School District budget keeps referendum tax promise

The Northern Ozaukee School Board on Monday did more than keep its word to not raise the tax levy after voters approved an operational referendum last year.

The board approved the 2025-26 school tax levy that’s 3.5% lower than last year’s total. The levy is down from $7.562 million to $7.298 million.

Board Vice President Dan Large said the board was told during last year’s referendum discussions that holding the line on the levy would be impossible.

“I’m so proud of where we are,” Large said. “We took so much criticism last year.”

General fund expenditures are up by $40,000, from $5.446 million to $5.486 million, Director of Business Services Josh McDaniel said during the annual budget hearing.

The school tax rate is decreasing to $6.79 per $100,000 of equalized property value, meaning the owner of a $300,000 home will pay $2,037 in school taxes. That’s a decrease of $1.07 from last year’s rate of $7.96 and $351 less for a $300,000 home. The district’s tax rate has fallen every year since at least 2021.

McDaniel said that because the district prepaid debt from its 2018 referendum at strategic times to maximize state aid, the district has received nearly $1 million more in aid. In addition, it cut three years of loan payments, which saves the district $2.9 million in interest, nearly half of the interest costs, he said.

McDaniel also transferred money to the capital projects fund to maximize aid, resulting in $315,000 in more aid.

“That’s some really sound fiscal management. This is something we should be really proud of in our district,” Large said.

The district will make its final payment on its $1.2 million nonreferendum debt related to Wisconsin retirement service liability dating to 2008.

The district included five projects in the budget for a total of $3.6 million it plans to fund with fund balance, but each still requires board approval and more exact costs before they can be done. The list includes:

• Fire alarm replacement in the high and elementary schools, $700,000 — McDaniel said the alarms date to the buildings’ origin in the 1960s;

• Bathroom upgrades, $200,000 — Some also date to the 1960s;

• Maintenance building, concession stand and bathroom upgrades for $1 million — one of the maintenance buildings still has a dirt floor, McDaniel said.

• Track and field upgrades, $1.5 million — the track needs more work than initially estimated;

• Replacing gym bleachers, $200,000.

Fund balance, a district’s savings account for unexpected expenses, will be used to pay for most of the work.

Large said the $2.9 million in interest savings and the $315,000 in additional state aid will offset $3.25 million of the $3.6 million in project costs.

“That’s something we should be shouting at street corners,” he said. “That’s outstanding, and it’s sound fiscal management with a board that recognizes that and supports it. We have great years ahead of us.”

When the operational referendum funding ends in 2028, Large said the district will need to pass another one, but it will be in a different financial position.

“In 2028, we will be a debt-free school district,” he said.

The district’s three-year rolling average enrollment is up from 722 to 725. The state increased per-pupil aid by $325,  about 3%, but McDaniel said multiple district costs are rising by more than that.

The district maintains a fund balance of 20% of its annual expenditures, which McDaniel said allows it to avoid short-term borrowing in fall before tax revenue arrives.

The board approved a total budget of $20.4 million.