PROPOSITION K.I.T.S.

Shall the Board of Education of the Strasburg C-3 School District, Missouri, be authorized to increase the operating tax levy by $0.6400 to $4.4735 per one hundred dollars of assessed valuation for the purposes of attracting and retaining quality certified and support staff, maintaining facilities, and meeting additional operating expenses?  

If this proposition is approved, the adjusted operating tax levy of the District is estimated to increase by $0.6400 from $3.8335, currently, to $4.4735 per one hundred dollars of assessed valuation for the 2025 Tax Year and can be applied to the assessed valuation for each year thereafter. The District intends to reduce the debt service levy by $0.6400 per one hundred dollars of assessed valuation in order to offset the estimated $0.6400 increase to the operating levy if this Proposition is approved by the voters, resulting in the total tax levy of the District to remain unchanged.

HOW STRASBURG C-3 PROPOSITION K.I.T.S. AFFECTS YOU

Inflation is driving up the costs of almost everything.  Whether it’s groceries, utility bills, mortgage rates, insurance costs, or just the cost of a cup of coffee, our families are burdened by the rising prices of essential goods and services.  School districts are also experiencing rising costs of essential services as well as mandated salary increases that have been passed by recent legislation (Senate Bill 727), and the last thing our families need is for our school district to ask for a higher tax rate to help with those increases.  This is why the district has placed Proposition K.I.T.S. on the April 8th ballot.  The Strasburg C-3 tax levy has remained $5.4748 per $100 of Assessed Valuation of property since 2020 and was $5.4700 per $100 of Assessed Valuation from 2009 until 2019. Proposition K.I.T.S. will not change the levy or the amount of taxes the taxpayer pays.

To meet the demands placed on the school’s operating budget by inflation and rising costs, the district has evaluated the overall budget and it has been determined that the portion of the levy designated for debt services can be lowered while still efficiently meeting requirements for bond payments.  Therefore, to avoid asking the voters for an increase in taxes to assist in higher operating costs, the proposition on the ballot is asking voters to allow the district to utilize .64cents of the $5.4748 total levy that is currently designated for debt service and move it to the operating levy, and therefore not requiring an increase to the total tax levy.  This is similar to an individual taking a paycheck and initially splitting it into two different accounts, and then after reviewing all the bills, the individual realizes that one account could run a little short.  Instead of asking the boss for a raise to cover that shortage, the individual transfers money from that second account, leaving both accounts in good standing without requiring a raise.  This is what the approval of Proposition K.I.T.S. would allow: money transferred from one account to another, where it would have a greater impact.

The following is an example of how Proposition K.I.T.S. would affect an individual who owned a home valued at $150,000 on the market.  In Missouri, residential property is assessed at 19%.  In this example, the assessed valuation of that home would be calculated by multiplying the home’s value by 19%.

$150,000 x 19% = $28,500 = Assessed Valuation of the home

The district levy is $5.4748 per $100 of assessed valuation, so the taxes on the home would be calculated as follows

$28,500 divided by $100 = $285

The $285 would be multiplied by the tax rate of $5.4748

$285 x $5.4748 = $1,560.32

This taxpayer would pay $1,560.32 in property taxes on the home.

The following chart demonstrates how the district would utilize those funds with and without Proposition K.I.T.S's approval.  The proposition only affects how the district utilizes the funds, not how much the district receives from the taxpayer.

As can be seen in the table above, if the operating funds and debt service funds are totaled in each example, the total tax bill stays the same at $1,560.312. However, the amount in the district's operational funds is increased while the debt service is decreased, which would allow more of the district’s funding to be utilized for district operations.

This Proposition is designed to more efficiently utilize the funds the district already receives, rather than asking for a raise in the tax levy from a community that is already struggling with increases in the cost of living.  Please remember to vote on April 8, 2025, and remember that Proposition K.I.T.S. is Keeping It The Same (tax rate).

What Makes Up Our Tax Rate and How Would it Change?

The District’s total tax levy consists of up to four rates, one for each of its funds. Under Missouri law, tax dollars collected in each fund can only be used for that fund's purposes.

·         Funds 1 & 2 (Incidental and Teachers Fund) provide resources for the district's daily operations, including payment of salaries and benefits for employees, student transportation, curriculum resources, utilities, insurance, student activities, and other general operating costs.

·         Fund 3 (Debt Services) provides funding to pay interest and principal on the District's debt (bond issues).

·         Fund 4 (Capital Projects) provides funding to maintain and refresh the District's facilities and equipment

These funds result in a total tax rate of $5.4748. This levy has remained unchanged and will remain at $5.4748 with the approval of Proposition K.I.T.S.

Why does the district no longer require as much money in the Debt Service levy?

Lowering the debt service levy is part of our long-term strategy to address the Board of Education’s fiscal expense priority list and district goals while remaining fiscally responsible. This has been made possible because of strategic refinancing of debt, prepayment of debt, and continued growth in assessed valuation. Lowering the District’s debt service levy will not change the terms or rates of previously issued debt. Because of forecasted increases in assessed valuation and responsible long-range facility planning, the District will continue to have adequate funds to cover its existing debt and be positioned to implement its long-range facility plan and the potential for future propositions for facility maintenance and improvements without a“tax rate”increase.

By reducing the debt service levy, does it extend the time required to repay or increase the amount of interest the Strasburg C-3 School District will pay on our current debt?

By reducing the debt service levy, the District will be able to address identified Board of Education priorities, including, but not limited to, staff compensation and retention, without an overall tax rate increase. The reallocation of funds will not jeopardize the District’s ability to pay its current debt, nor will it change the terms or rates associated with current debt.

When you talk about strategic refinancing of the District’s debt, what does that mean?

The Strasburg C-3 School District is proactive in looking to reduce its interest cost in the form of refunding if the interest rate environment is favorable to do so. “Refunding” of school district bonds is similar to a homeowner’s mortgage refinancing. The district has saved $201,663.00 in taxpayer dollars in refinancing since 2009. Here are some examples of savings from past refunding:

·         2003 General Obligation Bonds (GO) Refunding-Saved $20,948.00

·         2017 General Obligation Bonds (GO) Refunding – Saved $180,715.00

When you talk about prepayment of the District’s debt, what does that mean?

The Strasburg C-3 School District is proactive in looking to reduce its interest cost in the form of prepayment. “Prepayment” of school district bonds is similar to a homeowner making a large payment on the principal balance of their mortgage. A “Prepayment” also raises the District’s bonding capacity. The district has saved $84,525.00 in taxpayer dollars due to prepayments since 2020. Here are some examples of savings from past prepayments:

·         2020 Prepay portions of 2022, 2023, and 2024 maturities of Series 2012 Bonds – Saved $10,500.00.

·         2022 Prepay 2025, 2026, and 2027 maturities of Series 2012 Bonds – Saved $18,425.00

·         2022 Prepays potion of 2024 maturity of Series 2017 Bonds – Saved $2,000.00

·         2022 Prepays 2028, 2027, and remaining 2024 maturities of Series 2017 Bonds – Saved $53,600.00

When you talk about strategic refinancing of the District’s debt and prepayment of the District’s debt, how much of the taxpayer’s total money has been saved?

Refinancing = $201,663.00

Prepayment = $84,525.00

Total Tax Payer’s Savings = $286,188.00