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Brown Deer school budget shortfall creates challenges

Debt-refinancing referendum is among the options considered

Feb. 26, 2014

Brown Deer — The preliminary Brown Deer School District budget presented Tuesday revealed a projected $400,000 deficit, prompting one district official to suggest voter approval might be necessary to refinance debt to help balance finances.

Director of Finance Emily Koczela proposed such a referendum, which if approved would enable the district to enact a strategy that would allow to adjust its budget without raising taxes. This same scenario was used in the 2012-2013 school budget.

"It would erase whatever debt we choose," Koczela said.

The referendum, which could be brought to voters as early as 60 days after the board decides to proceed, would also have to be presented to the public in a way that helps people understand its intent, she said.

"You have to be truthful (to voters)," Koczela said. "We are not charging (taxpayers) anything. ... We are just refinancing debt for the purpose of paying it off."

Board member Michael Bembenek, who suggested keeping the budget's property tax levy at a zero increase, said the public needs to understand the value of paying down debts as it pertains to taxes.

"As debts go off, we will have room to keep the levy at zero," Bembenek said.

Falling revenue

Several factors have contributed to the school district's budget shortage.

The revenue cap for this school year fell by $300,000 due to diminishing Hold Harmless Aid, which the district was granted to alleviate the cost of falling enrollment four years ago. This year is the last year that feature will benefit the district.

The number of Open Enrollment students is projected to drop for the 2014-2015 school year, costing the district $1.3 million in state aid.

"The district is intentionally admitting fewer OE students at the elementary level because the building is at capacity," Koczela noted.

Her presentation also revealed that a $60,000 No Safe and Supportive Schools grant won't help the district's next budget. The three-year grant expires after this school year.

Increasing expenses

Personnel requests for the next school year amount to nearly $1 million increase, which includes salary and benefits.

The Wisconsin Employment Relations Commission has also authorized 1.46 percent increase in raises, which it calculates for districts as a result of Act 10. For Brown Deer, this means about $170,000, if everyone in the district were to receive a raise.

Koczela estimated that health insurance renewal costs may run between 0 to 5 percent.

Substitute teacher pay also adds to the district's expenses, but District Administrator Deb Kerr said staff has been "mindful," doing what can be done to control those costs, including teachers who are "trying to limit time out of the building."

"Some teachers are going to a conference on their days off," Kerr said, as one example.

Administrative staff has also considered outsourcing custodial services, but School Board President Gary Williams encouraged the district to consider all the available choice, in that regard.

"Are we looking at a range of options from completely out-sourcing custodial to not doing it at all?" Williams asked. "The middle being outsourcing some part of it, keeping some of the staff."

Koczela responded that she was considering all options, but added "Some staff are priceless."

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