District gets break on loan for referendum

School Board approves borrowing plan with interest rate lower than expected
By 
DAN BENSON
Ozaukee Press Staff

The Northern Ozaukee School Board last week voted to borrow the final $5.45 million for expenses related to a referendum passed a year ago at a lower-than-expected interest rate.

Kevin Mullen, of Robert W. Baird & Co., told board members the new borrowing carries an interest rate of 2.87% rather than the 4.25% estimated at the time the referendum was passed.

“We’re in a very, very good spot from an interest-rate standpoint,” Mullen said.

School district voters approved the $14.95  million referendum in April 2018.

The borrowing approved by the board last week is the second of two borrowing phases related to the referendum. The first was $9.5 million borrowed last August.

The referendum had projected a tax rate for debt to be $2.37 per $1,000 of valuation. With the lower interest rate, the tax rate for debt will not hit that mark, Mullen said.     

The highest tax rate for the life of the borrowing will be $2.35 per $1,000 of valuation starting in the 2020-2021 school year. The rate will drop to $2.12 in 2023-2024, $2.01 in 2029-2030, $1.99 in 2030-31 and $1.98 from 2031-2032 until the final payment is made in 2038-39.

The referendum also assumes zero growth in equalized value, “which is not likely to happen,” Mullen said.

Last year, equalized valuation in the district grew 4.1% to $631.2 million. Higher total valuation helps keep tax rates lower.

“This is very good news for our taxpayers,” district Supt. Dave Karrels said. “Through significant time planning on the front end of this process, we were able to secure outstanding interest rates and pay down the borrowing more efficiently.

“We are proud of being able to keep our promise to the taxpayers and maximize every dollar to help create a top-notch facility.”

Work has begun in earnest in the last couple of months with the construction of a 16,000-square-foot addition on the east side of the high school that will house a new cafeteria and kitchen that will serve all three schools. 

Over spring break, crews removed much of the asbestos contained in ceiling tiles around the school.

Plans call for most of the construction to be completed before the new school year next fall.

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Wisconsin’s largest paid circulation community weekly newspaper. Serving Port Washington, Saukville, Grafton, Fredonia, Belgium, as well as Ozaukee County government. Locally owned and printed in Port Washington, Wisconsin.

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