The Fox C-6 School District has used a financial tool to transfer a little more than $2.6 million in debt to an escrow account.
Fox school officials also have hired a consultant to help its financial department this school year.
Board of Education members voted unanimously Oct. 3 to approve a bond defeasance contract that allowed the district to move $2.68 million from its debt service fund into an escrow account to pay a portion of the debt on $9,749,963.40 in bonds it sold in December 2017.
On Sept. 5, the board voted unanimously to hire RNSC Consulting to provide support for Fox’s financial department. Board documents show Fox is paying $40,000 for the consulting service.
Defeasance
The district was not scheduled to retire $1.1 million of the 2017 bond debt until March 1, 2031, and the other $1.58 million of debt was not scheduled to mature until March 1, 2032.
However, by approving the defeasance agreement, the $2.68 million in bonds are no longer considered to be debt for the Fox district, CFO Amy Vandevender said.
“This allows us to repay our debt faster and also keep our debt service levy at the level voters previously approved,” she said.
Vandevender said Fox’s debt limit is $193,332,523, adding that the district’s general obligation indebtedness was $57,134,963 as of Dec. 31.
She said the transfer of just more than $2.6 million allows Fox to keep its debt service tax levy rate at 0.3901 cents per $100 assessed valuation, the same debt service tax levy the district had had since the 2018-2019 fiscal year.
Fox’s current overall tax levy is $4.268 per $100 assessed valuation. The district’s operating tax levy is $3.8779 per $100 assessed valuation.
Fox residents with a home valued at $200,000 by the Jefferson County Assessor’s Office will pay $1,621.84 this year in property tax to the district.
“It is a best practice to keep the debt service levy consistent at previous voter-approved levels,” Vandevender said.
When board members voted 6-0 on Sept. 19 to approve this year’s tax rate, Vandevender presented information that showed how the district’s debt service tax levy would fluctuate from year to year before 2017. Board member Judy Smith was absent from the meeting.
Board documents show the district’s debt service tax levy rate was as low as 0.2548 cents per $100 valuation and as high as 0.3982 cents per $100 valuation between 2013 and 2018.
“Fluctuations in rates make it difficult for the district to responsibly manage its budgets from year to year, as well as being confusing to the public,” Vandevender said.
She also said retiring a portion of the district’s debt early would not help much if district officials decide to ask voters to approve a bond issue in the future. Voters approved a $40 million bond issue in June 2020, which the district has used to build additions at Antonia and Meramec Heights elementary schools and Fox High School and to add classroom space to Seckman Middle School, replace most elementary school playgrounds and upgrade security features at all the schools.
“If the district decides to ask the community for a bond issue, a defeasance amount of this size would be considered immaterial,” Vandevender said. “The district, however, does have significant capital needs that will need to be addressed in the future.”
Consultant
Clint Johnston, former superintendent for the Jefferson R-7 School District, will serve as the Fox district’s financial consultant.
“With the transition in our finance department with (new personnel who have) very little public school experience – and public school accounting is its own animal with lots of different rules and regulations – we have identified an experienced consultant to support their work for this year,” Fox Superintendent Paul Fregeau said when the board approved hiring RNSC Consulting.
Fregeau said the decision to bring in a consultant was made while Fox was searching to replace former chief financial officer John Stewart, who retired in July after working for the district for three years.
Stewart’s departure came on the heels of payroll manager Sherry Caldwell leaving in January and benefits and payroll specialist Pam Graves leaving in February.
“When we saw the applicant pool (for CFO), there was very little if any public school experience in the candidates,” Fregeau said. “We had to have a plan to support the CFO with the amount of changeover in the department. That doesn’t mean they (finance department employees) don’t have great qualifications. It is more about their experience in public school because it is a whole different animal.”
Vandevender was hired in May and worked alongside Stewart until his retirement.
She was a client accounting manager at Cushman and Wakefield before joining the Fox district. She also worked in accounting and finance positions at Washington University and Webster University.
“Fox has every confidence that the finance team put together for this year has the proper mix of experience, expertise and knowledge required to take Fox into the future,” Fregeau said. “Ms. Vandevender’s leadership and corporate finance background is an asset to the district, and she has put together a strong finance team. The consultant was hired as a resource for the finance team to provide support during the onboarding process.”
Fregeau said the district will benefit from Johnston’s familiarity with Jefferson County. He was the Jefferson R-7 superintendent for 12 years before retiring after the 2022-2023 school year.
“It helps that he is familiar with the trends in Jefferson County as far as the assessor goes and the public’s expectations of public schools,” Fregeau said.