The District’s $390,000 “Savings” Cost Local Families $875,000

42
1662

In 1999, the MRH Community elected a Board of Directors with a clear mission: to improve the quality of education for every child in a fiscally responsible way. For the next 20 years I served on the Board while stakeholders supported this mission, including taxing itself at a rate higher than most area districts. Our residents saw their tax dollars work to move the District from being barely accredited to one of the best in this area and the state, that regularly received national recognition for our collective efforts.

As part of its responsibility to the community for trusting it with taxpayer dollars, a school board must respect the hardships that come with paying higher taxes, particularly for those with fixed or low incomes. The Board should be prudent with the tax revenue it is given and always look to ways to lower tax rates. In December 2023, the MRH Board touted as a big win the prepaying of bonds that were not due until 2029 and 2030. What they did not tell you is that these claimed “savings” cost taxpayers over $875,000 in taxes that could have been returned to community households this year.

2023 was a reassessment year, and as area property values grew, so did our tax bills. If tax rates are kept the same, increases in the value of our homes increase our property tax bills. The Missouri Constitution’s Hancock Amendment limits the impact of property value increases by restricting the growth in a school district’s revenue to the CPI or 5%, whichever is less. This restriction applies only to the operating levy, the taxes that go to teachers’ salaries, textbooks, computers, supplies, etc. To comply with the Hancock Amendment, a district must “roll back”, or decrease, the operating tax rate, in order to keep the new tax revenues from rising more than the CPI or 5%. Last year, the MRH Board performed this legal requirement by rolling back that rate by just under 10%.

However, the Hancock Amendment does not apply to taxes that go to pay off bonds our community has generously provided to build, renovate, and maintain its school buildings. Because no new bonds were issued in the 2022-2023 fiscal year, the amount of money the MRH District needed to make its bond payments in 2023-2024 should have been the same. When property values rose significantly in 2023, the Board could have reduced the debt service (or bond) tax levy by the same nearly 10% it reduced the operating tax levy. Such a reduction in the bond levy would have put $875,000 back into the pockets of our taxpayers. This information can be found in MRH Board Docs, Meeting of September 26, 2023, at Tax Rate Documents p.1, and Notice of Tax Rate Hearing, p.1.

Yet, instead of recognizing the hardships faced by many community members due to the rise in home values, the MRH Board chose to keep tax rates nearly 10% higher than needed. The Board used these extra funds to prepay bonds that were not due until 2029 and 2030, resulting in savings of $390,000 over six years. However, taxing our citizens an extra $875,000 in a single year to “save” $390,000 does not seem like such a good deal. Moreover, because the savings came from a six-year period extending to 2030, this year’s savings, when tax bills soared, were only around $70,000.

In a year when many in our community are struggling, especially seniors and others on low or fixed incomes, the Board needlessly kept the debt service levy high, and we collectively paid an extra $875,000 to save $70,000 in a single year. This happened at the MRH Board’s Tax Rate Hearing on September 26, 2023, with NO discussion that would give our community some understanding of this decision. Indeed, I only became aware of this by personally reviewing budget documents. Sadly, I do not find this surprising, as it is consistent with this Board’s indifference when $1.2 million in errors that violated state law came to light in January’s audit report, and many issues I have found in the budget. The current members of the MRH Board seem to have lost their focus on their primary goal: providing a high-quality education to our diverse community in a fiscally responsible manner.

Please think about these issues when you vote on April 2.

Nelson Mitten was treasurer of the MRH Board of Education for 11 of the 21 years he served as a Board member. He and his wife, Gina Mitten, are the proud parents of two MRH graduates.

42 COMMENTS

  1. I would be curious to hear if the district made the decision to pay off the bonds early with consultation of a reputable firm. I know I don’t make decisions of paying things off early without discussing with my financial adviser. Does anyone know this info?

  2. Nelson, sorry if I’m being obtuse, but I don’t really see any nefarious or incompetence-related connection between the $875,000 you mention and the $390,000 the district saved. If the district retired bonds early, then it did save actual money–all the interest that would have serviced that bond debt for the next 5-6 years. That must be the $390,000 in savings. If they could have reduced the debt service levy from $1.35 to $1.21 (a 10% reduction) but didn’t, maybe that was the wrong decision, but it’s not as if that $875,000 (resulting from keeping the debt levy at $1.35) has been frittered away by the district or board. It still has to be used to pay off MRH debt, debt that the voters agreed to. By having that $875,000 now they can pay off debt faster. The one sentence in your article makes it look as if somehow or another the district lost or wasted $875,000 and then claimed to save $390,000. But I don’t see that. If I’m missing something please let me know. I’m just a regular voter trying to figure out who to vote for in April.

