Referendum Frequently Asked Questions
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BASD has two sets of needs, and these are voted on separately.
- Day-to-day operational costs: Question 1 asks voters to approve non-recurring operational referendum to allow the district to collect $2,500,000 per year of revenue, beginning with the 2023-24 school year and ending with the 2027-28 school year.
- Facilities repairs and replacements: Question 2 asks voters of the Berlin Area School District to authorize the district borrow money not to exceed $20,000,000 for the purpose of paying the cost of a high priority/needed school facility improvement projects.
The district has not asked the voters for additional operational revenue in the 30 years that revenue limits have existed and has done a good job controlling taxes and managing or reducing expenses.
While the district continues to control costs and manage expenses, the district no longer sees any other alternatives to help it sustain the scope of programming and retain highly-qualified staff to educate students without a successful operational referendum.
Like all school districts in Wisconsin, BASD operates under revenue limits imposed by the State and these limits reduce revenue available to schools from all sources.
School districts seek operational referendums to pay for the day-to-day operations of a school district. The operational referendum pays for things such as utilities, routine maintenance, salaries and benefits of all staff, insurance, supplies, etc. Referendums are presented as a ballot question for voters to approve/disapprove.
If approved, an operational referendum gives the Board of Education authority to increase its tax levy by a set amount each year, which in effect provides more revenue for the district.
Despite efforts to reduce expenses and control costs, expenses are outpacing revenue, due in large part to inflation. The district is projecting a structural (ongoing) budget deficit, that grows about $1 million per year, resulting in a projected budget shortfall of over $5 million per year within the next 5 years.
Projected BASD Budget Deficit:
*Based on the Robert W. Baird Budget Model (prepared October 11, 2022) for the Berlin Area School District
- Expand academic and extracurricular options to adequately prepare students to be college, career, and community ready for success in the 21st century and beyond.
- Enhance instructional technology for student learning;
- Maintain educationally appropriate class sizes to maximize learning;
- Competitively compensate our staff in order to provide a high-quality and innovative learning environment.
Without a successful operational referendum, the board and administration will need to make annual budget reductions that will change the scope of programming for students.
A capital referendum asks for voter approval to allow the school board to borrow money to invest in large assets such as buildings and equipment and other high-ticket items that cannot be paid for within an annual budget. Capital improvements almost always involve borrowing money over a certain length of time, such as for 20 years, which is what BASD is seeking.
If voters approve the capital referendum, it gives the board the authority to proceed with the work outlined in the referendum question. The district is asking for $20M, to be repaid in 20 years.
The Board listened to community feedback received through the community survey and is limiting the request to $20M which will address only the highest priority items, including:
At Clay Lamberton Elementary School: Replacing 60-year old furnace with new heating, coolings, and ventilation systems; improving traffic flow, reconfiguring the entrance for safety; expanding the 60-year-old cafeteria; remodeling original bathrooms and nurse’s station to make them ADA accessible; and replacing worn-out floors, finishes, and equipment.
Other items include: Addressing traffic flow; replacing the high school auditorium’s almost 30-year-old sound and lighting systems; repairing/replacing worn-out floors and finishes.
We will work closely with financial advisors to make fiscally responsible choices, secure the best interest rates, and borrow only what is needed to complete the work.
An approved capital referendum would allow the district to make facility repairs and replacements that will result in energy efficiency and savings, improved safety, and essential repairs.
After the facilities study was completed, we involved staff, the board, and the leadership team to identify the high-priority items. Through a community survey, we found support for the following items including in the referendum question:
Clay Lamberton Elementary School Improvements:
- Heating and cooling: Replace the original, inefficient heating system with new equipment to reduce maintenance costs and increase energy and efficiency. Add a new cooling system in the oldest part of the school.
- Safety and accessibility: Reconfigure traffic flow to better separate pedestrians and vehicles.
- Replace the playground structures and play surfaces for safety and ADA accessibility.
- Renovate the main entrance and upgrade the security camera systems to improve student safety and allow for the screening of visitors.
- Update the restrooms and the nurse’s station which are original to the building for safety, cleanliness, and ADA accessibility.
- Expand the cafeteria and create a large group meeting space:
District-wide Improvements:
- Reconfigure traffic flow to better separate pedestrians and vehicles to improve safety.
- Replace the district auditorium’s lighting and sound systems that are failing.
- Upgrade security camera systems to improve student safety.
- Replace high school classroom and hallway flooring where needed.
This has been a volatile time to predict expenses, interest rates, and inflation. The district has been working closely with experts such as Performance Services, Inc. and Robert W. Baird & Co. to estimate the cost of projects and future interest rates in order to make sound financial decisions.
The law allows the board to only levy in taxes the amount the voters approve via the referendum questions. It cannot exceed the approved referendum amount and funds must be used only for the purposes indicated.
Approval of the operating referendum is expected to result in no tax mill rate increase, assuming the Wisconsin Department of Revenue does not increase the fair market value of properties.
