Randall School District Referendum to Exceed the Revenue Limit to

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1 Randall School District Referendum to Exceed the Revenue Limit to Frequently Asked Questions 1. When is the Randall School District Referendum? The referendum will be held on Tuesday, October 13, What is the referendum question? The October 13 th referendum question asks for approval of a non-recurring referendum for three years. The amount is $460,000 for each of the three years. 3. What will be the financial impact of the referendum on local taxpayers? The projected impact of the referendum will be a NO Tax Rate increase for individual property owners in the Randall School District. Currently, a homeowner of a $150,000 home pays $992 in taxes to support Randall School District. The tax rate is projected to remain flat in and and see a small decrease in Total Tax Rate per $1000 Equalized Value Estimated Tax Bill on 150,000 home $992 $991 $991 $983 Estimated School Levy $4,319,627 $4,380,926 $4,445,699 $4,477, How can the district pass a referendum and the tax rate not increase? State of Wisconsin funding for education has decreased at a level never seen before in Wisconsin. This decrease in Wisconsin funding has reduced the district s ability to generate revenue. The referendum dollars replace the funding reduced by the State of Wisconsin thus not creating an additional tax burden to residents of Randall School District. 5. What is the difference between a recurring and non-recurring referendum to increase the revenue limit? School districts may run two types of operational referenda, recurring and nonrecurring. A recurring referendum means a school district will be able to levy that additional amount forever, without going back to the community periodically for permission to exceed the revenue limit. A non-recurring referendum means a school district can levy that additional amount for the period of time defined in the resolution. If a school district requests a threeyear non-recurring referendum, its revenue limit reverts to the State of Wisconsin s limit at the end of the three years. This option was chosen because it provides a sunset for the referendum and allows residents to make an informed choice in future years.

2 6. How does the Randall School District Tax Rate (Mill Rate) compare to the other local districts? Tax Rate (Mill Rate) is a function of total School Levy divided by property wealth (Equalized value of the District). Randall has the lowest tax rate of all K-8 districts in Wilmot High School consortium. Randall s tax rate is $6.61 per $1,000 of equalized property value. This equates to a tax bill of $992 for a $150,000 home. The average K-8 tax rate for the Wilmot feeder districts is $8.15 per $1,000 or $1,223 for a $150,000 home. It is important to note that the tax rate for Randall School District is not projected to increase over the three year period of this referendum. 7. Why do we need the referendum? Although many reductions have been made and several cost-avoidance steps taken, the revenue permitted based by the State-imposed revenue limit is not sufficient to provide the services that the children of Randall need or that our community expects. Under the current State formula, the revenue limit is insufficient to continue our current educational programs and services. Wisconsin s Revenue Cap funding formula has decreased revenue to Randall by $1,002,046 or 15.6% since The only way to increase the amount of revenue available is to have public permission, through the referendum election, to exceed the revenue limit. With public approval, the School Board may levy up to that amount, if necessary. If State funds increase or additional economies can be identified, the actual cost to the taxpayer could be decreased. Approval of the referendum simply allows the Randall School Board to increase the levy up to the specified amount ($460,000 per year). 8. What reductions have already been implemented by the District? Since 2010, the following reductions have been implemented: Staff started paying 50% of their retirement for an annual savings of $245,900 Employee contribution for health insurance for an annual savings of $138,700 Significant health insurance plan design changes Reduction of 5 teaching positions since 2010 Reduced an administrative position to part-time Elimination of salary schedule and salary increases tied to Consumer Price Index (CPI). The District will continue to look for additional reductions while maintaining our educational services, our facilities, and our personnel. 9. What is the revenue limit? The revenue limit is imposed by Wisconsin State Statutes to control the amount of funding that the community contributes through property taxes. The revenue limit is based on student membership (enrollment), the amount of funding the District receives from the State of Wisconsin in the form of school aid, and several recurring and non-recurring exemptions. The State budget has allotted for no increase to the Revenue Limit calculation for school districts in Wisconsin.

