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Mehlville eyes revised Prop P budget; 2003-'04 tax rate to be set by board


Executive Editor

Final approval of a revised budget for the Proposition P districtwide building im-provement program that projects expenditures totaling more than $87 million was scheduled to be considered earlier this week by the Mehlville Board of Educa-tion.

The Board of Education also was scheduled to conduct a public hearing Monday night — after the Call went to press — on a proposed 2003-2004 tax rate of $3.8750 per $100 of assessed valuation.

The proposed tax rate of $3.8750 per $100 of assessed valuation is 8.6 cents less than the current tax rate of $3.961 per $100, according to information prepared for the board by Randy Charles, assistant superintendent for finance and the district's chief financial officer, and Brent Bell, the district's director of accounting.

Regarding the proposed revised Propo-sition P budget, Superintendent Tim Rick-er said he anticipated the budget would be approved by the board members if it met all their needs regarding information.

"I would anticipate that they'll have some comment about it and approve it if it meets all the needs that they have for the information,'' Ricker told the Call. "My thinking is if it wouldn't be approved it would be only to revise formatting, not content because it's all out there.''

The Board of Education had been scheduled to consider final approval of the revised Proposition P budget last month.

But after discussing the matter July 21, the board referred the proposed revised Proposition P budget to the Proposition P Oversight Committee.

During a July 30 meeting, Oversight Committee members said they wanted to be apprised of all expenditures relating to the Proposition P program that Mehlville officials then had estimated would cost more than $86 million.

Oversight Committee members also recommended the Board of Education establish a firm budget for the districtwide build-ing improvement program.

Since the Oversight Committee meeting, the total projected cost of the Proposition P districtwide building improvement program has increased by another $1 million as that much in uncommitted contingency funds has been added to the proposed revised budget.

District voters in November 2000 approved Proposition P, a nearly $68.4 million districtwide building improvement program funded by a 49-cent tax-rate in-crease.

Under the proposed revised Proposition P budget, the total cost of the districtwide building improvement program and related projects would be $87,090,548 through June 30, 2008.

Meanwhile, current district projections indicate the 49-cent tax-rate increase will generate nearly $26 million more over 20 years than what is required to retire bond-like certificates of participation issued to fund the Proposition P improvements.

In October 2001, the Board of Education voted to approve a $72.4 million budget for Proposition P.

Interest on the bond-like certificates of participation issued to fund Proposition P allowed the construction budget to increase to $72.4 million, which included a nearly $3.5 million master contingency.

Current estimates indicate the 49-cent tax-rate increase will generate $170,165,506 through 2022, while the amount needed to retire the certificates of participation is projected at $144,346,224 — leaving a surplus of $25,819,282 in district capital funds.

The estimated surplus does not include any interest that may be earned.

The proposed revised Proposition P budget of $86,090,548 includes the board-approved budget of $72.4 million, plus another $14,690,548 in district capital funds. To date, a total of $4,898,567 of district capital funds has been spent on Proposition P-related projects.

Of the 49-cent voter-approved tax-rate increase, 41.6 cents is being used to retire the certificates and 7.4 cents is going into the district's capital fund. At the recent Oversight Committee meeting, Charles told members that the 7.4 cents being placed into the district's capital fund would total $13.30 per year for a resident whose home is valued at $100,000.

Of the 49-cent tax-rate increase, the proposed revised Proposition P budget details what projects are being funded by the 41.6 cents and what projects are being funded by the 7.4 cents.

Charles presented the proposed revised Proposition P budget to the board in June. During his presentation June 23, Charles cited three reasons for the use of capital funds, including code requirements, hidden conditions and original budget estimates that were lacking in detail.

The code issues and hidden conditions that have resulted in extra cost to the district also have resulted in extra work for the project's construction manager, the McCarthy Construction Co., and the architectural firm for the project, Dickinson Hussman Architects, according to Charles.

While the district is negotiating with the firms to reduce their fees related to the extra work, the district's cost projections will have to be increased, according to the assistant superintendent.

Under the board-approved original Proposition P budget, McCarthy's fee for serving as construction manager for the project was $2,835,000.

However, in the cost of Prop P-related projects presented to the board, McCarthy is projected to be paid an additional $3,321,212 for "general conditions.'' To date, the construction manager has been paid $2,534,331.

"In addition to fees being paid to Mc-Carthy, general conditions include expenses incurred by McCarthy and the salaries of McCarthy personnel. This was ap-proved by the Board of Education when McCarthy was hired as the construction manager. District administration decided to pay general conditions from capital funds so Prop P funds could be used to pay for the sprinkler systems,'' according to information Charles provided to the Board of Education.

Similarly, under the board-approved Proposition P budget, the final costs of fees paid to Dickinson Hussman Archi-tects is projected at $4,491,039.

To date, however, the district has paid $4,198,957 to Dickinson Hussman Architects.

In addition, in the cost of Prop P-related items presented to the board, Dickinson Hussman Architects is projected to be paid an additional $200,000 for "general conditions.'' To date, the company has been paid $148,261.

Given the additional costs being incurred by McCarthy and Dickinson Hussman, district administrators currently are negotiating a fixed price for the remainder of the Proposition P work and a recommendation is expected to be brought to the board in the near future.

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