Use of fund balance will cause decrease in tax levy
The Somerset Board of Education recognized the current difficult financial times and took a one-time step to lower the tax mill rate for the 2008-09 school year for Somerset School District residents.
By using $240,000 from the District's fund balance, the tax mill rate and tax levy will decrease this year.
The tax levy for the District for the 2007-08 school year stood at $7,859,637. This year's levy will be $7,772,015, a decrease of 1.11 percent.
The mill rate for the 2007-08 rate stood at 9.94642. This year's mill rate stands at 9.54533, a decrease of 4.01 percent. These figures are an average, based on the numbers from all the different municipalities within the School District.
This would mean an average decrease of 29.5 cents per thousand dollars of property value in the District. That means a $200,000 home would see a $59 decrease in the school portion of their property taxes this year.
District business manager Bob Avery presented four budget options to the School Board. The four versions ranged from offering a base budget, inclusion of the fund balance, a budget that includes paying for three District soccer fields and paying off a Wisconsin Retirement System liability balance, and the final option of taking all these steps. The School Board voted unanimously to accept the fourth option.
When presented with the option of offering immediate help to local taxpayers, School Board members acted quickly.
"This is an economic crunch for everybody," said Board member Catherine Cranston. "We're making an effort."
Because the fund balance funds generally are used during the school year, Avery made sure to mention that this would be a one-time break for taxpayers. Next year the District will return to its normal tax schedule.
The approved budget for the District for the 2008-09 school year stands at $16,085,933. That compares to the budget of $15,729,056 last year.
Every year the District sets aside money so that they won't need to short-term borrow to meet payrolls at different times during the school year. District administrator Randy Rosburg said the $240,000 became available because that money wasn't used during the past school year. Rosburg said the District tries to set aside this fund balance as a cushion for unexpected items that come up, like the recent HVAC problems that occurred at the Middle School.
Rosburg said the goal is to have 24 percent of the budget set aside each year for short term borrowing. He said the District hasn't been able to reach that level yet, so the District does need to short term borrow each year.
The short term borrowing is for a total of $500,000 this year. Rosburg and Avery expressed surprise when they received a bid from Anchor Bank at 3.7 percent interest on the District's requests for bids this year. This is considerably lower than they had planned.
The District short term borrows because funding from the state is doled out mainly in two lump sums during the year. In the months before they receive the next state payment, school districts use funds from short term borrowing to cover their expenses.
Each year the School District reinvests the funds it gets through short term borrowing. In most years the District has been able to break even by reinvesting the short term borrowing funds until they are needed.
One of the pieces that was a late addition to the 2008-09 budget was the construction of three soccer fields/athletic fields on the School District property. They will be located between the High School and the Elementary School. More details on their use can be found in athletic director Brad Nemec's Spartan Spartan article in this issue of The News.
The total costs of the soccer field is expected to be in the area of $78,000. The School District included the cost of excavation ($48,000) in this year's budget. Contributions from other municipalities, plus donations from individuals and groups is being counted upon to pay for other needs at the field, like fencing, sod, bleachers, etc.
Of the $48,000 coming from the School District, $39,000 was budgeted funds from last year that had carried over.