School deficit projected for Edgar
A consultant from Robert W. Baird, Inc. told the Edgar Board of Education last week Wednesday the school district faces financial hardship unless it passes an operational referendum.
Debby Brunett told the school board the district will balance its budget this year with a $10.81 tax levy mil rate but, as school enrollment continues to dip, expenditures climb and state revenue caps push the district’s tax rate lower, the district will face a growing, eventually unmanageable annual deficit. She projected a $97,821 deficit in the next school budget and, four years later, a $1,166,923 deficit in 2024-25.
The projection, she said, shows the district tax mil rate will fall slowly each year to $8.31 by 2023-24 and, in the following year, after a school remodeling project is paid off, to sharply drop off to $4.75.
The district will no longer pay $3.22 in its mil rate for debt service.
Brunett said her mission was to discuss the school district’s future financial condition and not, at this point, to make a recommendation.
The consultant said the school board this year will approve an $8,245,862 budget and not either add or subtract from the school district’s $486,468 general fund balance.
The district, she said, is slated to go far into debt with no referendum. By the 2024-25 school year, she said, the district will only raise $8,347,675 to pay for a $9,514,597 budget. By that time, the district will have spent all of its fund balance and accumulated $2,435,562 in debt. That debt would represent 26 percent of its annual expenditures.
Board members, again, did not say much about what they would propose to deal with the future fiscal difficulty.
Board president Bill Dittman, however, continued to hope the district might be able to refinance its long-term debt, and, in doing so, minimize the impact of any operations referendum.
District bookkeeper Morgan Mueller said Dittman’s idea would help minimize a tax hike, but at a cost.
She said that the debt in question involves federal no-interest bonds approved during the fiscal crisis recovery. Refinancing those bonds, she said, would involve paying three percent interest on the remaining balance of the loan. Cost of that interest would likely be around $500,000.
Dittman hung onto his idea. “I don’t want to pay a big penalty, but if we can use that a bit then a referendum might be more palatable,” he said.
The school board president asked Mueller to provide information on where Edgar’s school tax rate was in comparison to other area school districts.
Brunett said the school boards in Wisconsin since 2010 have passed 68 percent of recurring referenda and 74 percent of non-recurring referenda.
She said any school referendum must be scheduled on a regular election date. In 2020, those dates are Feb. 18, April 7, Aug. 11 and Nov. 3.
State law limits school boards to hold two referenda in a single year.