South St. Louis County News

St. Louis Call Newspapers

South St. Louis County News

St. Louis Call Newspapers

South St. Louis County News

St. Louis Call Newspapers

Mehlville’s reserves projected at 10 percent in ’17

District has ability to refund 2004 COPs at end of 2013

Though projections place the Mehlville School District’s reserve funds at slightly more than 10 percent in 2017, Superintendent Eric Knost said he does not want anybody to “latch on” to that projection.

“Please realize that’s 2017 — all of (Chief Financial Officer Noel Knobloch’s) assumptions going all the way out — we’re doing everything exactly as we are now,” Knost recently told the Board of Education. “… If I’m superintendent here at that time, I have no intention of having a balance below 13 percent, and I think that that small variance over that many years — I hate to belittle it — but I think (it’s) easy to control.”

Knobloch presented updated projections to the Board of Education at its Jan. 10 meeting. Projections show the district’s reserve funds through 2017 as follows:

• 20.87 percent in 2013.

• 22.23 percent in 2013.

• 21.46 percent in 2014.

• 19.12 percent in 2015.

• 15.68 percent in 2016.

• 10.58 percent in 2017.

Knobloch said there are “many factors” the board can change to alter the reserve projections and the only purpose of a forecast is to give “an idea of where you may be.”

“Even if something does go wrong … you’ve got two or three years to adjust the rest of the expenses …,” he said.

Board member Mark Stoner said he feels uncomfortable with the district holding “the 20-plus percent balances.”

“I do believe it’s the taxpayers’ money and I’d rather have it in their wallet than our wallet …,” he said. “When we start to fall down below — and I think we’ll find this next year — when we start to hit that projection in ’16 and ’17, as a board I would just challenge us to take a look at that. I am not comfortable falling down to a 10-percent balance.”

Knobloch told the board his projections show the district has “a lot of flexibility” and “a lot of changes can still be made in that four- or five-year period in regard to all of these assumptions.”

“It shows that we’re on pretty firm footing for the next four or five years …,” he said.

The projections include funding the one-to-one technology program and the five-year facilities plan.

“There are some options as you go out to 2017, general obligation debt will be paid off then so there’s a possibility that you could have a no tax-increase bond issue in 2017 and raise some money for capital needs without increasing the tax rates,” Knobloch said.

Increases in personal property gave the district a $14 million increase over what was expected, Knobloch said, and the other “main revenue item” is sales tax from the state.

“They give us an estimate each year based upon the weighted average daily attendance. That is the barometer they use to make the payments. They’re projecting that at $843 …,” he said. “Those are projections; we still haven’t collected all of that. So when we start talking about the budget for next year in March and April (we’ll) have a better feel for that …”

On the expense side, Knobloch said because the year is only halfway through, there are “a lot of unknowns,” but there will be a roughly $800,000 savings.

One request from the October board meeting was to see how the budget would look under a three-tier bus system, as opposed to the four-tier system currently used.

“While that decision hasn’t been made, I factored that into these projections leasing a certain amount of buses to get us back to the required capital that we would need in order to go to that …,” Knobloch said.

It would cost roughly $140,000 per year to lease 10 to 12 buses for a seven-year period, and an “additional amount after that to basically replenish the bus fleet,” according to Knobloch.

Additionally, the district has the ability, according to Knobloch, to refund its 2004 certificates of participation, or COPs, at the end of this year.

“Because of early call provisions, which were included in the 2010 and (20)11 COPs, which were just issued a couple years ago, we also have the ability to call those, which is something that’s pretty unheard of,” Knobloch said, “but it gives us the flexibility to basically reissue those bonds …”

Knobloch wrote in information provided to the board that “the current low interest rate environment will save the district approximately $170,000 per year over the remaining seven years that the COPs will be outstanding.”

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