    If your main point is just that in these economic hard times people would appreciate more cash in their pocket, and the BoE could have made that happen by reducing the debt service levy by 10%, well, point taken. But on my house, worth $231,000 according to the county assessor, not the swankiest house in MRH but also not the least swanky, I would have saved $68 on my tax bill this year with a 14 cent reduction in the debt service levy. I’d be glad to have that $68 back, and I’m grateful to be in a position where $68 isn’t going to break the family budget, but I doubt that $68 would make up much of all the extra money I’ve spent on groceries this year due to inflation.

    So again, maybe you’re right that it wasn’t the best decision the board could have made. Maybe it would have been a better decision to put $30 to $100 back into the pockets of the diverse range of MRH homeowners this year, and to decide to pay more on the bond debt in the long run. But I don’t see anything nefarious or stupid. Please let me know what I’m missing if I’m missing something.

    • I don’t think you’re missing anything. It appears written to incite angst and division in the general public to achieve a political goal to support a slate of candidates through emotional bias as the author has vested interest in their campaigns.

      • This exactly! I’m eager to hear Mr. Mitten defend the findings of audits from when he was on the board since he also served on a board that had more significant findings based on a previous post. To be honest, I’m ok with findings. I’m not ok if there is a pattern over time or incompetence in fixing the issue immediately. It’s a shame Nelson served so many years to turn around and try to run a dirty divisive campaign. If I were one of the three he was supporting financially and online, I would tell him to stop before it cost me more votes. Mr. Mitten, we get it! You love the district. You put in a lot of years but this is not a good look for you.

    • You’re exactly right. This is a total nothingburger and being slanted to rile up the “remove them” crowd.

      I’m sure it hit the intended audience as intended, but any discerning person can see right through it.

  3. Could someone help clarify the transaction? Is the $360,000 referring to interest saved by retiring $875,000 of debt? If so, isn’t that principle paid due anyway – either today or tomorrow? If so, isn’t the cost to the taxpayer the opportunity cost of the $875,000 over that same period, not the whole $875,00?

    I really would like to get riled up about spending, but this just seems like a debt service payment.

    I think the real danger is the following years when the board gets to say its debt financing charge decreased so there’s room for more spending.

    • I doubt it-I think that comes more from the fact that a staggering number of experienced teachers have left over the past year or so and allegedly much of the blame lays at the feet of a ham-fisted superintendent and her groupies on the school board.

      Also-for the first time in almost 30 years, our educators are using collective bargaining as they see no positive path in dealing with Jamison and BOE.

      But it sounds like your spin plays better with those who continue covering their eyes and ears to any issues…

      • You do realize that the collective bargaining path is actually an upgrade over the way it was done before. Why do you think a majority of schools use collective bargaining, because it is better for the teachers and for the administration. I guess it plays better if you blame it on the superintendant and the school board rather than saying this is actually a big win for the teachers.

        • Nah–the fact is that for the first time in 20 years it was necessary to go this route due to a superintendent and board who IGNORED teachers. Period.

  4. Of course also what is the actual role of the BOE.
    The Board’s chief responsibility is to evaluate and hire the superintendent of schools. Additionally, the Board adopts policies and direct procedures for the governance of the District, with responsibility for implementing Board policy and day-to-day operations of the District delegated to the superintendent. The Board is also responsible for adopting an annual budget to enable the District to carry out its educational programs. All Board actions are governed by state and federal laws and Missouri Department of Elementary and Secondary Education (DESE) guidelines.

  5. How much do you want the district to be terrible? The teachers were able to get raises to stay competitive with neighboring districts. They would not have able to without that money. Don’t you want to pay teachers? This article is so disingenuous. For the $1.2. KEB (auditor) noted “no material weakness or significant deficiencies” and “no financial misstatements were detected as a result of the audit” per finding 2023-001 of the KEB audit, The district paid teachers and substitutes out of the incorrect fund. the movement of funds wasn’t approved. So they paid teachers, is that bad? (Source: boarddocs).

    Per the MEC, you and your wife have contributed a majority of the financing campaigns of certain candidates so is this a campaign article?

    Seems like you’re mansplaining.

