Janesville School board to take up debt issue
So is the principle, for that matter.
On Tuesday, the Janesville School Board will consider yet again how to deal with the Wisconsin Retirement System debt.
The current debt is about $17 million, explained Keith Pennington, the district’s chief financial officer. If only the required payments are made, that amount would grow to about $30 million by 2029.
Since the issue surfaced several months ago, local taxpayers have been asking where such a whopping debt came from and what could have been done to prevent it?
Unfortunately, because the answer to the first part of the question is “the state,” the answer to the second part of the question is “nothing.”
Nearly every other local government unit—cities, counties, villages and towns—incurred this liability in the early 1990s, when the state Legislature increased retirement benefits.
The state Legislature based the retirement system debt on a set of assumptions about growth.
“It’s unfortunate that those assumptions were made,” Pennington said wryly.
At a recent meeting, the school board voted to use $300,000 from the district’s fund balance toward the debt, a move that saved $23,400 in immediate interest charges and $1.56 million before the total bill is paid.
Pennington has been working with finance companies that specialize in working with school districts to develop a loan package.
Currently, the district pays about 7.8 percent interest.
The new interest rate?
“It’s tough to speculate what the interest rate will be because we’d be using a combination of long- and short-term notes,” Pennington said. “But the highest rate is going to be easily below 6 percent.”
At Tuesday’s meeting, the board will debate the wisdom of such a plan and give Pennington direction on how to proceed.
Another option would be to go to a referendum and ask the taxpayers for $17 million.
As a previous meeting, board member Tim Cullen pointed out that a “yes” vote on a referendum would actually save the taxpayers money—as opposed to every other referendum that asked taxpayers to spend more money.
Yet another option would be for the district to make additional payments whenever it can.
Also on Tuesday’s agenda, the board will:
-- Be asked to approve application for a grant for school counseling programs for a maximum of $400,000 per year for three years.
-- Hear a report on Craig and Parker high schools’ referendum construction projects and be asked to consider using money from one of the district’s funds to replenish the operating budget fund in an amount not to exceed $400,000. The money was taken from the operating budget fund to cover unexpected construction costs that came to nearly $400,000, explained Pennington, district chief financial officer. The total cost of the referendum was $70 million; the $400,000 represents less than one-half of one percent of the total cost.
-- Be asked to consider making a position statement regarding AB 458, a proposed state statute related to providing instruction in human growth and development.
The new statute outlines what “shall” be included in the teaching of sex education, explained Donna Behn, director of curriculum and instruction.
Currently, the rules apply only to what “may” be included.
Behn said the school district is already doing what the proposed bill would require. The current curriculum teaches every thing from the value of abstinence to the benefits and drawbacks of birth control.
Parents have the right to opt out of any part of the curriculum and have the right to review materials in advance, she said.
At a Feb. 9 meeting of the legislative committee, board member Bill Sodemann said he thought the bill was a state mandate that takes away local control.