By Kellen Olshefski
Staff Writer
The East Troy Schools Board of Education voted unanimously in favor of a .41 percent tax levy for its 2013-14 budget at its Oct. 28 meeting.
Business Manager Katherine Zwirgzdas brought to options before the board Monday night, stating overall the message is good.
Originally looking at a 3.72 percent tax levy increase at the annual meeting, Zwirgzdas said increased aid since the district spent less last year and Act 46 being signed into state law, will allow for a lower tax levy increase.
Zwirgzdas said in the first option, the district would increase its overall debt defeasance by 12 percent to cover increases a 9 percent increase in construction costs and a 3 percent increase in interest costs since the referendum wasn’t passed and the district is attempting to hold the same amount of defeasance. This option would allow for an overall tax levy of .41 percent.
Option two, according to Zwirgzdas, would allow the district to set a 1.96 percent levy, rather than targeting a 3 percent levy as the district had looked at prior to Act 46.
Board member Ted Zess began discussion on the topic by making a motion to choose option one, seconded by Board President Dawn Buchholtz.
Zess said he felt it makes more sense for the board to base the levy on a number, citing the 9 percent and 3 percent, and that the additional amount towards debt defeasance in option two really wouldn’t help the district with any level of borrowing capability.
“It does absolutely nothing for it and I don’t see the point of it,” he said.
Board member Mike Zei said with the district’s facilities and his focus on open enrollment, he felt option two would allow the district to do more.
However, Zess said if the board went that route, it wouldn’t change much of anything.
“We can pay down more, but we’re looking at the Fund 39 level and unless we keep raising the Fund 39 level to that same $1.92 million, it doesn’t look good, it’s not going to make a difference,” he said. “So why take extra money from the taxpayers now when it’s really not going to help us do anything.”
Zwirgzdas said she wouldn’t feel comfortable increasing the debt defeasance baseline to $1.9 million. Zwirgzdas explained when the board had a 1.5 instead of a 1.1, the difference would become referendum dollars.
Zwirgzdas described it as being similar to a mortgage on a house. If a homeowner were to pay $1,500 a month on the mortgage and then begin to pay $2,000, they would be paying down the house faster.
When the homeowner has a child that goes to college and needs $500 of the income back, they drop back down to $1,500. In the homeowner’s budget however, it wouldn’t be any different as the homeowner is still paying the money.
Zwirgzdas said this is what it was with the debt defeasance and why the district could say it had a $0 tax impact.
“Along comes a referendum, the difference is now going to be what we pay for the referendum,” she said.
According to Zwirgzdas, the district is still levying to the max in terms of its revenue limit, set at 16.2, which she said she would never encourage the board to underlevy that amount.
With it likely being a one-time occurrence that the district could go to a 1.9 baseline, according to Zwirgzdas there is no guarantee the district could maintain that 1.9.
“I could see that only being a benefit if we wanted to pay down debt and get rid of that and not have it again,” Zess said.
“We know we need a referendum, we know we need to borrow money again, so we’re always going to have debt, so I just don’t see the point of taking an extra 1.4 percent from the taxpayers for very little benefit.”
District Administrator Christopher Hibner said one of the big things that needed to be considered is a capital project is coming and it’s just a matter of when.
“I think it’s pretty important in the capital projects,” he said.
Hibner mentioned a second component is the district has faced significant shortfalls over the past seven plus years, cutting $4.5 million from the budget.
“With that all being said, there comes a point in time where we know where we’re going to need assistance from an operational,” he said.
“The question is when and to what amount to maintain our programming, to keep our programming, to keep a lot of the other things that we have.”
Hibner said he felt with option one, when the board goes over to an operational referendum in the future, it will be an easy message to go back to, showing how the district has controlled a tax levy when it asks for assistance.
“I think the more we show we controlled it again tonight, I think that’s an important message,” he said.
Zwirgzdas noted in both options, the only amount changing is the debt part, not how much the district has to spend in the schools.
Mike Zei said he felt the first option would make the passing of an operational referendum in the future more likely.
After a little further discussion, the board voted in favor of option one, setting the tax levy at .41 percent.
Board member Murray Mitten was out of town and unable to attend the Oct. 28 meeting.
