$1 million loan considered
Waupaca may borrow for athletic field
By Robert Cloud
The Waupaca School District may borrow up to $1 million toward the costs of building a new athletic field at the high school.
Because the loan would be through the State Trust Fund Loan program, a referendum would not be required.
Carl Hayek, the district’s business manager, explained the costs associated with the proposed athletic facility at a March 28 finance committee meeting.
He said Phase 1 of the project, estimated to cost $2.33 million, could be completed by the end of August 2017 if the board approved the project in May.
Initial cost estimates were based on the district raising $1 million from private sources in the community.
While the administration is confident that fundraising will offset much of the costs, Hayek said it can take years to collect the revenues from fundraising.
“At the beginning of this conversation, the district emphasized that it did not desire to go to a referendum and it did not want to increase taxes,” Hayek said.
He estimated that the loan would have a 15-cent impact on the district’s mill rate.
The property tax rate would increase from its current $10.98 per $1,000 valuation to $11.13 in the 2017-18 school year. The rate would then drop by 6 cents the following year.
The loan would have a 3 percent interest rate and the district would make five annual payments of nearly $216,640.
Carol Wirth, the district’s financial consultant, said the loan does not have the added expenses of bond attorney fees or rating fees.
State law also gives the school board the authority to borrow the money without a referendum because the principal and interest payments are within the revenue limit.
Hayek said the district will have paid off all its prior bonds by the end of 2018-19. Consequently, the mill rate can drop to $8.85 in 2019-20.
However, the projections of future mill rates depends on a number of variables, such as whether or not property values are rising or falling.
If property values increase, the mill rate drops. If property values decrease, the mill rate rises.
Another variable in the district’s projections is Gov. Scott Walker’s proposed education budget for the next biennium.
Walker’s proposed increase in per pupil state aid means that Waupaca schools would receive an additional $425,000 in 2017-18 and $433,500 in 2018-19.
The governor has also proposed increasing General Equalization Aid by $72.75 million. That amount would be distributed among Wisconsin’s 424 school districts.
If the state Legislature approves Walker’s spending proposals for education, then the loan from the State Trust Fund will have even less impact on property taxes.
According to Hayek’s figures, the district would cover the project with about $700,000 from capital projects funds and fund balance, $250,000 as a 2017-18 budget line item and $1 million from the loan. The district’s total cash for the project in 2017-18 would be $1.95 million.
The remaining $366,550 would be come from fundraising and the sale of assets, such as Haberkorn Field and the current district administrative building.
“Our original message really has not deviated. We’re still looking for $1 million from the community,” District Administrator Greg Nyen said. “This option allows the board the flexibility to act now and begin the project.”
The finance committee voted to move consideration of the loan to the school board.