April 4th is just around the corner and we felt it was important to address some serious concerns around this year’s referendum.
There’s been a lot of information put out into the community in recent weeks, and not all of it is accurate, about our school district.
It’s great that people are engaged in this process and are suggesting creative ways for the district to cut costs. Finding efficiencies is important for all districts and is certainly an ongoing process for us as a district regardless of referendum.
What’s challenging is when information shared isn’t true, or only shows a small segment of data. It may sound harsh but: It’s actually illegal.
In the State of Wisconsin, it is illegal to knowingly publish or cause to publish information that is false in order to advocate a vote for or against a candidate or referendum. It’s Wisconsin State Statute 12.05. There’s even a Wisconsin Supreme Court case around it.
That being said, our commitment remains to share accurate information about our district. Below, we’re addressing a number of inaccurate claims shared in recent weeks.
You may have heard that we’re the “6th highest spending district in the state…”
This statistic is using a small segment of data and published as is, without any parameters around the data segment is just not true on its face. When it comes to per-pupil spending, we’re 93rd in the state.
We’re only Number 6 if you look at districts with more than 3,000 students…
We’ve always been transparent about this: We spend more per-pupil. We spend more in the classroom, in course offerings, in educational assistants, in neighborhood schools, in gifted and talented, in career prep, in alternative education and in facilities. We spend less in administrative costs.
What pushes us up the Wisconsin Department of Public Instruction’s database, which you can find here, is that we’re higher in food & community service. We’re one of approximately 30 school districts in the state that have Community Education & Recreation as part of the school district, and it drives up our total district cost per student.
Here’s our overall ranking out of 423 districts with provided data:
Educational Cost: 135th
Transportation Cost: 233rd
Facility Cost: 137th
Total Educational Cost: 121st
Food & Community Service Cost (We provide Community Education): 24th
Total Cost: 93rd
You may have heard “Governor Walker is going to give the schools more money…”
The answer here is murky. We won’t know until late June and we need to issue teacher contracts for next year by May 15th according to state law. The approximate $400 per pupil for the next two years that the governor is proposing is still just a proposal. The stipulations around being given the funding are still unclear AND the budget still has to go through rounds of discussion with state-level committees as well as pass the senate and assembly.
So far, State Sen. Alberta Darling has told us we shouldn’t count on the funding coming through. State Sen. Leader Scott Fitzgerald has said that he thinks there will be increased funding but definitely not as much as the governor proposed and Assembly Speaker Robin Vos said that he’d push the budget approval out to October in order to find a long-term solution to funding transportation. As it stands, the state has a $939 million budget shortfall in transportation.
That budget is supposed to be approved in June, and a lot can change between now and then at the state level. The additional funding will cover some but not the district’s entire deficit if the referendum fails.
That being said, our board has voiced that IF we receive the new state funding AND the referendum passes, they will under levy, meaning only taking what is needed to cover the deficit and not going above the funding needs as proposed in the referendum question.
You may have heard “The district could get millions for the TJ & Hiawatha properties…”
There’s a ton of speculation about how much money the district could get for this property. Some have said as high as $2.5 million. We don’t know how that number has been calculated and there’s no data source to prove it. But here’s what we do know:
- TJ & Hiawatha is approximately 14 acres in a residential area in the middle of the city.
- Part of this property is wetland. If you’re old enough to remember when TJ was built, you’ll remember there was intent to put in track & field which never happened because it always flooded. Check out the original rendering here.
- Currently, in 53051, there are 7 parcels of land that are 10+ acres the average price per acre is $75,000. Even at that rate per acre TJ & Hiawatha would be sold at $1 million. If you base the selling price of TJ & Hiawatha off of the Lilly Creek sale price, the district would only receive $550,000.
- The district has no intent to sell the property and is holding it for future use.
You may have heard “The district has a $4.1 million ‘surplus’….”
So here’s the thing. Using the term surplus fund balance is inaccurate. That $4.1 million is considered “unassigned funds” and it’s a part of our fund balance. Right now the fund balance is a total $11 million and it’s used for cash flow purposes. By November we are cash negative and the district needs to borrow funds until revenue is received in February. It is also used for unexpected expenses like the air handler that went in at the high school last year.
But let’s take it down to a personal level.
Think of the fund balance as part savings account and part checking account.
As an individual, they say that to have a good safety net that you should have 6 months worth of expenses saved away in the unfortunate event that you’re not working.
School districts operate the same way.
So the fund balance is there partially as the district’s savings account. Right now we have about $11 million in the fund balance. It may sound like a lot, that amount is actually less than what is recommended to have a “healthy fund balance” for districts our size and with our Bond rating (bond rating is kind of like a credit score, it impacts our ability to borrow and get better interest rates). Ours is Aa2.
Healthy fund balance for districts with Aa2 Bond ratings: 25%
State average for fund balance: 20%
SDMF fund balance: 22%
You may have heard “Why don’t they use the Lilly Creek money…”
You’re right. We could do that. But it’s not sound financial practice.
