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Financial adviser outlines bond options and hypothetical 12.5¢ levy transfer; cautions about Senate Bill 3 risk
Summary
Piper Sandler representative briefed the board on debt‑service capacity, no‑tax‑rate‑increase bond scenarios and an option to move levy cents to operating; presentation noted constitutional bonding capacity, potential levy transfer that would raise operating revenue and the pending risk from Senate Bill 3 litigation.
A financial adviser from Piper Sandler presented tax‑levy and bond scenarios to the Francis Howell board on Oct. 16, outlining how the district could use its debt‑service levy for future no‑tax‑rate‑increase bond issues or transfer levy cents to the operating fund to increase classroom revenue.
Brett Blevins (Piper Sandler) explained two broad choices: keep the current debt‑service levy (67.13 cents) and fund larger future bond packages, or seek voter approval to transfer a portion of the debt levy into the operating levy (a ballot measure requiring a simple majority). He showed a hypothetical 12.5‑cent transfer to the operating levy that would generate roughly $5.5 million annually on the district’s current assessed value and still allow multiple future no‑tax‑increase bond issuances (example: $150 million in 2027, $150 million in 2035 and $275 million in 2042 under the scenario presented).
Why it matters: Levy‑mix decisions affect how much funding is available for classroom programs versus facility projects, and either approach influences the size and timing of capital projects the district can finance without raising overall property tax rates.
Key points from the presentation Bond capacity and rules: Blevins explained Missouri’s constitutional bonding capacity (15 percent of assessed value) and an affordability calculation based on the debt‑service levy; he said Francis Howell’s outstanding and hypothetical debt would remain well under constitutional capacity in presented scenarios.
Levy transfer mechanics: A ballot measure to move levy cents from debt to operating requires a simple majority; the transfer is structured so the overall tax rate remains unchanged while shifting revenue between funds. The district would not see revenue from the transfer until the following fiscal year after the September tax‑rate hearing.
Senate Bill 3 risk and timing: The adviser cautioned that the scenarios assume status‑quo tax law and that Senate Bill 3 — which seeks to freeze assessed values and could reduce property tax revenue — remains an uncertainty; he noted a lawsuit had been filed and that outcomes could change the district’s revenue projections.
Past debt actions: Blevins reminded the board that the district’s recent defeasance (paying off or restructuring certain debt) in 2024 saved future interest costs and that continuing to manage debt proactively is an available option to adjust future capacity.
Next steps and board questions Board members asked about timing and process; Blevins said an April election is typical for bond questions and that detailed ballot language and community communication would be required. The board and staff said they will use the recently completed facilities master plan and demographic study to align project priorities with financing options.
Ending No binding decision was made at the Oct. 16 meeting; the presentation was introductory and intended to inform future discussions and potential ballot planning.
