New Berlin - With more than $22.6 million worth of facilities projects needing to be done over the next several years, the New Berlin School District is exploring a number of financing options, including selling off an estimated $3.5 million of unused property.
A combination of two or more would be the likely choice, said Roger Dickson, chief financial and operating officer.
Of the district's $3.5 million of unused property, nearly $1 million is in vacant land in parcels of 50.4 acres, 20 acres and 9.3 acres. The rest of the property is in the form of closed elementary schools - Glen Park, Prospect Hill and Little Grove schools.
There is also the Hickory Grove Center, an old school that was sold to the city for use as a recreational facility. The district would only regain ownership of the property if the city decides it no longer has a use for the building. In that event, the district could again sell the property.
Paying for part of the projects out of the district's operating budget is a possibility, Dickson said, but there isn't enough leeway in the budget to cover much. That's because borrowing for previous projects leave little room under state revenue limits in the operating budget to borrow more, he explained. As a result, the district has ruled out using the operating budget to finance additional projects.
The district could, however, go to a referendum to ask residents if it could raise the revenue limits to get the work done, Dickson said. Borrowing $10 million would likely add $20 per year in taxes for the average home, he added.
Refinancing the district's debt would help only a little, Dickson said.
"The underwriters would make more out of the deal than taxpayers," he said.
Using fund balance - unallocated reserves within the budget - is another option that could help pay for some of the projects, Dickson said. But the schools prefer to maintain a healthy fund balance because of the risk involved in self-insuring for health insurance, he said.
- Jane Ford-Stewart
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