The back story is that the district has approximately 24 acres behind Appleton & Good Hope in the Lilly Creek subdivision that was put up for sale. The district has an accepted offer and will receive approximately $900,000 from the sale which will be finalized in late April.
In accounting terms, it is unwise to utilize a one-time dollars towards costs that are recurring. Simply put, using the Lilly Creek funds to offset approximately one year of the deficit is like selling your car to make your rent payments.
You may have heard “They can just privatize services and save $400,000…”
One of the sources cited is the Mequon-Thiensville district who privatized custodial services to the tune of $350,000 in annual savings. You can find that article here. There was a similar cost savings with New Berlin School District, also cited as a source. You can find that article here.
We actually did a cost-benefit analysis last year around this very topic… our cost savings was approximately $160,000. We are designing our delivery model in order to match the savings but do so with our own staff. Our staff members are typically residents. The facilities team also analyzed a collaborative cleaning program that could save $150,000. You can find that information here.
You may have heard “Your employee insurance contribution is only 13% some districts are 25%….”
It’s true, our employee contribution is 13%, and that’s nearly double what it was last year. But to say other districts are at 25% (or to suggest we should be at 25%) is not sharing the full comparison.
You see, we actually did benchmark this and surveyed approximately 30 other districts in the area. We’re median in our contribution rate and that district at 25%? Well, let’s take a look at how we compare:
Contribution rate for employees: 13%
Single deductible: $2,000 in network
Family deductible: $4,000 in network
Contribution rate for employees: 25%
Single deductible: $500 in network
Family deductible: $1,000 in network
Not all insurance policies are created equal in the private sector and the same goes for school districts too. Basing whether or not Menomonee Falls has a good or sufficient insurance policy on contribution alone is obtuse.
You may have heard the suggestion that we should implement a spouse surcharge or restructure payments for people that aren’t taking our insurance…
If you check out that spreadsheet above, only one district out of the approximate 30 does something along the lines of a surcharge or carve out. If we were to make this change, we would no longer be competitive with the market.
Since we’re a self-funded plan, incentivizing employees to seek health care elsewhere serves us in the long run.
Eliminating this benefit would result in some of these employees coming back on our plan. As a self-funded plan, the cost impact would depend on the health costs of those that chose to enroll in our plan. High-level projections by the District’s actuary put the net savings at close to $0 with the assumption that claims would be lower than the overall population on our plan. If the claims are average or greater than average there would be a net cost to eliminating this benefit. We are looking closely at options in this area as we plan for the January 2018 plan.
You may have heard the suggestion that we have the ability to kick retirees off of our healthcare plan…
We don’t. As a district, we are contractually obligated to provide health care for the remaining retirees. Not doing this would put us at liability for a lawsuit.
Only those that retired prior to July 1, 2013, were offered retiree health insurance. Retirees after July 1, 2013, can only continue on our plan using federal COBRA rules and pay the full premium for a maximum of 18 months, per federal law. We have made significant changes to benefits for all employees in the last 5 years (which reduced the retirement benefit liability by 67% or more than $16.9 million).
Still have questions about our insurance? Check out this FAQ here.
You may have heard the suggestion that we should eliminate any post-retirement payout…
Currently, the district provides a payout for future retirees who retire at 57 and have 20 years of service. That amount does not exceed $90k for admins and $75k for teachers. The District eliminated over $16.9 million in future retiree liability costs by moving to this benefit.
Of the districts we surveyed, many offered some sort of similar TSA. If we were to eliminate this we wouldn’t be market competitive with other school districts.
You may have heard “The district is lying about being broke…”
We’re not broke. We’ve never said that we’re broke. We have been very open with the value our community has placed in sustaining lower class sizes and a broader range of programming.
We’re committed to being both a strong fiscal manager of taxpayer dollars AND provide a quality education to children in a community that values small class size and a wide range of course offerings all while dealing with a revenue limit that does not pace with inflation.
This causes a pain point that while we’ve made more than $11.15 million in reductions and cost savings is at the point where we have to make decisions that will make the way we do education look different.
We’re giving that decision to our community. Our village should have a say in how we educate children and that’s why this question is on the ballot on April 4th.
Ok, what about that Carnegie trip….
Annually we raise $75,000 per year when we host our improvement visits to our school district. Participation in the Carnegie Summit will cost $34,443 for the 13 members to attend. The total cost for our participation is offset by the professional development we conduct for other districts, private schools, charter schools and private industry. We reinvest the dollars raised to the strategic learning priorities for our team members.
That being said, here’s a little perspective on how much our district spends on personal development in general:
As a district, we dedicate less than .5% of the budget to development. We select carefully the learning opportunities that directly align with our areas of focus. With the revenue from our two Improvement Visits per year, our district investment annually for development is less than .4%.
Thank you for taking the time to read all the way down here.
It’s crucially important that our community is well-informed on April 4th.
Your vote matters. Go vote!