The Boscobel School Board held two Committee of the Whole meetings in the last week to address referenda questions.
One referendum question will seek approval for the school district to exceed the state imposed revenue limit by $1.5 million; the second possible question will seek permission to borrow up to $20 million to build an addition onto the middle/high school to create a single campus housing all Boscobel Area School students.
Over 100 interested members of the community were in attendance to hear presentations on the possible referenda for the Boscobel School District on Wednesday, Jan. 6.
Consulting business manager Carol Dyer walked the school board and audience through the financial picture for the district, which currently faces nearly $1 million in deficit spending with the current budget.
Using a budget forecasting model recently purchased from Baird & Associates, Dyer explained the financial outlook, explaining that declining enrollment paired with declining revenue is “catching up with you.”
Dyer offered two scenarios to illustrate how the referenda could impact the district’s financial outlook and tax levy.
The current financial forecast without the referendum monies shows the school district with a $1.17 million deficit in the 2016-2017 school year, a $1.6 million deficit in 2017-2018, a $1.8 million deficit in 2018-2019, a $2.12 million deficit in 2019-2020, and a $2.6 million deficit in 2020-2021.
Scenarios for exceeding
the revenue cap
The first scenario used a recurring three-year referendum to exceed the revenue limit for a total of $1.8 million implemented through staggered increases. In the first year it would raise the levy amount by $950,000. The second year it would be raised an additional $650,000 (for a total of $1.6 million). And the third year it would be raised another $200,000 to a total of $1.8 million beyond the state revenue limit. This would remain the tax levy after the referendum period ended until such time as the board took action to change it.
The second scenario was a non-recurring three-year referendum that exceeded the revenue limit by $1.1 million the first year, $1.6 million the second year, and $1.8 the third year. The fourth year would see the tax levy revert to the state revenue limit. Under this referendum, the school board would have to hold another referendum the third year to address the funding $2+ million deficits forecast for the 2019-2020 and 2020-2021 school years unless there were a change in school funding legislated at the state level that resulted in more aid being directed to the district.
Building referendum
HSR Associates President Bradley Simonson, HSR architect Tim Rupert and Kraemer Brothers Vice-President of Client Services Greg Callin headed up the presentations on the possible building referendum scenarios.
One referendum scenario creates a single school campus for $20 million. This would build a central area on the front of the middle/high school housing a new gymnasium, district offices, cafeteria, library, and commons area that would then be flanked by east and west wings holding the pre-Kindergarten through sixth grade classes.
The advantages of a single campus is increased district efficiency, reduced maintenance requirements, improved parking, improved traffic flow, improved supervision and safety of students, and an estimated 12-18% energy savings (an estimated $21,445 per year), according to Ruppert.
The second scenario, for $14 million, creates fewer new classrooms and reduces the school district to a two building campus – the elementary school and the middle/high school with the new central addition and classrooms to house those students currently being served in the Annex and Rock School buildings.
Both scenarios involve addressing the HVAC and building envelope (bricks, mortar, windows, roofs, etc.) concerns at the middle/high school.
Callin stressed to the crowd that neither Kraemer Brothers nor HSR Associates were currently under contract with the district. Their work thus far was pro-bono and the district was free to choose any firms they wanted to have do the work if the referendum passes.
Robert W. Baird & Co. provided the financial analysis of how the referendums might impact the district mill rate. They estimated that the $20 million referendum would add $3.44 per $1,000 of equalized value to the tax levy. They estimated that the $14 million referendum would add $2.43 per $1,000 of equalized value to the tax levy.
Callin also stressed to the assembled crowd that delaying the building referendum until November would delay completion of the project by a year and would have higher costs due to inflation.
The school district has a bonding capacity of $27 million, pointed out Simonson. That meant that while the district had the financial capacity for the addition, an all-new school campus is out of the question, as they cannot borrow enough for such a project.
In answer to questions on the bidding process, Simonson said that all bidding would be competitive and bids would be opened with the school board and those members of the public that wanted to attend. He also noted that if their firm were selected to work on the project, they would make a point of reaching out to local contractors and suppliers.