    • Taxes collected through the Debt Service Levy can only be used to pay for principle and interest on debts/bonds, which is where excessive taxes were collected. That money cannot legally be used to pay for teacher salaries. Those funds must come from the Operating Levy.
      You are quoting from the wrong portion of the audit report with respect to the findings. You need to look at the state audit results, specifically. The audit report states: “Our examination disclosed *material noncompliance* with budgetary and disbursement procedures applicable to Maplewood Richmond Heights School District during the year ended June 30, 2023 as reported in finding 2023-001 in the Schedule of State Findings” which resulted in what’s called a “qualified opinion” and that’s not a good thing The problem was not a single transfer of funds being approved. There were 6-figure discrepancies in 3 out of the 4 funds due to multiple errors.

      • I’ve worked at a big 4 accounting firm (KPMG) and I’ve seen my fair share of 10Ks and audit reports and know what a qualified opinion is. Per review this level of finding also happened in 2013 through 2015. Material weakness (worse ratings) were noted in 2016 through 2017. There have been clean opinions the last 5 years. (Wasn’t the OP on the board for those material weakness reports?). Seems the district is improving.

        There is no mention in the audit report of systemic problems, no recommendation for misappropriation. As DESE states “budgets are not a static document but rather a working document that changes throughout the year” and “it is the responsibility of the budget officer to monitor the business affairs of the district”. The CFO supplied an appropriate action plan and explained the issue and what happened at the January board meeting. If he doesn’t fix it, I’d bet he won’t have a job.

        Are you saying the funds related to the finding were not used for salary or other necessary items?

        • I would like to hear more about the audits when Mr. Mitten was on the board. Specifically, when he was Treasurer. What were the significant findings when he was on the board? It does not relieve the current mistakes, but I am always weary of those who throw rocks and live in glass houses.

    • Conservative here.

      I want to express my pleasure of watching the liberals and the progressives fight. This is a dream come true, and was bound to happen. Basically, the liberals have been played, but didn’t see it coming.

      4 years ago LIBERAL Barry Greenberg was called Trump MAGA supporting Foxnews watching candidate and the liberals ate it up and ran to the polls to vote Greenberg out and Knapper in.

      Knapper was brought here to change our town to progressive. Now the liberals are like, that’s not what we want. We want accountability, we want transparency. Sorry it’s not what you voted for.

      Does anyone know how much has been spent at the school and city(unverified, I’ve heard over $100,000) to train staff on the racial DEI initiatives being pushed by progressives.

      Liberals could have a melt down here, but this conservative is on your side, which means you may be called a MAGA supporting, Foxnews watching voter.

      BTW: Don’t tell the progressives, but MAGA gets it’s news from X, and not MSM, including Foxnews!

      • I believe it is possible to be fiscally knowledgeable and responsible while also supporting DEI initiatives. They are not mutually exclusive.

        • Thank you, Kathy! I , too, have no problem using my name and I know well the folks who have dedicated years to the quality of the institutions in support of this great little community! The politicizing and divisiveness included in several comments here are out of line. Solid information welcome! Editorializing and politicizing is totally counter productive.
          Thank you Nelson!! Lots of years of hard work on the school board. Thank you Barry for the many solid years spent in City government! Yet you input or council not sought or ignored? Some even handedness would be refreshing.
          Fresh faces are always welcome here…but manipulating in self interest, lack of broad community involvement by not hearing the voices of the people involved in collaborative, carefully paced and open-handed decision making, is a leadership issue.

  6. Of course lets just leave out the fact that they reduced the tax rate for residential and commercial from the year before. People go out and find the answers for yourself.
    Residential Property tax rate fiscal year 2023 $3.8555
    Residential Property tax rate fiscal year 2024 $ 3.4537
    Comercial Property tax rate fiscal year 2023 $4.4591
    Comercial Property tax rate fiscal year 2024 $ 3.9992

    • That’s the Operating Levy, which had to be lowered because of the Hancock Amendment. That is discussed in the article, so nobody is leaving out any relevant facts. It doesn’t even mean that your tax bill goes down since valuations went up so much, in fact you should expect the dollar amount to increase by about 5%.

    • What I think Nelson is saying is that the operating tax rate was decreased as required by Hancock, but the bond levy tax rate could have been reduced, causing a further reduction in the rate.

      • I think it is all smoke and mirrors and just trying to get under peoples skin and no one goes out and looks for themselves anymore. I wonder what we could find if we were to look at the board Docs while Mitten was on the board. I wonder if they did everything correctly and exactly as they should. I dont find that Trent or Brian have anything substantive to say about how they will make sure everything is right in the world with the board of education other than stamping their feet and yelling loudly about how it was so much better in the olden days. Teachers have always been under paid, there is always discontent with teachers a set of teacher s and that is to bad.

