School budget includes raises, paves way for future borrowing

The Port Washington-Saukville School Board on Monday approved a 2023-24 budget that provides raises for almost all employees, essentially holds the line on taxes and paves the way for a day in the not too distant future when the district may ask voters for permission to borrow millions of dollars to address building and grounds needs.

For the second consecutive year, the district will levy $6.2 million to make what is essentially a double payment on the $50.4 million in debt it incurred after a 2015 referendum. A regular payment for this school year is $3.2 million.

The additional debt payment decreases long-term interest costs, but it also puts the district in a position to assume additional debt.

Because the district is paying more than it needs to on its current referendum debt, it could lower that payment and, provided voters approve additional borrowing, add a new debt payment without a discernible impact on the tax levy.

“It sets us up for future borrowing without a significant impact on the levy,” Interim Supt. Mel Nettesheim said in an interview.

Although there are no significant capital improvement projects in the 2023-34 budget, they are looming. The district is awaiting recommendations based on recent studies of both indoor and outdoor facilities, and some projects, like the replacement of roofs at Thomas Jefferson Middle School, where water rained down into classrooms last school year, are obvious.

So too are improvements to Port Washington High School’s outdoor athletic facility, where a section of the home-side bleachers has been closed for two years because the footings that support it are no longer anchored in the hill behind it.

Nettesheim told the board Monday that replacement of the bleachers will cost an estimated $1.2 million and that there could be bigger problems with the outdoor athletic facilities nestled at the base of the hill on which the school sits.

  “We’re going to have to make some decisions because the hill is eroding,” she said.

While the budget sets the stage for future borrowing, it more immediately reflects a concerted effort to attract and retain employees in a highly competitive education job market by giving them raises that average 4%. That is in line with the average wage increase of 4.5% in school districts throughout the state, administrators said.

The spending plan benefits from an increase in state aid and taxing authority, flat health insurance costs due to a switch to a self-insured plan and an infusion of Elementary and Secondary School Emergency Relief money. The district will have received a total of $2.5 million from the pandemic relief fund by 2025.

The budget also reflects financial challenges, among them a Private School Choice Program payment that has hit $1.1 million.

Under the program, families that meet its income criteria can send their children to private schools tuition free. The public school districts where those children live must then make a per-student payment to the private schools that educate those children.

At the same time, student enrollment in the district continues to drop, by 44 students from last year and 111 from 2021, although the three-year average, which is used to calculate the district levy limit, has remained fairly stable at 2,215.

The good news is the district has experienced an increase in 4-year-old kindergarten students this year and the outlook for residential development, especially the type that attracts families to the district, is positive, Nettesheim said.

“When we met jointly with Saukville and Port Washington, we were pleasantly surprised to hear about all the apartments, condos and homes that are planned, especially in Saukville,” she said.

In terms of open enrollment — the program that allows parents to apply to send their children to schools outside of the district where they live — the Port -Saukville School District continues to lose more students than it gains. This school year there are 162 students open-enrolling into the district and 189 open-enrolling out, a difference of 27 students.

When a district loses students to open enrollment, it can still count them for the purposes of their levy limit calculations but they must transfer $8,618 per pupil to the school district that is educating the students.

Nettesheim said she does not know why more students are leaving the district than enrolling in it under the program but noted that the area has a number of high-quality school districts, including Port-Saukville, that give parents plenty of choices.

The bottom line in the 2023-24 budget is that the tax levy will increase by $48,802 — just a 0.27% hike — to $18.1 million.

The tax rate, however, will drop by a significant 80 cents to $7.21 per $1,000 of equalized valuation. That is because of a jump of 11.4% in the equalized value of property in the district.

If the tax rate dropped to $7.21 and there was no change in equalized value, taxpayers could expect a significant savings on their tax bills. But when the increase in valuation is factored in, the average owner of a $200,000 home can expect to see a $4 increase on school property tax bills.