School board sends wrong message with approval of tax rates, Franz says

Good stewardship will build public’s trust, Powers says

By Kari Williams

The Mehlville Board of Education showed taxpayers it wants to control their checking accounts by voting to establish the district’s 2012 tax rates as presented, according to board member Rich Franz.

The school board voted 4-3 last week to establish the following tax rates:

• Residential, $3.6494 per $100 of assessed valuation, down from $3.6634.

• Agricultural, $4.0920, up from $4.0897.

• Commercial, $3.5716, up from $3.4372.

• Personal property, $4.0081, up from $3.9678.

The district’s “blended” rate, which is not levied but used for state calculations, increased to $3.6827 from $3.6661.

Board President Venki Palamand, board Vice President Elaine Powers, board Secretary Larry Felton and board member Ron Fedorchak voted in favor of the proposed rates. Board members Kathleen Eardley, Mark Stoner and Franz were opposed.

Franz told the board it had an opportunity to send a positive message to the community that the board and community are “all in this together,” that they trust each other and that the board is moving the district forward.

“(By approving the proposed tax rates) you’re sending that message to the community that their checking accounts belong to the school board, and that this school board will take every penny they can at every opportunity and they’ll worry about the confidence of the taxpayers later,” he said.

Before Powers moved to approve the presented rates, Franz made a motion — seconded by Stoner — to leave all rates at 2011 levels except for residential. Franz’s motion was defeated 4-3 with Stoner, Franz and Eardley voting in favor.

District revenue would have decreased roughly $500,000, or 0.05 percent, for the current year and next year if Franz’s motion was approved.

Fedorchak said within the past year the board has “come to the realization” it wants to build an auditorium, wants a five-year facilities plan and approved step increases on the teachers’ pay scale.

“If we cut a million dollars out of the budget, the first thing that’s going to go is on the operations side …,” he said. “So anything that we do is going to undo some of the things that we’ve done. It’s going to make it very difficult to proceed with those things.”

Jim Murphy, Eardley’s father, addressed the board, stating he had additional questions, which he discussed with Eardley, regarding the tax rate after attending a recent Finance Committee meeting. Eardley corresponded with Chief Financial Officer Noel Knobloch regarding Murphy’s concerns.

Knobloch told Eardley via email the district’s budget was approved under the assumption “that the maximum allowed amount would be levied.”

“… Most alarming is the revelation that the school district prepared and approved a budget while making an assumption that this tax was going to be raised all the way up prior to this public hearing, and I find that insulting to the taxpayers of Mehlville,” Murphy told the board.

Superintendent Eric Knost said to assume the district will levy “what the voters approved” after years of making cuts “seems like an appropriate assumption to make.”

“The voters have approved a ceiling of $3.75, and I think we need to keep that in mind,” he said.

The voter-approved ceiling goes back to the mid-1980s, according to Knobloch.

Franz said the phrase “voter approved” implies that current residents and taxpayers are responsible for the ceiling.

“When the voters approved that (tax-rate ceiling) it was a different world,” he said. “We weren’t sitting on an $18 million surplus, which this board has agreed will not go below $13 million … I think that level was approved by the voters a long time ago and to suggest to these folks they’re responsible for the decision that was made … I think is disingenuous.”

Knost said his point was in response to Murphy’s comment about assuming the district should build a budget based on the maximum amount it can tax.

“Because that’s what we’re afforded and when we’ve cut, cut, cut, and the board has made conscious decisions to deficit spend potentially down to that $13 (million), then it only makes sense …”

Knost also said rolling back the residential rate 1 cent on a roughly $150,000 home saves the taxpayer $2.85 and costs the district $117,000. To roll back the commercial rate 1 cent on a $500,000 business saves the taxpayer $16 in a year and costs the district $29,000. In personal property, using a “Blue Book” value of $9,000 on a vehicle saves the taxpayer $3 and costs the district $24,000.

“I want to be careful we’re not touting … we’re doing some great favor to the taxpayers by giving them back what most likely is going to be the equivalent of not a whole lot of money …,” Knost said.

However, Franz urged the board to “send a message to the taxpayers that we do not consider their checking accounts our property.”

“Let’s tell the taxpayers that we trust them and that we expect them to trust us and we’re going to give that money back to them,” he said. “So, in two or three years when we have to — assuming we have to — ask them for a bond issue or even a tax increase, they’ll have the confidence in us that we’ll do the right thing with their money, and they’ll support us on that.”

But Powers said that confidence is built by “being good stewards of what we have.”

“It seems backward to me to say, ‘Let’s take less and then figure out later if we need to go back for more,’ which is kind of what I just heard you say,” Powers said.

The district currently has a roughly $18 million surplus, which Knobloch told the board could take care of a loss of revenue “for a short period of time.”