        • “I think it is all smoke and mirrors and just trying to get under peoples skin and no one goes out and looks for themselves anymore. I wonder what we could find if we were to look at the board Docs while Mitten was on the board. I wonder if they did everything correctly and exactly as they should. I dont find that Trent or Brian have anything substantive to say about how they will make sure everything is right in the world with the board of education other than stamping their feet and yelling loudly about how it was so much better in the olden days. Teachers have always been under paid, there is always discontent with teachers a set of teacher s and that is to bad.”

          Hmmm-not one single verifiable fact in what you said above-all supposition and innuendo. Not a great argument, but definitely keeping in line with both the actions of this “infallible” mayor and the sycophants on that school board right now.

        • It actually was better just a few short years ago. Don’t mischaracterize the current widespread low staff morale as “discontent with a set of teachers”. Unless you know firsthand, take a seat.

  7. This same mentality is now running our city with Napper and Whitcomb attempting to do it all their way. Napper is another Putin at heart. Maplewood is set up through the state of Missouri to be a city that’s day to day operation is handled by a professional city manager. Mayor and council have equal power and are to enact legislation that makes the city run smoothly and efficiently. Napper has wanted to run things from the start. That’s why she butted heads with the former city manager–he was not able to do his job without her oversight. This has nothing to do with race. Napper has tried to make it about race from the start. One of the ordinances passed that she is most proud of is the ‘hair in city hall’ ordinance. She called in the NAACP. The long time experienced councilpersons have left the council due directly to her overbearing, pushy, racist way of being the sitting mayor.

    • Maplewood, we are in big trouble if change isn’t made. Everyone I have spoken with is now voting for Barry, even non Barry Supporters. The current city Mayor has done little to nothing to address serious concerns, now this with the school district

      • How insane are things here? Anyone and everyone not supporting the mayor is literally being called “racist.” EVERYONE.

        This is beyond embarrassing for our town and I would argue democracy.

    • This comment is so blatant in it’s ignorance. Their names are Knapper and Whithycomb.

      Are you so hateful that you want to pretend you don’t know that?

      Yes, your racism is showing. Idgaf how you twist it.

      • Your HATRED for Barry is concerning. In addition to spreading a mistruth about stolen yard signs for which you have no proof, your attacks are relentless. Is it possible that some anti-Semitism is bubbling up here? This feels really personal.

        Maybe step away for a bit and go outside to BBQ…great day for it!

  8. Yes yes yes! As a long time MRH patron, parent and taxpayer, I’m very much regretting “allowing” Mr. Mitten to retire from our school board! Thanks for providing the transparency promised by admin. Vote April 2nd!

  9. I would love to get more details on the $1.2 million in “errors” that were brought up during the audit, and specifically where the “errors” came from.

    • Because the current Chief Financial Officer of the school district is A BAND TEACHER. He’s a band teacher that was put in a desk job and somehow promoted by Dr Jamison to CFO. Funds were moved incorrectly, errors were made and he didn’t even realize how much he screwed up until the audit. Also the administration (Jamison and whoever else) was supposed to seek permission for the money movement and transfers from the board (aka have them sign off) and the board was never consulted.

      On top of that, Rachel Goltzman, who was the board treasurer at the time, all of the other directors looked at the paper trail and were cool with it.

      Now Goltzman wants to be reelected to do it again.

      And Mr./ Ms. Saarinen: You are foolish to state that auditors gave their approval of this tax grab. An audit isn’t evaluating the investment or spending choices that are made. It’s just making sure everything is done legally and correctly (which it wasn’t).

      • He is not a band teacher he has an MBA. Mistakes happen in all areas of life and if you have never made them then you have lived a very priviledged life. The movement of funds forgot to get moved when it was discovered the money was moved.

        • I know a person who got fired over a $3000 mistake. I know another person who made a mistake, ran a red light and ……… Mistakes also have consequences, and sometimes the boss goes with them for perceiving to not do thier job of overseeing or having procedures in place to prevent it. Maybe because he supports the progressive movement he has a privileged position. btw: A MBA is not that impressive these days.

      • TRV I’m quite confused by your post. It seems half wishful thinking and half condescending without any actual facts and lots of anger. Please let me know where I can find the illegal actions, where I said “the state approved this tax grab” and where Ms. Glotzmen stated she would like it to “do it again”. Per LinkedIn, Mr. Holzer has been at the school for 6 years with work as a director or CFO. I’m sorry you have a vendetta and I don’t understand it.

LEAVE A REPLY

Please enter your comment!
Please enter your name here