NTP uses a special local IP address to mean "localhost for purposes of
timekeeping". In ntp.conf, use the "fudge" directive to override the stratum on
this IP:

server 127.127.1.0
fudge   127.127.1.0 stratum 10


Then, once you restart ntpd, it will take a few minutes before it actually
starts answering queries with the new stratum. It measures the clock for a
while first; while it is doing that, it will answer, but with 'stratum 16'
so clients will refuse to set their clocks by it.

To check its status, run these from a client machine:

ntpq -p <address of your local time server>
ntpdate -d <address of your local time server>

when the latter starts showing the correct stratum, you should be able to set
clocks.