Approval of the capital referendum would result in an estimated tax increase of $40 for each $100,000 of property value over the current level.
School districts establish tax mill rate per $1000 of property value. The BASD’s mill rate has remained steady for several years. If the operating referendum does not get approved, the district may need to reduce the scope of educational opportunities offered in order to reduce expenses.
The District projects $0 impact on the school tax mill rate for the operational referendum portion only. This is possible because the BASD has been prepaying debt and controlling costs to keep the school tax mill rate steady.
However, we can’t predict the fair market value of each home in our school district. Individual owners may see their overall taxes fluctuate with the fair market value of their home/property.
Like all Wisconsin schools, BASD operates under state-imposed revenue limits that restrict the amount of money a district can receive. Over the years, our revenue limit has decreased.
School district revenue has decreased much faster than our ability to save money, and day-to-day operating expenses are outpacing revenue. Costs for things like running our buses and heating our schools continue to increase, as do other expenses that are out of the district’s control.
The operating referendum is based on a projection of future enrollment and revenue limit authority given to the district by the State legislature. While future state budgets are somewhat unpredictable, there are reliable data to show that the district should plan for a budget deficit, starting next school year and continuing well into the foreseeable future.
The district is projecting a structural (ongoing) budget deficit, that grows about $1 million per year so that without an operational referendum, the district’s budget shortfall will grow to over $5 million annually within the next 5 years.
The solution to this problem will require the board, supported by the administration, to take a three-pronged approach:
- Continue to manage and reduce expenses according to student enrollment and needs.
- Continue to reallocate funding between accounts to sustain necessary programming.
- Ask voters to increase our revenue limit authority through an operational referendum on the April 4, 2023 ballot.
The District has taken the following action to reduce expenses:
- Reduced supply budgets.
- Pre-paid debt, saving taxpayers almost $800,000 in interest.
- Reduced staffing levels by not filling unnecessary positions saving $100,000 to $150,000 annually.
- Increased energy efficiency by replacing antiquated lighting with LED Lighting Project
This question involves two terms used when describing school taxes. The school tax mill rate and the total tax levy. The mill rate is a fraction, described in dollars and cents, which is computed by the total levy over equalized property value, and expressed as “dollars per $1000 of property value”. The tax levy is what the district can collect from local taxes, according to the revenue limit that is set by a state formula. This is the district’s revenue authority.
When the tax levy is spread over more property value, it might drive down the mill rate, but it does not increase the total amount the district has the authority to collect as the tax levy. So while individual property owners may see a change in the amount of taxes they paid because their fair market property values went up (or down), the district did not get more revenue authority or total tax levy.
As a response to costs associated with the COVID-19 pandemic, the federal Elementary and Secondary School Emergency Relief Fund (often referred to as ESSER funds) were issued to states to utilize in covering costs for schools. The funding was divided into three ESSER fund periods, ESSER I, II, and III. Each funding period had different amounts, different sunsets, and different rules.
For ESSER I, the district received $245,000 which was used for COVID-related supplies, health materials, virtual learning, technology for virtual learning, and student interventions. ESSER II provided the district with $1,026,000 which was used for COVID-related supplies, literacy, and math interventions for learning loss, social emotional learning and learning loss, mental health supports, virtual learning, and technology. ESSER III, which is the last allocation and must be used by September 2024 is still being spent. The plan for ESSER III had to be shared in a public meeting and was presented in February 2022. For this fund, the district can claim a total of $2.3 million and had to have a district plan approved by the state. In that plan, $1,000,000 is set aside for HVAC work to improve air quality and safety. These dollars would be combined with the funds from a successful capital referendum to improve HVAC systems at Clay Lamberton Elementary and the high school. If the capital referendum doesn't pass, these funds will be allocated to replacing worn-out heat pumps at the high school. The remaining $1.3 million of ESSER III is being used for mental health services for students, learning interventions and curriculum, professional development, and special education costs including staffing that increased due to COVID.
The intended purpose of the federal COVID relief funds, referred to as ESSER I, II, and III was to cover the costs of COVID on schools, expenses including air quality, supplies, transportation, interventions, mental health, technology, virtual learning, and other related costs. These are all one-time funds through grant dollars and should be used for one-time expenses.
In Wisconsin, the legislature chose to freeze annual per pupil levy authority for the last two years, and told districts to offset the reduction in revenue increases by using their ESSER funds. Most districts, as was the case in the BASD, chose to limit the use of ESSER funds to COVID-related support, rather than balance their budgets, because any balancing of budgets would create a "fiscal cliff" where the costs paid by one-time ESSER funds would then create even further deficits in the future when the funds run out in 2024.
This is the first year in the BASD where we have used any ESSER funds to balance the books, with a payment of $350,000 going into our fund 10. One of the primary reasons a record number of districts have had to go to an operational referendum this school year is due to the fiscal cliff and the freeze in annual per-pupil levy authority increases.
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