Despite declining enrollment, the West Bend School District is running full speed with a referendum. This email from the Director of Facilities to the CFAC members went out this morning:
From: Dave Ross <daveross@wbsd-schools.org>
Date: February 23, 2018 at 9:53:33 AM CST
To: XXXXX
Subject:Update to CFAC membersLast Tuesday night, the Board of Education met for a work session to discuss the work that you have been doing and to make some decisions about what needs to be done going forward in order to keep things moving forward. Video of the meeting can be viewed at:
https://www.youtube.com/watch?v=buHIkNf-4Ow&feature=youtu.be
The meeting had three parts to it: the first was an update to the board by Bray on the work they have done to date, the second portion was dedicated to looking at the districts debt picture which was presented by Robert W. Baird and the third part was an overview of the methodology for the community survey which was presented by School Perceptions.
Here is a very brief synopsis of each part:
Matt Wolfert from Bray Architects reviewed the drawings with the board including the renovation option for Jackson. The board asked a lot of questions but seemed quite pleased with the progress that has been made to date.
Brian Brewer from R.W. Baird reviewed the debt picture of the district. The district does have some existing debt but has structured that debt wisely. In addition, the district has been putting money into the Jackson Trust. The long and short of things is that the district could do as much as an approximately $40 million referendum and not raise property taxes because of the structure of the existing debt and the Jackson Trust.
Finally, Bill Foster of School Perceptions presented on how his company would go about performing a community survey. He also advised the board to listen to the results of what the survey told them. Failing to do so often leads to an erosion of trust in the board from the community.
This was a really short overview so I would encourage you, (especially if you’ve got a spare 2 or 3 hours) to watch the video.
The last thing I wanted to do is share a little more information. During our committee meetings many of you asked for articles and/or research on the effects that a facility has on education. I thought that this article:
provided a fairly good overview but more importantly gives many references/sources for further investigation.
As always, if you have any questions, please let me know and I’ll do my best to get you an answer.
Have a great weekend.
Dave Ross
Director of Facilities and Operations
Based on the email, it looks like they are going to try to pull the “let’s spend $40 million (plus millions more in interest), but we won’t increase taxes.” Of course, that commits more of the operating budget to debt service, thus reducing funds for teachers, supplies, etc. It also completely misses the opportunity to decrease taxes as those older debts are paid off.
Such a move of spinning off debt for decades in order to keep the yearly expenses lower also increases the likelihood of tax increases in the future. It tightens the part of the budget that can be used for actual operations, and remember that enrollment in the district is expected to decline. As enrollment declines, so will funding. But the debt service must be paid. The end result is that there will be less and less money for the actual operating funds that can be used for paying staff and supporting the daily operations of the district.
Putting another $40 million on the district credit card in an era of declining enrollment is reckless fiscal management of the district. It will be interesting to hear from the school board members and school board candidates as this discussion evolves.
The statement, “Of course, that commits more of the operating budget to debt service, thus reducing funds for teachers, supplies, etc.” is incorrect. Operating budget is not involved in a referendum capital debt principal or interest. The levy for interest and principal is over and above operations. Similarly, the statement, “It tightens the part of the budget that can be used for actual operations….” is incorrect. There is not a direct effect on operations. The only limiting factor would be the amount of overall levy (all portions) and whether the stakeholders would be happy with the overall amount or look for something less. The proposal is to keep levies the same, potentially. But this is done my increasing interest expense and pushing debt further into the future. My concerns are that this ignores the potential for other projects long before the debt is retired, the interest expense, and need vs. nice.