With the start of the new year, it is time for a mid-year review of school district finances in the School District of the Menomonie Area. Although the administrative team and school board continuously monitor the books throughout the year, the SDMA will once again host a mid-year budget meeting to review the factors that most significantly impact the finances of our schools. This year’s meeting is scheduled for 5:00 p.m. on Monday, January 8, in the boardroom of the SDMA Administrative Service Center.

Public school funding in Wisconsin can be a very complex subject, and there are several primary indicators to monitor which have a significant impact on the fiscal health of our school district. Student enrollment is probably the most important piece to school finance, as it is a key component in determining the school district’s revenue limit and the amount of state aid that the school district will receive. Partially due to an increase in summer school programming and changes in community demographics, this year’s calculated student enrollment of 3,425 is slightly higher than any of the previous five years in the SDMA. While slight fluctuations in enrollment can be expected, the district is projecting similar student enrollment figures during the next few years.

Property values in the school district influence the tax rate and the amount of funding that the school district receives from the state. In the SDMA, property values have risen slightly over the past few years, but not as rapidly as some communities in our region. Despite slow growth in property values, the school district tax rate has continued to decline to $9.65/thousand, which is about $1 less per every $1,000 of property valuation compared to four years ago. When comparing with other school districts in our region, the tax rate for the SDMA is less than several of our neighbors.

The overall budget in the SDMA for the 2017-2018 school year is close to $50 million, with nearly $40 million designated for annual operations. The school district now has a fund balance of approximately $11 million, which is just sufficient to avoid expenses related to short-term borrowing. With school districts only receiving state aid and tax levy payments periodically throughout the year, some are forced to spend thousands of dollars to maintain cash flow for making payroll and other necessary expenditures. Under the direction of the school board, the SDMA has been able to avoid paying short-term interest for the past four years.

Currently the school district carries about $46 million in long-term debt, mostly related to the construction of facilities and other capital expenditures. Just recently, school district officials were able to refinance nearly $10 million of this debt and save taxpayers approximately $1.75 million in future interest payments. In addition to paying down this debt and taking advantage of refinancing opportunities, the school district has also been planning for the future by developing a long-term capital maintenance plan to save for projected capital expenditures in a fund that now eclipses $1.5 million.

As with most schools, the majority of the SDMA annual budget (about 80%) is designated for staff salaries and benefits. District officials continue to work with the SDMA staff to ensure that these salaries and benefits stay competitive in what is becoming a more difficult market for recruiting and retaining highly qualified employees. Several adjustments were made to teacher compensation policies this year, and the district is currently working on a study for improving hourly compensation. All employee groups in the SDMA have also been provided with a new personal day incentive for excellent attendance at work, and a new longevity incentive which rewards employees who have been with the school district for 20 years or more. Changes made a few years ago to the district’s self-insured medical insurance program have mitigated increasing healthcare costs and allowed the district to offer a comprehensive plan for employees without any increase to premiums over the past year.

A recent update to the school district’s actuarial study of post employment benefits indicates that the school district has a liability of approximately $18 million for the local retirement benefits promised to school district employees in addition to the pension provided by the state. Through some previous changes to the local post-employment plan and better control of related health insurance expenses, this liability is now much less than the nearly $30 million that had been anticipated a few years ago. With savings for these benefits now eclipsing $3 million and post-employment benefits for newer employees set up as a defined contribution instead of a defined benefit, the school district’s net post-employment liability is now less than $15 million- or about half of what it was in 2013. With newer employees usually brought into the school district with less expensive compensation, it is expected that the district is now in the position to have the liability for post-employment benefits covered by the savings anticipated through future retirements.

To summarize, past and current school board members in the School District of the Menomonie Area have done a great job setting a vision for financial security in the school district. There is some concern that changes to school funding could be on the horizon as part of the next biennial budget in the State of Wisconsin, but no matter what happens in Madison, our school district will continue to make efforts to align the school district’s resources with the needs of our children and the expectations of the community.