Cost of a no vote is an $800,000 NOSD deficit

A bump of about 20 students to this year’s enrollment will not save the Northern Ozaukee School District. If November’s operational referendum is rejected, the district will face an estimated $800,000 deficit this year, Business Manager Josh McDaniels said on Tuesday.

McDaniels said he is putting together two budgets — one for if the four-year, $1.1 million annual referendum is rejected and one if it’s approved — to present to the School Board for approval in October.

The budget for a rejected-referendum scenario would eat a little less than half of the district’s unassigned fund balance. That balance, which is a reserve of funds used for temporarily covering unexpected expenses during the year, is currently at about $2 million.

Without referendum help, the district’s fund balance would be below state-recommended levels, possibly requiring the district to start taking out short-term loans to balance its year-to-year books.

Additionally, the budget deficit won’t go away, McDaniels said. Once the fund balance is eaten through, the district will need to cut into staff and services or start borrowing to fund operational costs.

“That’s not sustainable on an operational level,” McDaniels said.

The overall fund balance, including the unassigned balance and funds dedicated for construction projects and maintenance, is a little more than $3 million.

November will be the third time the question has been on the ballot.

This go-around, the School Board hopes to appease voters by trimming $2.4 million from the referendum by removing funding for the renovation of the track and maintenance building.

If it’s rejected again, the district will likely put the question on April’s ballot.

“We’d have to come back, it’s such a significant part of our budget,” McDaniels said.

A glimmer of hope  for the district is an expected enrollment increase of about 20 students this school year, McDaniels said. Enrollment determines school funding in Wisconsin, however, it’s averaged over a three-year period to calculate the levy limit.

Therefore, the enrollment increase will not provide significant, immediate relief, McDaniels said.

The increase will actually have almost zero effect on this year’s budget because McDaniels said he anticipated an enrollment decrease, which grants additional aid from the state.

The new students will also exacerbate overcrowding in the second, fourth and seventh grades — potentially posing a threat to student retention, McDaniels said.

“Overcrowding is starting to hit hard, and it’s only going to hit harder if we can’t get this minimum referendum amount,” Supt. Dave Karrels said in August.

The referendum would fund the hiring of three additional teachers to address the issue, McDaniels said.

The School Board has committed to maintaining school taxes at current rates if the referendum is approved by reducing early debt payments.