase, that doesn’t even get us back to all the cuts we made from last year and this year.

“We made $7 million (in cuts). I mean that doesn’t even get us back to everything we cut, much less give us anything to go forward with as far any kind of compensation with teachers, moving forward … We’re falling far behind. I mean it’s definitely something we have to address.”

Lanane outlined why he believes it is critical to keep teachers’ salaries competitive.

“… A teacher is the single most important educational tool we have. Everything else pales in comparison. You cannot have a great education without a great teacher,” he said. “And one of the things we’ve started to see is some of our great teachers, when they look at salaries $4,000, $5,000, $6,000 more at the same step and they’re only driving three miles down Lindbergh, well they’re going to look at their own families and say: Well, I love Lindbergh, but I’ve got to do what’s right for myself and for my family.

“So losing great teachers, we cannot overestimate how important that is. It will change the face of education in this school district and if the face of education in this school district changes, the face of this community changes,” Lanane said.

Citing a 75-cent tax rate increase, Fey later said, “… Mrs. Fabick just told you that’s not even going to get you back to where you’re supposed to be. So I just want everybody to understand that when and if we go for a tax levy, we’re really going to have to put some thought and some sense into what’s a realistic number? … We have to be realistic and when we do go out, we’re going to have to shoot a good number that we can live with.”

After further discussion, board members agreed by consensus to vote June 8 on whether to place a tax-rate increase on the November ballot with the potential amount to be discussed at that meeting.

“… Everything that Pat (Lanane) has laid out this evening, everything that we saw this evening, I as a board member can’t see it fit to sit on our hands and I think the time to move is now,” Fey said.