Board approves budget for 2025-2026 school year

The Pattonville Board of Education on June 10 approved a $114.7 million operating budget for the 2025-2026 school year. The 2025-2026 budget was established based on several factors:

• Increase expected in existing property values - Pattonville's revenues are based on the assessed value of property in the district as set by the St. Louis County assessor's office. Property values are assessed every two years, with 2025-2026 being a reassessment year. Based upon preliminary assessed values provided by St. Louis County, it is estimated that total property values in 2025 will increase due to reassessment. Preliminary reports show residential and commercial real estate assessed values increasing 16.95% and 21.37%, respectively. These increases are due to affordable housing within Pattonville, while also being a prime location. In accordance with the Hancock amendment, the increase in taxes Pattonville collects cannot exceed the lesser of one of three factors: the overall change in assessed values, which is projected to be 15.45%; the change in Consumer Price Index (CPI), which is 2.9%; or 5%. Based on this preliminary information, local property tax revenue is projected to increase CPI or 2.9%. Due to the significant increase in assessed values, the district expects significant protests to reduce these values. Therefore, to be conservative, local property tax revenue has been budgeted to increase 1.7% and generate approximately $2.5 million in total property tax revenue (including debt service) or $1.3 million in operating property tax revenue. Local revenue sources account for 85.1%, or $97 million, of the district’s total operating revenue budget, and current property taxes make up $85.2 million of this revenue.
• Revenues -  Next year’s total operating revenue budget represents a revenue decrease of ​​$2.7 million, or 2.32%, from the previous year. This is primarily due to federal ESSER capital funds received in 2024-2025 for HVAC improvements throughout the district. Following local revenue, state revenue is the district’s second highest funding source. But only 11% of the district’s budget comes from state funding. Total state revenue is estimated to be $12.5 million in 2025-2026, with the primary funding from the Foundation Formula, the state’s formula for allocating education funds. Under this formula, Pattonville continues to be a hold harmless district, receiving $4.9 million per year or approximately $825 per student. The hold harmless designation means Pattonville received a higher level of funding under an older state formula than the current formula provides. As a result, Pattonville is held to the same level of funding it received in 1992. Pattonville receives the 511th lowest level of funding from the state out of 520 districts. The remainder of state revenue includes $2.7 million in transportation, which is fully funded for the fourth straight school year since 1991, and early childhood special education, which is reimbursed at 100% of the district’s allowable costs. Last year was the third and final year of American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) funding, with Pattonville receiving a total of $7.1 million in funding over three years. In total, $3.3 million of these funds provided services and supplies to students to combat learning loss experienced during the pandemic. The remaining $3.8 million provided improvements to district-wide HVAC systems. Next year, Pattonville will only see 3% of operating funds come from federal resources.
• Staff salaries - Salaries and benefits are the largest expenditure in the district budget and, in 2025-2026, will account for $94.1 million, or 80.2%, of the total district budget (excluding debt service and bond-funded construction). Pattonville is entering its first year of a two-year agreement in which teachers receive a 3.96% overall salary increase the first year and 2.96% the second year. Support staff receive a 4.5% increase in the first year due to adjusting the transportation salary schedule to a 5-step schedule to remain competitive and a 3.5% increase the second year. However, support salaries  decreased overall following the district’s partnerships with Chartwells and Right at School, which are staffing new food service and before- and after-care employees, respectively. Finally, there was an increase in administrative salaries due the assistant superintendent of teaching and learning position going from a 550-hour position to a full-time position. 
• Total benefits - Total benefits will increase by 4.40% based on the district’s insurance allowance, taxes and contributions to the retirement system. The increase is primarily due to the district experiencing an increase in medical and pharmacy claims in 2024-2025 that exceeded projections by approximately 20%. Due to this, Pattonville will change the pricing structure of health insurance plans with the district paying the full employee cost of the standard and gold plans and the platinum will be a buy-up plan requiring employees to pay $50 per month to participate in this plan. This amount is less than districts in St. Louis County that charge employees for a top-tier plan and allows the district to keep other insurance costs the same. The allowance for eligible staff to select health and dental benefits has been flat for eight out of the last 13 years, but is budgeted to increase by 4% for the 2025-2026 school year.
