A Dedicated Funding Source for School Maintenance
As a district, we’re planning for a dedicated funding source to pay for the annual cycle maintenance needs of our schools. While we may need to issue general obligation bonds for large, special projects in the future, ongoing costs, such as roofing, flooring, parking lots and HVAC, would be funded from annual revenue sources instead of borrowing funds.
Rockwood looks to fund this type of school maintenance without increasing the tax rate or issuing a bond issue referendum. It’s a long-range plan that will shift bond issue funds to the building fund.
What are the benefits?
Rockwood would be able to transition to a pay-as-you-go method of funding school maintenance projects. The plan allows the district to be more efficient with the tax dollars it receives because it eliminates interest costs and allows for more long-term planning so key infrastructure components can be replaced as they reach the end of their useful life.
What is the long-term financial plan?
Rockwood has a four-step plan to reduce debt and maintain the district’s facilities on a pay-as-you-go method.
STEP 1: Continue to pay down our existing bond issue debt.
STEP 2: As the district addresses ongoing capital improvements,the debt will be layered so the total principal and interest payment can be made with a lower tax rate.
STEP 3: When the tax rate is able to be lowered by 54 cents, we will ask voters for permission to move these cents into our building fund, dedicated to the maintenance of our facilities. This move will not increase the tax rate.
STEP 4: After voter approval, these funds will be moved to the building fund in order to pay for annual cycle maintenance needs.
What is the timeline?
Financial experts estimate the district will be able to lower the debt service tax rate from 68 cents to 41 cents in 2025-26 and then 14 cents (54 cents below the current rate) in 2026-27. At that time, a tax rate increase of 54 cents can be proposed for the building fund leaving the total rate unchanged. As we make progress toward this long-range plan, Rockwood will continue to issue bonds for critical needs and special projects. Prop T is part of this long-range financial plan, as we respond to current needs, while keeping on track for this long-range financial planning.
What will happen after the transition?
The district would have the ability to schedule projects 5-10 years ahead, allowing for greater long-range planning. The dedicated source of revenue in the building fund will allow cycle projects to be completed without borrowing, which will eliminate interest costs so 100% of the tax dollars can be applied to projects. We understand that spacious, well-maintained schools are needed to equip students with the tools for success.
Rockwood: A Responsible Steward
Rockwood continues to be a responsible steward of the community’s tax dollars. Our fiscal integrity earns the district top honors for its conservative, prudent budgeting. This includes a AAA rating from Standard & Poor’s, a recognition earned by only four school districts in the state.