The Lakeland Union High School held the first of six public information sessions last Thursday, Jan. 30, leading into the districts proposed referendum on the Feb. 18 ballot.
In October, the LUHS district school board approved a resolution for the district to exceed its revenue limit by $3.45 million in a recurring operational referendum following the recommendation from the board’s ad hoc referendum committee.
At the public information session Thursday, district superintendent and curriculum director Rob Way, alongside business and finance manager Greg Kopp, broke down the reasons the district was seeking the referendum.
“It’s our mission to provide learning opportunities to help students be successful if they choose to go on to a four-year university, two-year technical college, to the workforce or in the military,” Way said. “Our board of education really has a vision of bringing communities together and sharing in that responsibility in reaching the needs of all of our diverse student population.”
Why a referendum?
Kopp explained the district’s decision to pursue the referendum from a financial standpoint.
“In the State of Wisconsin, the state imposes a cap on the amount every school district can levy through property tax every year,” Kopp said.
The only way a district can exceed that limit is to go to referendum.
He further explained the district had hired a financial consultant to assist the district in developing a five-year financial forecast which indicated the need for the district to exceed its revenue cap by $3.45 million to cover its financial objectives over the next five years.
Kopp shared data from the district’s general education fund, and the district’s special education funds.
According to Kopp, revenues from the tax levy decreased by approximately $4.8 million since 2014, with increasingly less levy every year after.
“If we could’ve levied $10.6 million every year moving forward over this period of time, we would’ve generated an excess of $4.8 million of more revenue,” Kopp said.
That gap between tax levy revenue and recurring operating expenses, Kopp indicated during the presentation, was only increasing and the financial model suggested the need to exceed that revenue limit to cover those increasing expenses.
Kopp then addressed what he described as a “misconception” that the fund balance was equated to cash, when in actuality the fund balance was equal to the district’s assets minus its liabilities.
“In 2014, we had a fund balance of $10.6 million. At the end of June 2019, it was at $7.2 million,” Kopp said, stating the fund balance was projected to be $6.8 should the district “hit budget” at the end of 2020.
He added that, for the past six years, the district had been running on a deficit, though some of them had been planned due to the district renovating some facilities whereas others were from expenses running higher than revenue.
Kopp explained the payment cycle for the fund balance as three payments distributed throughout the year, once in January, once in February and once in August.
“We have to go six months into the fiscal year before we receive any of our tax levy dollars,” Kopp said. “So we need fairly large fund balances which generates cash reserves that enable us to pay our bills without short-term borrowing.”
Mill rate and costs to taxpayers
Should the referendum pass, the district’s mill rate is expected to go up from $1.82 to $2.33.
Currently, the district has one of the lowest mill rates in the state, and has the lowest mill rate when compared to other union high schools in the state.
Kopp pointed out that, even with the increase in the mill rate, it would still be lower than the district’s $2.88 mill rate in 2002 and would level out in the years following the referendum.
On a $100,000 home, the yearly cost of the referendum would be approximately $52; $104 on a $200,000 home and $156 on a $300,000 home based on current assessed value.
How will funds be used?
Way said while it was unusual for the Lakeland Union district to approach taxpayers for an operating referendum, he added it wasn’t unusual for school districts in Wisconsin to go to referendum, citing that 80% of schools in the state have gone to referendum.
Way explained the referendum was for ongoing operational needs and broke down the funds into three categories: instruction, facilities maintenance, and student educational support.
Aside from recruiting and maintaining employes, Way cited modifying, diversifying and expanding its curriculum, activities and athletics offerings for student and community use as some instructional aspects the referendum funds would be used for.
Way identified stadium renovations, pool and fieldhouse upkeep and renovations, and security system upgrades among the facilities maintenance items the referendum would address.
As far as student support, Way said academic intervention, specialized education, and expanding school to work programs as a few areas the district would use the additional funds for.
In a possible spending scenario, the referendum amount was broken down into $1,588,250 allotted for capital improvements and $1,062,311 for new staffing over the next four years.
That figure includes the salary and benefits of 14 staff members, some of which have already been hired this fiscal year according to Kopp.
“Because this cost is recurring year after year, this referendum is going to have to go to pay for these increased positions year after year,” Kopp explained.
From there, $547,439 for inflation was built into the model as well as $252,000 for fund balance to keep the fund balance at an optimal level for to make a total of $3.45 million.
“One of the goals of the model was to increase our fund balance and grow it back to the $8 million,” Kopp said.
Six million of that, according to Kopp, is so the district doesn’t have to do any short-term borrowing while the remaining funds were for unforeseen expenses.
Should the referendum pass, Kopp said the board would develop a better idea of which projects could be done and when.
“Every year we’re going to look at the needs of our students and we’re going to spend the money based on the needs of those students,” he said.
Approximately 30 people were in attendance for the public information session, with concerns raised over the district’s declining enrollment, how salary and benefits were calculated, and whether the district would’ve been better off asking for two separate referendums for operating costs and capital improvements.
Minocqua resident and town supervisor Billy Fried said one of the confusing parts was the presence capital projects included in the operational referendum.
Additionally, he said, as a taxpayer, he would prefer to see the capital projects separate from the operating costs.
“I know what that money’s going for, and when it’s done it comes off the levy,” he said.
As far as operational, he understood the costs to educate students wasn’t going to decrease.
“I know it’s a lot easier to spend money when it’s there than coming back to the taxpayers and asking them for specific capital projects as you move along,” Fried said. “If this should move forward for you guys, I hope you would consider coming back with maybe a referendum just for the capital expenses and the operational. I think it would be easier to digest.”
“You have to realize that not only do we support this school as a taxpayer, but we’re also supporting our own elementary school, which adds another chunk to our tax bill,” Katie Grundy said. “And there’s nothing to stop them from coming back and asking for their chunk of the money also.”
Grundy asked how the health insurance was provided for the staff, whether the district offered family or single plans, and the district’s total health insurance annual bill.
While Kopp couldn’t provide an exact figure on the district’s insurance bill, he said employees could elect to take a single or family plan.
He added the district paid 90% of the premium regardless of whether it was a family or single plan, but there was a $4,000 deductible for a family plan and $2,000 for a single.
Woodruff resident Don Tatalovich asked about the decrease in student enrollment in recent years and the increase in teachers.
Tatalovich said cutting teachers and moving toward a 20-1 student to teacher ration over the district’s current 12-1 ratio would save the district a significant amount of money.
He described the referendum as a “big burden” on the residents.
“We can’t keep up with the student decline and the teacher increase over status quo and keep paying for it,” he said.
Kayla Houp may be reached via email at [email protected].