The Platte County R-3 School District’s Citizens Advisory Committee (CAC), formed in the wake of the District’s tax levy increase defeat at the polls last year and charged with helping District officials determine how to manage projected student population growth, does not have to make a recommendation — yet. But, after a meeting Monday night that painted an informational picture of the District’s financial situation, that point in time does not look very far away.
“At some point soon the CAC is set to wrap up and put some findings forward,” said Platte City businessman and CAC member Chris Donnelli. “I feel comfortable that the District will schedule additional meetings if we can’t get the topics covered rigorously, so I don’t think we are quite in ‘crunch time,’ but that day may be coming in the near future.”
Monday night’s meeting was attended by about 20 members of the CAC, which is comprised of community members and professionals, District teachers, and several R-3 administrators, including Superintendent Dr. Mike Reik and Assistant Superintendents Dr. Rob Gardner and Dr. Mike Brown.
Previous meetings had involved CAC members identifying some issues of concern and reasons why the 60-cent tax levy increase proposal was shot down by area voters in April 2012 and a broad overview of District enrollment projections and the need for a definitive growth management plan. Those projections showed an increase of student population from its current 3,700 to more than 5,000 by the 2019-20 school year.
Monday’s meeting focused on the District’s financial picture.
Reik said the District’s annual revenue is derived mostly from its property tax levy of $4.52 per $100 of assessed valuation. The District’s assessed valuation is $424 million, its 2012-2013 budget is $37.7 million and the District has $5.9 million in reserve. Reik gave a PowerPoint presentation which showed that the District’s total debt was $76.8 million, $72 million of which comes from voter-approved bond issues that were needed to build facilities, etc. About $4.2 million of that debt is from lease-purchase arrangements that were used to fund Pirates Stadium improvements years ago and a portion of the District Education Center’s recent purchase and renovation.
Reik also discussed the District’s AA bond rating. There are only two ratings higher — AA+ and AAA —and only nine districts total statewide with either one of those ratings. Based on the District’s rating, its current debt and state legislation that prohibits public school districts from borrowing more than 15 percent of their assessed valuation, Reik said the District’s bonding capacity is about $4 million. District estimates place the amount of a new school such as the one proposed in last year’s levy increase issue at about $15-17 million.
District financial advisor Greg Bicker, of George K. Baum Company, said it is not likely the District can raise its bond rating to AA+ or AAA.
“Getting to AA+ or AAA would be based on factors beyond the District’s control, such as demographic factors like wealth of its patrons,” Bricker said. “Having an AA rating with the District experiencing such growth is — in my opinion — a testament to sound financial management.”
Reik then talked about the tax levy increase itself and a possible sunset, or expiration, date.