- Rockwood School District
Rockwood Plans for Dedicated Annual Maintenance Project Fund
The Rockwood School District is committed to continuing responsible stewardship of our community’s tax dollars. One of the goal areas in The Way Forward, the district strategic plan, is to cultivate an environment of efficient and effective business operations, school facilities management, programming and fiscal responsibility.
To that end, Rockwood Chief Financial Officer Paul Northington presented a plan to the Board of Education at the Sept. 16 meeting that would establish a dedicated funding source to pay for the annual maintenance needs of district buildings.
These cycle maintenance needs -- such as roofing, flooring, parking and HVAC improvements -- are currently funded through bond issues approved by Rockwood voters. While Rockwood may need to seek bonds to fund large projects in the future, the establishment of a dedicated maintenance fund would allow the district to perform needed updates on an annual basis without using borrowed funds.
“We would be able to transition to a pay-as-you-go method of funding school maintenance projects,” Northington said. “This plan allows the district to be more efficient with the tax dollars we receive because it eliminates interest costs. It also allows for more long-term planning for capital projects.”
Northington presented a four-step process that will allow Rockwood to reduce its debt and transition facility maintenance to a pay-as-you-go method:
- Step 1: continue to pay down the existing bond issue debt. Rockwood has a refunding opportunity on its 2016 bond issue in February 2022, which will allow the district to pay off the bonds three years earlier than anticipated and save approximately $4 million.
- Step 2: layer the debt as the district continues to address needed facility improvements, making it so the principal and interest payments are made at a lower tax rate.
- Step 3: ask for voter approval to move cents from a lowered debt service rate into our dedicated building/capital projects fund. This will not increase the tax rate.
- Step 4: after voter approval, these funds will be moved into a building fund for annual cycle maintenance needs.
“Following these four steps, we’d have the ability to schedule projects out five to 10 years in the future, allowing for greater long-term planning,” Northington said. “The dedicated source of revenue in the building fund will allow cycle projects to be completed without borrowing, eliminating interest costs and making it so that all of the tax dollars can be applied to projects.”
Rockwood initially planned to move its debt service tax rate from $0.68 to $0.41 in 2025-2026, then to $0.14 in 2026-2027. Improved economic conditions and the district’s efficiency in paying down its existing debt have allowed that timeframe to move up, providing for a lowering of the debt service rate from $0.68 to $0.50 in 2022-2023, then to $0.14 in 2026-2027.
In April 2022, Rockwood will ask the voters to approve an operating tax rate increase of $0.54. If approved, that $0.54 rate will move from debt service to the capital project fund, resulting in no change to the overall tax rate. Those funds can then be used for technology and facilities cycle maintenance starting in the summer of 2023.
“We understand that spacious, well-maintained schools are needed to equip students with the tools for success,” Northington said. “While we may need to issue general obligation bonds for large, special projects in the future, ongoing costs for cycle maintenance needs will be funded from annual revenue sources instead of borrowing.“
Rockwood’s fiscal integrity earns top honors for its efficient and effective budgeting. This includes a AAA rating from Standard & Poor’s, a recognition earned by only four school districts in the state of Missouri.