Salem district to hold operational referendum

Officials don’t expect approval to raise tax rate

By Gail Peckler-Dziki
Correspondent

The Salem Grade School District will seek approval from voters to exceed state revenue limits for a period of three years in the April 4 election.

According to Salem Town Clerk Cindi Dulaney, the municipality received the referendum question from the Salem School Board.

Residents within the district will be asked to respond, yes or no, on the question slated to appear on the April ballot.

By putting referendum on the general spring election looks to save the district about $10,000 over the cost of a special election, District Administrator Dave Milz has said in earlier board meetings.

The referendum asks residents for permission to exceed revenue limits by $870,000 for the 2017-2018 school year, followed by $1,070,000 in each of the next two academic years.

It reads: “Shall the Salem School District, Kenosha County, Wisconsin, be authorized to exceed the revenue limit specified in Section 121.91, Wisconsin Statutes, by $870,000 for the 2017-2018 school year, by $1,070,000 for the 2018-2019 school year and by $1,070,000 for the 2019-2020 school year, for non-recurring purposes consisting of general operational costs associated with maintaining the current levels of education programming, technology and facilities?”

Previously, residents approved a similar referendum, but for school facility improvements and not operational expenses.

A certain portion of that debt is dropping off, and the money is no longer needed for debt repayment.

Both Milz and district Business Manager Susan Jarvis have told the School Board numerous times that since debt is dropping off, a referendum approval would not increase the mill rate for district taxpayers.

Currently, Milz reports, the school budget is balanced with the money going to debt payments, but the district fund balance is at stake.

“If the referendum is not approved, we will continue to dip into the fund balance, and eventually need to engage in short-term borrowing to pay bills at times while we wait for tax payments to arrive,” Milz said.

In addition to providing funds to meet financial obligations between tax payments, a stable fund balance gives the school a stronger financial rating, and in turn, allows the district to receive lower interest rates when borrowing is needed.

When the debt is retired, without a referendum, the mill rate would drop from $7.73 to $6.69. The savings for a property valued at $100,000 would be $104 annually.

The district currently has a fund balance of $2.7 million and a budget surplus of over $113,000 for the current year.

According to the forecast received by the district from Baird Financial consultants, even with a non-recurring operating cost referendum of the requested amounts, by 2018-2019, the district will begin running a budget deficit starting at $102,000 and ending up at $2.1 million by 2021-2022.

If the non-recurring operating cost referendum passes, the mill rate would rise from $7.73 in 2016-2017 to $7.79 for the next two years, rising to $7.95 and the dropping to $7.07 in 20-21 and $5.71 in 21-22.


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