School board proposes school lunch hike just months after buying 35 acre Webb estate at 360% above assessed value

Sat, July 30, 2022

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Lexington Times Web Editor

August 3rd, 12:43pm update:

BREAKING: State Board of Education releases docs on mansion purchase exclusively to Lexington Times

Please review the below document before reading the original story.

XIV_C_FayetteCountySN_0-4 Download

Original Story:

A Fayette County school board proposal to increase school lunch prices comes just months after the board approved a $10.1 million deal to buy a sprawling 35-plus acre family compound from wealthy real estate investor Dudley Webb’s family. The property includes a 9342 square foot mansion.

Drone flyover of Webb Manor by Jordan Aerial Photogrpahy

According to multiple reports, the school board either won’t say or doesn’t know what the mansion will be used for. (Board retreat, anyone?) The deal still needs to be approved by the state before it’s finalized.

The board had the power to rush the deal thanks to HB 678, a brand new 2022 law, which “suspend(s) the requirement for prior approval for a local board to commence the funding, financing, design, construction, renovation, or modification of district facilities(…) and until June 30, 2024, provide(s) for an expedited process for approval of district facility plans and the acquisition and disposal or property.”

HB 678 was passed by the state legislature on April 8, and the board voted use its new powers to implement the agreement just three days later.

The Webbs are widely considered to be one of Lexington’s wealthiest families, and the estate was assessed at $2,802,600 in 2020. It dominates west Lexington’s The Lane neighborhood. Appraisers think it’s worth $12.5 million.

The property value administrator lists Webb’s 2002 purchase price as $0, as it was a tax-free transfer. Despite Lexington’s booming real estate market, the property’s assessed tax value has remained unchanged since 2015. Kentucky.com discovered a similar situation with former mayor Jim Gray’s Gratz Park home in April and the administrator, David O’Neill, claimed it was due to an oversight. The oversight began occurring in Gray’s first year as vice-mayor and continued to occur even after he left office (this detail was not reported by the Herald Leader).

Graph of the median sale price in Fayette County, KY

Property tax records for the property located at 2160 Versailles Rd

Webb paid $17,747 in property taxes on the estate in 2020, and similar amounts each year since 2002. Had he paid taxes on what the School Board came up with as the fair market value of his home, his annual tax bill would have been tens of thousands of dollars higher. Fayette County Property Valuation Administrator David O’Neill, an elected official, is ultimately responsible for the valuation.

Webb appears to have saved up to a million dollars in property taxes over the years through the low assessments. Fayette County Public Schools are funded by property taxes.

Not much is known publicly about O’Neill’s relationship with Webb, but in 2013 after Webb met with city officials to discuss his CentrePoint project “to find out what we need to do and what they need to do,” O’Neill enthusiastically posted on his Facebook account that the long-delayed project “is on!” Sources say Webb eventually moved into the project’s penthouse, hence the need to unload the mansion.

Meanwhile, all students in Fayette County ate lunch for free the last two years due to the economic crisis related to COVID, but that’s about to change in the coming semester when a federal law expires.

The Community Eligibility Provision or CEP, a federal program, allows students at the majority of schools in the district eat for free, regardless of family income. To qualify for CEP, schools must have a certain percentage of families who qualify for federal assistance.

18 schools are not in the CEP program, but students can still qualify for free meals based on family income. Those kids who are not eligible will still be on the hook for the price increase.

Our Take

Obviously the $0.25 increase in lunch prices isn’t purposed to fund the School Board’s purchase of the Webb compound, but the move demonstrates how incredibly tone deaf our elected leaders can be at times.

The increase represents an additional $15 per month for a family with three kids. To many readers, that may not seem like much, but for a single parent living paycheck to paycheck, it most certainly makes an impact.

Furthermore, the gap between the $2.8 million tax assessment and the $12.5 million pre-sale appraisal is jaw-dropping. Someone has about $10 million worth of explaining to do there. Whether the assessment was too low or the appraisal was too high, multi-millionaire Webb appears to have benefitted greatly at the expense of Fayette County Public Schools. Do our elected leaders have a responsibility to prevent this kind of thing from happening? Readers can reach out the the school board at feedback@fayette.kyschools.us to let them know. The Fayette County Property Valuation Administrator, David O’Neill, can be contacted here. The Kentucky Board of Education, who must approve the purchase, is appointed by Kentucky Governor Andy Beshear.