Shorewood bonding scrutinized
Former board member gathering signatures to initiate referendum
Shorewood - The Shorewood School District and School Board are still weighing options when it comes to funding capital projects in the coming years.
On Sep. 11, the School Board approved a resolution authorizing a performance contract with Honeywell International, which guarantees a certain amount of energy and operational savings per year. Those savings, to a certain extent, will be used to pay off the nearly $6 million in bonds that the district is planning to take out to fund capital projects around the district.
By state law the district is allowed to issue bonds in an amount exceeding $1 million for energy or operational savings projects and levy more than its revenue limit allows in future years to pay off the debt, but it will need to have the added amount approved each year first by the School Board and second by the state Department of Public Instruction.
The future obligations created by the performance contract, needing the School Board and later DPI to approve a revenue limit exemption each year - which either could choose not to - created some concern in former School Board member Emily Koczela. She told the board last week that, should a later board vote against or the DPI fail to approve the added revenue, the district would have to pay down the bond debt with general fund money it typically uses for programs and staffing.
"I am very worried about this decision," Koczela, the Brown Deer School District's finance director, said, "about borrowing this much under these conditions."
According to state law, district residents have 30 days after the resolution approving the performance contract to petition for a referendum on the borrowing. Koczela said she is soliciting signatures - in this case, names, confirmation of voter eligibility and a request that the board rethink its decision - at firstname.lastname@example.org, and is looking to gather the necessary 1,200 signatures by the deadline of Oct. 11.
"We've written up the website and we can send it out in 24 hours," said Koczela, noting that she would rather not be confrontational with the district. "I just don't want to go down that route."
Taking Koczela's concerns into consideration, district administrators and lawyers spoke with DPI representatives to find out the likelihood of the DPI turning down a future district request to exceed its revenue limit in order to pay for the energy project debt.
Energy savings guaranteed
District Director of Business Services Mark Boehlke said, per the district's conversation with the DPI, that the request would likely be approved each year so long as the district properly publishes its end of the year report summarizing how much savings have occurred as a result of the work.
He said the performance contract includes a guaranteed amount of savings, which means Honeywell would have to pay the difference to the district if the savings don't meet expectations - although he noted the estimates in the contract are likely conservative.
"Either way, we're guaranteed to reach those savings that are in (the contract)," said Boehlke, adding that some projects paid for by the borrowing don't generate enough savings to pay for themselves during the term of the bonds, but are still eligible for the contract because they constitute operational savings throughout the usable life span of district buildings.
The School Board discussed the merits of referendum or performance contract funding at its meeting Tuesday night, ultimately deciding to consult with financial adviser PMA at the finance committee level to run through its options, and report back to the full board in mid-October.
"We're going to look into it and we're going to talk about going forward," board treasurer Ruth Treisman said Wednesday morning. "We're going to plan some meetings to look at the different scenarios."
- Shorewood group encourages shoppers to bring their own bag
- Shorewood Criterium Classic set for June 23
- Shorewood trustees approve new police department
- Video: Bicyclist beats car in race from Shorewood to downtown
- Race car driver Hobbs will compete against Olympic cyclist Emery in Rider vs. Driver challenge
- Art students' mural about race relations removed from Shorewood High School (1)
- Shorewood's Cloud Red softly opens its doors (1)
- Sex assault reported in Shorewood
- Shorewood students get 'once in a lifetime' opportunity to meet celebrity alumni
- Shorewood students get buzz cuts for cancer