When is a good time to go to referendum?
District Administrator Gary Hansen
When is a good time to go to referendum? Of course the easy answer that everyone would like to hear is “never,” but as they say, nothing worth having ever comes easy. Your locally elected school board feels strongly about the education provided to the students of the Rosendale-Brandon School District, and therefore has been wrestling with this question since June. As you may recall, my article last June alluded to the possibility of an upcoming referendum, so while I know you don’t exactly enjoy reading articles regarding finances, an update is necessary.
At their meeting in October, the school board decided to delay going to referendum due to the Fund Balance our district currently has on hand. A school district’s Fund Balance is comparable to a household savings account, and should only be used for emergencies; to use it for a reoccurring expense simply means the savings account no longer exists. Since the last referendum, we frequently hear citizens say that we should draw down the Fund Balance before asking for a vote on a referendum. Doing this means we will need to do short-term borrowing and the savings account for emergencies is gone, which ultimately means we will pay interest on the short-term borrowing and the district’s credit rating is down-graded, making it difficult to receive lower interest loan advances if/when needed.
With that said, there are several concerns looming that will influence the board’s decision in the near future. First, the operational costs for this, the 2013-2014 school year, will require the district to take $448,901 from the Fund Balance to cover shortages. Next summer, we are faced with two major Buildings and Grounds projects. One is to replace the boiler at Laconia, which is over 40 years old and causing problems, at a cost of $180,000. The other is to replace a large section of Laconia’s roof which was scheduled for repair three years ago, at a cost of $237,000. Looking into the future, beyond the summer of 2014, we face a projected deficit of $601,901 in the 2014-2015 school year. After covering all the aforementioned costs the district’s remaining Fund Balance by June of 2015 is projected to be $1.33 million. When looking at this dollar amount as a percentage of yearly expenditure, we will be at 12% which is lower than the state of Wisconsin’s suggested minimum School Fund Balance of 15%.
So at this point, all I can say with certainty is that the district is in good financial standing, with a Fund Balance supportive of currently anticipated deficits, and therefore the board has decided to forego a referendum this coming spring. But you can see we are soon back to the question the school board will need to ask, and the citizens will need to answer, “Where will the district turn to finance anticipated deficits after June of 2015?” Conversations about finances are not always pleasant, but adequate financing is a “behind the scenes major player” in our ability to maintain leadership in education by offering students the programs and opportunities necessary to be successful.
As always, we thank you for your continued support.