Shorewood warned about debt payments
Without referendum, payments would need annual approval
Shorewood - The Shorewood School Board's recent decision to authorize the issuance of about $6 million in bond debt without a referendum, in order to fund energy efficiency improvements for the district, could still end up coming to voters for a final say.
In its meeting on Monday, the School Board heard comments from former board member Emily Koczela, who warned the board on the dangers of borrowing such a large sum without first seeking a referendum vote.
"In the structure you've chosen, you are legally required to reauthorize this debt payment every single year for the next 15 years in a separate vote," said Koczela, who serves as director of finance for the Brown Deer School District.
"And if a future board refuses to pass that vote, which they are entirely entitled to do, the debt will still have to be paid but it will appear in Fund 10 (the general fund)," Koczela added, "where it will compete directly with salaries, benefits and any other student needs."
The decision to incur nonreferendum debt also could negatively impact the district's bond rating, Koczela said. Alternately, funding the project through referendum debt would not change the net cost to the district or impact on the tax base, she added, while offering a more firm guarantee of debt repayment each year.
School Board members indicated they would be willing to discuss the matter further with Koczela.
The board on Sept. 11, following a public hearing, approved entering into the $6 million energy savings agreement with Honeywell. Business Services Director Mark Boehlke said there is a 30-day period following the approval in which voters could choose to petition for a referendum. If that does not occur, the district has the authority to borrow the funds without a referendum after that time.
The work to be completed by Honeywell will include a number of energy efficiency projects, such as lighting, plumbing and ventilation system upgrades.
Boehlke said that since the district first began the process of working with Honeywell to evaluate the energy efficiency of the district about a year and a half ago, the matter has been thoroughly discussed and evaluated by the board.
The district plans to repay the debt over a 15-year period. Boehlke said the energy savings achieved through the project will be used toward the repayment of the debt. The financing plan for repayment of the debt will keep the tax levy stable for the next six years, he added, at which time additional debt will fall off the district's books.
Boehlke said a new bipartisan law allows school districts to exceed revenue limits for energy savings projects.
"A number of school districts have done this, and it sounds like a lot of districts are looking into it now, too," Boehlke said.
Your link to the biggest stories in the suburbs delivered Thursday mornings.
Enter your e-mail address above and click "Sign Up Now!" to begin receiving your e-mail newsletter Get the Newsletter!
- North Shore Police Reports: September 25, 2014
- Video: Aaron Rodgers surprises Shorewood neighborhood
- North Shore Police Reports: September 18, 2014
- Shorewood finalizes Metro Market development
- Larger brush strokes for Plein Air Festival
- North Shore Police Reports: September 11, 2014
- North Shore Police Reports: September 4, 2014
- Concerns surround Shorewood development plans
- North Shore Police Reports: August 28, 2014
- With state funding tied to enrollment, North Shore public schools turn to marketing