2009 Referendum Cost Far Lower Than Estimated.
Thursday, June 10, 2010
Remember the hotly debated school referendum that passed 9 months ago?
Back in November 2009, Whitefish Bay voted (in large numbers) to approve borrowing $22.9 million in bonds to finance school maintenance and improvements.
Further 2009 calculations estimated a 5.5% bond interest cost, and the loss of $5m in Wisconsin State Aid. Using this estimate, the Schools suggested passing the referendum questions would cost a $350k homeowner, about $248 per year.
Referendum opponents claimed the "true" cost of the referendum was a whopping $40 million.
Well, a funny thing happened on the way to the bank. While the District conservatively used a 5.5% interest cost in their calculations for the public .. it turns out the total rate is now estimated at an incredible 1.91%. --- And remember the possibility the School District could get some 0% interest loans? To be announced next week, the District should be receiving about a third of the total cost in 0% Qualified School Construction Bonds.
Oh, and total amount borrowed is less, too. Instead of $22.9m, the schools are projecting a cost of $20m due to lower construction costs. Net, net, instead of the $248/year 2009 estimate on your taxes, it should fall to about $175. Still a chunk of change, but about 30% less than originally estimated.
The 1.91% interest rate is really amazing, in light of April's credit rating downgrade.
So, good morning: The construction costs are lower than expected. The borrowing costs are far less than expected. That's outstanding.
*** Doug Armstrong at the YesYesProgress blog has done a tremendous job covering this story. Make sure you read his account, and check his wonderful blog for WFB school board updates.
And yet there is no money for the tennis courts.... Hummmm
Typical mis information in the overall story posted by Kevin and Doug. Ignores the fact that a home owners overall tax bill will be increasing...by a lot. How about putting this as a lead..
Good Morning, your property tax bill will be between 7-10% higher this year!
"tax bill .. 7-10% higher"?
On a $350k house, which equates to a $7,500 tax bill, the $248 referendum increase estimate would have been a 3.3% increase. With the new $175 figure, it's a 2.3% increase* due to the referendum. Ironic that you are combating "misinformation" about the referendum with ... misinformation about the referendum.
Before the referendum, opponents often suggested the District (and supporters) were underestimating the amounts. Now the results are (almost) in, and it turns out the District was being conservative, and even with high numbers, the voters approved.
It is certainly your prerogative to consider this bad news, but most are pleased their taxes will be lower than their democratic vote led them to expect.
*(Yes, you could calculate the %age based on school tax alone, which would change the numbers to 6.6% increase down to 4.7%. Still lower than your "information.")
Some corrections are in order.
I do not recall seing Kevin Buckley at the School Board meeting June 10, when the WFBSD financial consultants covered the borrowing financing update, so he deserves a little slack for making incorrect statements, but deserves criticism for making statements about what was said at a meeting he did not attend. Rather, he obtained his information from a Referendum supporter. any questions?
First correction: the referendum vote was hotely contested. However, the large numbers votiing in favor of it voted so for Part 1, about $13 Million. Part 2 was much closer. if 83 voters had voted No, Part 2 would not have passed.
Second correction: if the final interest is "only 1.9%", that still means the total to be paid by WFB taxpayers will be $8 Million more than the "sticker price" of $22.9 Million. $30 Million is A LOT more than $22.9 Million in most people's households.
Third correction: the borrowing will be less than $22.9 Million because, per the consultants, WFB cannot get the entire amount for a 20 year period. WFBSD can only get the $20 Million reported as all that has to be borrowed.
Fourth correction: the Concerned WFB Voters 2009, pointed out that the "true cost" of the referendum was $40 Million which included interest. The financial consultants stated in the Board meeting that the total cost of the loans, based on 5.5% assumed interest rate, would be $39 Million; $17 Million for interest over 20 years. The $1 Million difference in total taxpayer spending is within the margin of error. Sorry! The total taxpayers will have to pay is still pertinent and very important.
CWFBV 2009 continues to have concerns about the money the WFBSD is spending in this economy. Wait until the additonal taxes are combined with the additional taxes from the Village, for what it will be spending to fix the streets, sewers, etc.
CWFBV 2009 is pleased that the total costs will likely be lower (as of this writing, the numbers are all still best estimates), but could have been much lower, if the SD facilities and budgets were managed differently the last 5-10 years.
CWFBV 2009
Jamie Kowalski, Treasurer
Kevin, nice try but again WRONG.
Post 2 said OVERALL TAX BILL.
OVERALL TAXES...up 7-10%.
OVERALL = WHAT HOME OWNER PAYS.
STOP ANALYZING PARTS AND COMMENT ON OVERALL TAXES....UP UP UP