Unexpected revenue surplus gives district chance to transfer money for future maintenance
Taking the first step in addressing long-term maintenance concerns, the Grafton School Board on Monday agreed to place $360,000 in a newly established trust fund.
The money, which will be transferred from the general fund, comes from unexpected revenue the school district received.
Included is a $316,950 payment from Humana from a two-year risk participation agreement in which the district’s claims were below premiums paid for the 2015 calendar year. The district also received $40,859 from the Wisconsin Education Association as part of a class-action settlement.
Kristin Sobocinski, the district’s director of business services, recommended transferring all or part of the $357,809 in additional revenue to Fund 46, a long-term capital improvement fund the board established June 27.
“It would be a positive for the district to do it in a year where you have a surplus,” she told the board.
The board decided to establish a Fund 46 in response to voters rejecting a $49.5 million referendum to upgrade district facilities in the April election. Besides objecting to the potential tax impact of the spending proposals, opponents criticized district officials for failing to have a maintenance plan.
A new state law allows school districts to establish a Fund 46 for capital improvements and transfer any surpluses from the general fund to the account by July 31 of each year. However, the law has restrictions, including prohibiting districts from removing Fund 46 money for five years after the fund is created.
Grafton can’t begin using Fund 46 money until the 2020-21 school year.
As also required by law, the board adopted a 10-year plan that outlines proposed projects. Among the projects for the 2016-17 school year are an array of upgrades at Grafton High School, John Long Middle School and all three elementary schools.
Although the seven-member board unanimously approved transferring $360,000, the decision only came after considerable discussion.
Board member Clayton Riddle initially said he was apprehensive about transferring a large amount of money because of uncertainties with the 2016-17 budget.
“We’ve got buildings to fix. We have immediate needs,” Riddle said. “I’m leery about putting money in Fund 46 that we can’t touch for five years.”
Sobocinski said that a number of factors — including state aid, enrollment and property valuation — won’t be known until fall, but the district is likely to have a surplus in its 2016-17 budget.
“It’s too early to predict to the dime what we will have, but I think there will be a surplus,” she said.
“We may not have many opportunities to do this,” Sobocinski said of this year’s transfer option. “You want to do it in surplus years to level it out over time.”
Sobocinski noted that the board could include maintenance projects in the 2016-17 budget to address immediate needs.
Since the failure of the spring referendum, the board has continued to explore other options for upgrading facilities, including holding another referendum. An ad hoc facilities committee recommended that the next referendum not be held until April 2017.
Board President Terry Ziegler said the outcome of that referendum could impact future contributions to Fund 46.
“If the referendum passes in April, that will mitigate the concern” of not having money in the future for additional transfers, Ziegler said.
“There was a strong message in the last referendum to have money set aside for future maintenance,” Ziegler added.
Board Treasurer Paul Lorge suggested the board make a commitment each year to transfer money from the general fund to build Fund 46.