“We will sit down with them and help them through the plans if they need us too,” Simonson said.
Another meeting
The second meeting, held in the district office meeting room on Monday night, focused on the financial impacts of the referendum.
Carol Dyer was again on hand, working with District Administrative Assistant Heather Breunig to explain the two scenarios they created to address the operating shortfalls the school is currently facing.
After working with the school administration, Dyer noted that the deficit for the current year had been cut by $80,000. But that still leaves the district facing a deficit for the current school year of $941,911.
While the two scenarios ask for the same amount of money and will still require the district to continue finding ways to economize, the outcomes are starkly different when looked at four years down the road.
Both scenarios offered mill rate estimates based on both the revenue limit and the $20 million building referenda passing.
The recurring referendum with the building referendum would result in mill rates (per $1,000 in property value) predicted at:
2016-2017 $13.16
2017-2018 $14.53
2018-2019 $14.63
2019-2020 $15.68
2020-2021 $14.52
The non-recurring referendum with the building referendum would result in mill rates (per $1,000 in property value) predicted at:
2016-2017 $13.67
2017-2018 $14.52
2018-2019 $14.58
2019-2020 $9.84
2020-2021 $8.92
“Baird made it clear at the annual meeting that the best way to help the school in the long run is to keep our students and to attract open enrollment,” said board vice-president Chuck Owens. “We have to make our school attractive to retain students.”
“You’re right, but that is difficult to do in a community that is so divided,” replied audience member Wendi Stitzer.”
“But what is the interest on the referendum?” Jonathan Knowles asked rhetorically. “It’s 11 million. Why can’t we run a referendum to repair just the HVAC at the middle/high school?”
Both Owens and board president Todd Miller pointed out that fixing things piecemeal ultimately became more expensive as accumulation of problems, aging equipment and inflation were compiled.
Miller noted that he had put up a survey on the school district’s Facebook page, but was unable to view all the results without paying for access. After some discussion, it was agreed that he would work on creating an alternate survey that would not cost money to view the results. A link to the survey will be placed on the school district website and sent out via Skyward alerts to those with registered emails.
There was some contention as to the value of an online survey, with Mark Knowles speaking up from the audience to say that the method was neither scientific nor reliable.
“We have to make a decision and approve the wording on the resolutions to have to the municipalities by Jan. 26,” Miller said.
The board needed feedback and quickly, Miller pointed out.
“My biggest worry based on the feedback I am getting is that with the fear factor over borrowing $14 or $20 million is too great to overcome by April,” Miller explained. “We have to have a referendum asking to go over the revenue limit just to meet operations. If we have both on the ballot at the same time this quickly, we risk losing (the one we need most.)”
Knowles spoke up to say he agreed with the idea of having the building referendum on the November ballot.
Miller went on to say he was uncomfortable with the recurring ballot and that he feared a long-term prospect of higher taxes was less likely to gain favor with voters than the three-year non-recurring referendum that would return the mill rate to lower levels unless an additional referendum was passed in three years.
“We know we need it now,” Miller said. “We don’t know that we will need it in four years. If we lose this now…”
Breunig pointed out that the board could lower the levy rate after three years with the recurring referendum. The only constraints would be that it could not be raised back up without another referendum and if lowered two years in a row, it would drop back to the state imposed revenue limit.
Asked by Miller for feedback from those in the room, Knowles again spoke saying he felt the recurring referendum was too confusing.
“If you don’t do the recurring model, you better let people know you will be coming back in three years to ask for more,” Dyer said.
“If you don’t put it out that you’ll be back to ask for more, people will wonder what the heck the board was up to with that money,” added Stitzer. “I really think people want a long-term solution.”
Those who would like to respond to the online survey the board has created should visit http://ow.ly/WYE6z.
The school board will meet in the district office meeting room at 6:30 p.m. on Monday, Jan. 18 for their regular board meeting.