• Debt service fund increases due to construction - Work on Prop S, Pattonville’s $111 million no-tax rate bond issue began in the 2022-2023 school year. Work on Phase 1 is complete, Phase 2A is wrapping up and Phase 2B is underway. The debt service fund balance will increase $1,890,870 for the 2025-2026 fiscal year due to timing of debt payments. Expenditures in this fund are for scheduled payments of principal and interest on the district’s outstanding general obligation bonds. By law, this fund can only be used for this purpose and cannot be used to fund operations, including salaries. The projected Prop S Phase 2B debt service payments on $30 million of the $111 million in general obligation bonds are included in this analysis and anticipated to be sold in October 2025. Debt schedules will be revised once the sale is final. This fund does not follow a typical fiscal year, and any deficit or surplus at a fiscal year end results from fluctuating principal and interest payments. Based on the current $.49 debt service tax levy, the district will begin the 2025-2026 fiscal year with $6.1 million available in the debt service fund balance. Currently, the district maintains approximately one year of principal and interest payments in the fund balance to accommodate the future debt payments from Prop S. 
• Decrease in bond funds - The district will see a decrease in bond funds due to bond issue construction phasing and timing during summer months which cross fiscal years. Phases 1 and 2A construction on the four buildings additions and improvements to transportation, print shop and science and FACS labs at Pattonville High School cost $50 million. Phase 2B construction is expected to cost less, $30 million. For Phase 3, budgeted at $31 million, the schematic design is more than 50% complete to prepare for summer 2026 construction. 
• Food service -  Sales are estimated to increase $25,000 to $600,000 due to full staffing levels which will provide multiple meal offerings and a la carte options to students. Pattonville continues to be one of only seven districts in the area to offer free breakfast.
• State funding of transportation - Based on state statute, the state is expected to reimburse districts for 75% of their eligible transportation costs. During the 2022-2023 school year, and for the first time since 1991, the state paid its full portion of transportation costs. This resulted in $1.2 million in additional revenue for Pattonville during the 2022-2023, 2023-2024 and 2024-2025 school years. The state has budgeted for full funding during the 2025-2026 school year as well. 
• Purchased services to see increase - The cost for services will increase from $7,696,810 in 2024-2025 to $8,883,590 in 2025-2026, which represents an increase of $1,186,780, or 15.42%. These expenditures are generally for services that are provided by outside agencies and companies, and typically are not for an actual product. The primary increase is due to approximately $500,000 in additional property insurance and $300,000 in transportation costs for students in transition. The increase in insurance is due to nation-wide increases in storms, with there being an increase in tornadoes by 200% and wind by 50%. Additionally, part of the increase is due to insuring the new building additions at Bridgeway, Parkwood, Willow Brook and Holman. The district was expecting to only see a 9% increase due to the building additions, but will see a 22.78% increase when inclement weather situations were included. As part of the federal McKinney-Vento Act, the law guarantees that children in transition have equal access to free and public education. This includes costs to transport those students to school. That may include paying other districts and/or transportation companies or even parents to transport students. Pattonville saw an increase in students in transition and, in some cases, how long they remained in transition, thus equating to an increase in transportation costs, with actual costs increasing by 31% more than prior year costs.
• Operating funds forecast - Each year, the district’s goal is to maintain an operating fund balance of 24% of the upcoming year’s expenses to be available at the start of the fiscal year to avoid short-term borrowing. The bulk of district interest earnings are generated during the second half of the year when recently collected property tax revenue is held in fund balance to cover expenditures for the first six months of the subsequent year. The district is projected to begin the 2025-2026 school year with 44.47% of the 2024-2025 fiscal year’s operating expenses in fund balances, which is sufficient to avoid any short-term borrowing. During the year, operating fund balances for 2025-2026 will decrease by $2,830,270, and the district will end the year with $50.2 million, or 42.71%, in reserves. The district prepares a three-year operating fund projection to adequately plan for the future. Based on current conservative projections, the district is expected to continue to spend down reserves in its fund balance for the foreseeable future. Projections are subject to changes in local property values and other factors such as health insurance and student enrollment. The district will continue to monitor revenue and expenditures to ensure funds are being spent appropriately. When the fund balance decreases to the 24% needed to cover expenses for the following year, Pattonville will need to look at alternative funding methods.
• Impact on senior tax freeze - Pattonville is beginning to estimate the impact of the senior tax freeze; those who are approved for the freeze won’t have the pay the allowable 2.9% CPI growth in property taxes; while the district doesn’t expect a significant impact this year, because the Hancock Amendment caps income and the tax freeze law does not account for recuperating those lost funds, the district expects the impact to be felt in the coming years.

Read the budget document

View the budget presentation