FREQUENTLY ASKED QUESTIONS

The District’s fund balance has been spent down to approximately 5% of the overall budget. The general rule of thumb is to maintain a fund balance near 20%-25% of the overall budget. At a 20%-25% fund balance, school districts are generally able to cover short-term deficits for such areas as payroll without having to go out and borrow money.  Districts are then able to set aside dollars for long-term facility needs through current fund balance reserves or anticipated savings in the future. 

At a 5% fund balance, there is little to no flexibility for covering deficits and if the District depletes it’s fund balance and operates in a deficit spending situation, the Wisconsin Department of Public Instruction will intervene in the district’s operations.

The District understands the need to manage the budget well into the future to provide for long-term viability of the Lake Country School District.  There are multiple aspects of this process that the Board is looking to undertake.  In essence, moving forward with these methods would provide for a budget reset or a leveling of current and future budgets.  

Some aspects of this budget reset include, but are not limited to:

1. Engaging in adjusting internal expenditures that will help bridge the gap in funds requested and an ongoing budget shortfall.

2. Asking for additional operation dollars through the implementation of an operations referendum.

3. Implementing infrastructure enhancements through a facility referendum which would not only modernize the facility but would also result in some additional energy efficiencies and cost savings in the near future (I.E. reduced electrical costs, reduced heating costs).

As the budget currently is situated, the District is intending to make reductions of 4.4 Professional staff and a .4 reduction in support staff. Additionally, the District will be reducing post-employment benefits and reducing the cash benefit in lieu of insurance.

As a part of the work that the District is undertaking, they have employed a partner, SitelogIQ, to help determine a long-range capital plan. This capital planning is taking place through the use of a tool called mysiteIQ and helps to accurately generate a reasonable timeline for projects with associated budgets for this continued work.

It would be the full intention of the Board to regularly update the community on how the budgets are being utilized and tracking expenditures related to referendum related questions. The District currently provides quarterly budget updates and can add similar capital updates. These updates would likely become more regular as construction projects were about to begin.

Should the Operational Referendum not pass, the District will need to enact further reductions within the budget.  Given that the largest potential for making reductions lies in staffing, we would need to look at further staffing and benefit reductions to balance our budget in successive years.

If the referendum is not successful, the District will need to increase it’s reductions from 4.4 professional staff to between 6.4 to 7 professional staff positions. A decrease of this magnitude will likely have a significant impact to class sizes, more personalized in classrooms, and potentially affect programming options for students and families.

The goal of the District is to maintain a tax levy increase that is level each year that the operational referendum funds are available. Maintaining a similar tax levy each year on the school district portion of taxes is accomplished by structuring repayments for the facility referendum and operational referendum in a staggered fashion.  In short, as the operational referendum payments increase gradually, the facility referendum payments decrease slightly, therefore creating a similar levy over the years of the operational referendum.

 The Fund Balance is an important factor for all schools in that it serves for a variety of purposes:

• Provides an ability to cover shortfalls in the district budget (usually involving payroll) based upon when the district receives certain taxing authority and state aid payments throughout the year.

  • • District budgets run on a fiscal year that starts on July 1 and ends on June 30 of the following school year.

    • Given our small aid payment, our first noteworthy revenue comes in the form of taxes in late January where we receive approximately 40% of our tax levy, leaving us to operate for more than half the budget year without any significant revenues.

• Allows the District to increase their potential borrowing capacity through a higher bond rating.

• Reduces the need to short-term borrow for yearly expenditures if there is an amount sufficient to cover those expenditures. The fund balance can then be restored once payments to the district are received.

• Serves as a fund from which any potential emergency expenditure (major Mechanical replacement due to malfunction) can be adjusted to ensure smooth school operations.

• Provides a method to cover potential small budgetary shortfalls should they arise.