What is Prop 3?
- What is Proposition 3?
- What will it pay for?
- What percentage of the Capital Projects Fund will be spent on each of the three areas: safety, technology and facilities?
- How are safety and technology upgrades and facilities projects prioritized?
- What options do Missouri school districts have to fund capital improvements?
- How does Prop 3 fit into Rockwood’s long-term financial plan?
- What is the timeline for implementation?
- Is there a timeline for the projects and purchases associated with Prop 3?
Proposition 3, if passed, would authorize the district to increase the Operating tax levy in the Capital Projects Fund by $0.54 over two years. The district would concurrently reduce the Debt Service levy by $0.54, resulting in zero-tax-rate increase.
This zero-tax-increase levy transfer would be done in two phases over a two-year period, resulting in over $26 million in annual operating funds when fully phased in. Prop 3 would provide this dedicated annual funding source without issuing new bonds, which is a fiscally-responsible use of taxpayer dollars in the current interest rate environment.
Prop 3 will appear on the November 7, 2023 ballot and will require a simple majority (50 percent + 1) to pass.
The dedicated funds would be used for ongoing safety, technology and facility updates at every school (including Early Childhood, the Center for Creative Learning and the Pathways Wellness Center) as well as additional buildings like transportation and support facilities. Examples of ongoing updates include:
- Security cameras
- Security systems
- Radio communications
- Device upgrades for students and staff
- Cybersecurity and data protection upgrades
- Parking lots
These funds may NOT be used for daily operating expenses (i.e. salaries, utilities and supplies) or for new facilities or significant additions to existing facilities. Our cycle maintenance addresses 37 buildings that cover more than 3.8 million square feet across the district (the equivalent of three Busch Stadiums), all of which require maintenance on a regular schedule that costs approximately $30 million each year. The average age of our schools is 47 years old. There are only two schools that are less than 20 years old (Eureka Elementary and Fairway Elementary). Nineteen (19) schools are between the ages of 44 and 85 years old.
While the needs of our facilities as well as technology and safety will constantly change, we currently forecast that approximately 20% (or $6 million) of the Prop 3 transition of $0.54 cents will be allocated to technology for student, staff and infrastructure refresh when the transition is fully phased in and 5% (or $1.5 million) will be allocated to safety hardware and equipment needs. The remaining 75% (or $19.5 million) will be allocated to our facility cycle maintenance needs that would include, among other items, HVAC, roofing and hard surface paving. The allocations could certainly change between years based on the needs and priorities within these three areas.
When addressing safety needs and prioritizing safety, we carefully consider the impact on students and staff. We also look at areas where we have gaps. For example, our current radios do not have the capability to communicate outside of the school. Purchasing radios that would enable us to communicate across the district in an emergency, particularly in areas where we may not have optimal cell coverage, has been identified as a priority.
Technology expenditures are prioritized based on classroom technology equipment standards and the establishment of refresh cycles for staff devices, student devices and technology infrastructure. These standards and refresh cycles are created with input from the Rockwood community and established industry guidelines. For example, students in 5th grade typically receive new Chromebooks to use throughout middle school and students in 9th grade typically receive new Chromebooks to use throughout high school. That refresh did not happen last school year and will not happen this school year.
The Technology Department also researches current trends and new technologies that could enhance the learning environment for teachers and students.
This is done through an annual facilities review as part of our Five-Year Forward-Looking Capital Plan. Members of the facility and finance teams visit and visually inspect each building every fall and speak with building leadership about facility needs, which are subsequently prioritized based on a variety of factors.
For school districts, funding for the acquisition and improvement of capital assets is either in the form of issuing general obligation bonds (long-term debt) or having a dedicated operational tax levy in the Capital Fund. When a school district issues general obligation bonds, the district receives the proceeds of the bonds and agrees to pay back the bondholders, normally over the course of 20 years. Payments to the bondholders include the borrowing costs in the form of interest. When a school district has a dedicated operational tax levy in the Capital Fund, the district receives the levied taxes each year and has the ability to address its safety, technology and cycle maintenance needs without incurring interest costs.
This long-term plan was initially discussed in 2014, crafted in 2016 and embedded in the district’s strategic plan, The Way Forward, in 2018.
The zero-tax-rate increase levy transfer has been a part of a four-step plan to reduce debt and maintain the district’s safety, technology and facilities on a pay-as-you-go method. We are currently at STEP 3, and the passing of Prop 3 authorizes the district to proceed with STEP 4.
- 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, we will ask voters for permission to move these cents into our building fund, dedicated to the upkeep of safety, technology and 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 safety, technology and facility needs.
If passed by voters, 36 cents would be moved from Debt Service to Capital Projects in tax year 2024, and 18 cents would be moved from Debt Service to Capital Projects in tax year 2025. In the first year, this transfer would generate approximately $17 million for safety, technology and facilities. The following year, once the transfer is fully phased in, the annual amount generated for cycle updates and maintenance would be approximately $26-27 million.
This would be accomplished without raising the district’s tax rate.
If passed, Prop 3 would be phased in over a two-year period beginning with tax year 2024 (generating approximately $17 million) and ending with tax year 2025 (fully phased in, generating approximately $26-27 million each year moving forward), allowing the district to address ongoing technology, safety and cycle maintenance needs without raising taxes.
Returning to a cycle of technology and safety refreshes and upgrades would be part of the annual use of these funds beginning with year one. From a facility cycle maintenance standpoint, our facilities team evaluates each building's needs every year with building administration, updating the priorities at each building.
The priority projects that are on each school’s website are the current priorities that the passage of Prop 3 would allow the district to begin addressing. However, each year, those priorities and the timeline of when a project is completed may change for a variety of reasons.
In addition, if Prop 3 passes, collections in the Capital Projects Fund would not begin until December 2024. Facility maintenance projects, such as HVAC and roofing replacements, are normally completed during the summer when students are out of the building, so the first year of facility projects would likely not begin until the summer of 2025.
On May 18, at the Capital Planning Work Session, a presentation to the Board included this slide (see below) which generally outlines the allocation of funds for the first year (2024/2025).
Again, as we evaluate the needs in our buildings on an annual basis, this list may need to be adjusted. Please know that if Prop 3 passes, we will be sharing details on the district website as to the list of annual projects funded, beginning with year one, which will be the 2024/2025 school year.