In a press conference Tuesday, Daviess County Public Schools Superintendent Matt Robbins addressed the public and media regarding the potential annexation of nine DCPS properties by the City of Owensboro. A series of eight City ordinances are expected to be heard at Tuesday’s City commission meeting, which Robbins said he plans to attend to voice his opposition.
Robbins said he learned of the City’s annexation plans on May 2. At that time, he said the list included three additional schools than what has officially been proposed, but the City commission agenda, which was released late Monday, was the first time he saw a finalized list.
Schools proposed for annexation into the City include Apollo High School, Burns Middle and Elementary Schools, Daviess County High School, Highland Elementary School, the property that will be the future site of Daviess County Middle School not already under City jurisdiction, DCPS Central Office and the maintenance and transportation departments.
Robbins made the City’s annexation proposal and its effects known to his employees via email on May 16.
While DCPS is a nonprofit and therefore exempt from insurance, property and net profit taxes, DCPS employees would be affected by a higher occupational tax rate than what they currently pay to the County.
The City’s occupational tax is currently set at 1.78 percent. The County’s is set at .35 percent, but is proposed to change to .70 percent on Jan. 1, 2020 and then to 1 percent on Jan. 1, 2021.
Robbins said the nine annexations would result in a net cut in pay for employees of 1.43 percent at those the proposed schools and sites and a 408 percent net increase to current occupational taxes paid by DCPS employees. For perspective, he said, an employee earning $25,000 per year now pays $87.50 per year in occupational tax but with this ordinance, he or she would pay $445 per year.
City Manager Nate Pagan told Owensboro Times that the relatively recent notice given to DCPS was due to reasons outside of his control.
“This process has a very structured timeline based on state law,” Pagan said of the proposed eight ordinances.
Pagan did say that the City proposed a revenue sharing mechanism with DCPS, but that school officials did not engage in discussion.
“We have nothing to negotiate but employees’ paychecks, which is a nonnegotiable,” Robbins told the media Tuesday.
Pagan said the City does plan to implement a revenue sharing mechanism with Daviess County Fiscal Court, which would allow the occupational taxes incurred from the employees at those nine properties to be split.
“We would rebate to the County half of their occupational tax rate, not to exceed 1 percent,” Pagan said. “Our intent was not to take money out of the County’s pocket.”
He estimates that the City will take in $505,000 in occupational taxes from annexing those nine properties, before services are paid out, and the County will take in $263,000. Pagan said the CIty’s revenue would be put into a pension reserve account.
“This is not an institutional battle,” Robbins said in the press conference. “There is certainly zero animosity toward the City. We understand that they have very real pension problems. Unfortunately, we have the same realities that we have to deal with as well.”
The $25,000 annual salary Robbins provided as an example of the effect of the occupational rate change to his employees he said is actually a little more than the salaries of DCPS support staff — bus drivers, cafeteria workers, classroom aids and janitors.
“Unfortunately, at the meager salaries that many of our employees make, they literally do live paycheck to paycheck,” Robbins said. “Any nuance in their pay has a ripple effect.”
City officials have maintained that not only was the decision financially driven, with plans to use the revenue from the additional occupational tax for pension funding, but also to provide City fire, police and infrastructure services to the six proposed schools.
City Commissioner Larry Conder said this decision would enhance safety at the schools proposed in the annex, with quicker response times by City fire and police solely based on closer proximity. He said this would mean school resource officers would transition to Owensboro Police Department also.
Robbins has given the City commission meeting details to all DCPS employees as an opportunity to voice their concerns should they feel led.