3 10. Why is the District requesting approval from the community to exceed the Revenue Limit? Revenue limits defined by the State of Wisconsin are the driving force behind the district s need to request additional revenue authority from the voters. A referendum is needed because of the State revenue limits and funding formula. The school district has been under revenue limits since Revenue limits were designed to lower property taxes and force districts to be more efficient. Governor Tommy Thompson made revenue limits permanent with the introduction of 2/3 funding. The State of Wisconsin never did fund every school district at 2/3 and eventually had to give up 2/3 funding of K-12 education due to a lack of money. The decline in school funding over the years has forced our district to make reductions from our expenditures to become more efficient. Although the District has made significant reductions to expenditures over the last ten years, the District is now forced to examine a referendum to exceed State of Wisconsin imposed revenue limits. 11. Why does Randall have this problem and other districts don t? Randall is not alone in this school funding problem. Since 1993, there have been well over 900 school referendums to exceed revenue caps in the State of Wisconsin. Some districts have increasing enrollment or they receive more school aid than other districts, which allows them to function under the current environment. Randall School District has seen a significant drop in school aide since The amount has been reduced by $1,566,235 which totals a 50% reduction in State aid to the district since How does open enrollment impact our budget? We have made huge gains in attracting students and parents to Randall over the last several years. We continue to be a destination district. Unfortunately, our district membership does not take into account our growth through open enrollment. Although we are plus 80 students in Open Enrollment this year, the actual number of Randall resident students has been declining in recent years. 13. Does Randall School District have any long term debt? NO Randall District is currently debt free. The Board of Education and administration have worked hard to avoid debt payments. The Jr High addition (1993) and HVAC upgrades (2001) are paid off leaving the district debt free. 14. How was the Referendum amount determined? The most important thing this referendum will do is allow Randall School to maintain and enhance our current educational programs and opportunities for all students at the excellent levels our community expects and deserves. This includes core subjects, music, arts, athletics, technology, and more.

4 The District has worked closely with Baird Financial to develop a comprehensive budget forecast model. The model factors in historical data, current budget legislation, and enrollment and budget projections. The amount of the three year referendum was set to accomplish the following goals: 1. Maintain and enhance current education programs and opportunities for Randall students 2. Build the District s Fund Balance to recommended levels 3. Allocate referendum dollars for maintenance and replacement of bus fleet 4. No increase to the current tax rate for Randall residents during the three year referendum period It is extremely important for the district to build back its Fund Balance. Over the last couple of years we have had to use Fund Balance for operating expenses. In order to build the Fund Balance back to recommended levels (15-18%), additional funds are needed to minimize short-term borrowing. Due to the cycle on which we receive revenue, we have to short-term borrow in order to meet expenditures throughout the year. In the current lending climate, interest rates are favorable; however, if that is to change in the next several years, our bond rating will be very important. The District s fund balance directly impacts our bond rating and the interest rates for short term borrowing. Due to our low Fund Balance, we had to borrow $1,300,000 in order to meet our obligations this year until we received all of our revenue from State aid and our local levy. The cost of short-term borrowing could become extremely costly in the future, and the cost associated with shortterm borrowing cannot be used to educate our students. 15. What is a Fund Balance? Fund Balance represents the difference between the assets and liabilities of a governmental fund. A common misconception is that Fund Balance is a cash account, and therefore corresponds to the District s bank balance. Fund Balance differs from cash balance in that Fund Balance includes additional amounts that are owed to (accounts receivable) or owed by (accounts payable) the school district. The amount of a district s Fund Balance will fluctuate throughout the year, but for comparison purposes, a snapshot is taken and reported at the close of the fiscal year on June 30. From DPI site A district with an appropriate Fund Balance can avoid excessive short-term borrowing, accumulate sufficient assets to make designated purchases, cover unforeseen expenditures, and demonstrate financial stability. 16. What will happen if the referendum does not pass? If the referendum question fails, the district will be forced to examine all educational programming, class size, and opportunities for students. 17. Why can t the school district apply for grants to help cover increased costs? The district actively seeks grants to help support our educational programming. We have received several grants over the last few years including a grant for Educator Effectiveness, student leadership, and several smaller grants for specific needs such as Red Ribbon Week. While these add up, most grants cannot be used to replace district money and have specific requirements, targeting specific programs.

5 18. Why don t we contract for our busing services? Randall currently has its own bus fleet. Historically this has been an opportunity to provide excellent service to our students and parents at a reduced cost as compared to contracting the service. There was a detailed analysis of our transportation costs conducted three years ago. The difference in cost and service to operate our own transportation was significant. We have continued to work extremely hard to keep transportation costs affordable by maintaining our fleet, but we have specific needs to update our bus fleet. Our overall goal is to make sure our students get to school in a safe, efficient manner. We will continue to analyze our needs on an ongoing basis and the board will make decisions with safety, efficiency, and expense as the primary factors. 19. What will happen in three years when this referendum ends? The District will continue to evaluate and make informed budgetary decisions during the next three years, but the biggest factor will be the State of Wisconsin education budget. If funding is restored to previous levels, another referendum may not be needed. Ultimately, the Board is committed to maintaining and enhancing education opportunities for our students while maintaining tax rates for the residents of the district. 20. How can I find out more information about the referendum? To provide residents with the facts needed to make an informed decision at the polls, the district offers the following ways to learn more about the proposed plan: Visit the district website at the district with your questions to jgendron@randall.k12.wi.us Call District Administrator John Gendron directly at , ext. 220 Attend a Referendum Information Night to learn more about the proposed plan. Each event will run from 6:30 7:45 PM and building tours will be provided for interested residents. o August 19 th, 6:30 PM at Randall School (Library) o September 28 th, 6:30 PM at Randall School (Library) Visit our school for a first-hand look at our facilities and programs. Building tours by appointment. Please call ahead