Referendum FAQ

Spooner Area School District February 15, 2011 Referendum Frequently Asked Questions 1. W hat is the exact wording of the referendum question that Spooner A rea School District residents will decide on F ebruary 15th?

The electors of the Spooner Area School District will be asked the following question on February 15, 2011: !"#$%%&'#(&)*%%*+,-.&/(0*%1',*-&2(&$334*5(67 Be it resolved by the School Board of the Spooner Area School District, Washburn and Burnett Counties, Wisconsin, that the revenues included in the School District budget be authorized to exceed the revenue limit specified in Section 121.91, Wisconsin Statutes, beginning with the 2011-2012 school year and ending with the 2014-2015 school year by $2,350,000 per year, for non-recurring purposes89 2. W hat will the funds be used for?

The funds will be used to address annual budget deficits caused by structural flaws in the state school funding system, past declining enrollment, and rising annual operating costs.

Funding is aimed at maintaining current programs and services designed to meet the needs of our students. This referendum replaces the $1.6 million referendum that was passed by the voters in 2007 and expires at the end of the 2010-11 school year.

The 2007-08 through 2010-11 referendum alleviated the same pressures that we are seeking to alleviate this time. During the previous referendum we under-spent during the first two years and over-spent the last two years, just as planned. During that time we also made budget cuts as planned. Since that referendum has expired, we are asking the voters consideration regarding an additional $750,000 for operational expenses. That is where the total amount of $2.35 million comes from. As in the previous referendum, we would underspend during the first two years (which would help keep us from having to short-term borrow) and over-spend the last two years, still making strategic budget cuts along the way.

3. W hat are operational purposes?

By strict definition, operational funds are funds used for any of the regular functions of the schools. That includes things like salaries, busing, supplies, utilities, etc. The easiest explanation starts with things that are not considered operational funds. In 2007 we had two referenda:one for construction and one for operations. Those two referenda had to be in different questions because the funds were to be used for different purposes. The facility referendum money cannot be used for operational purposes, only for the specific purposes of construction and renovation stated in the referendum.

The district has a number of fixed operating costs such as the cost to have the facilities open, transportation costs, post employment benefit costs, software licensing, maintenance of

facilities, etc. These costs are generally fixed, but if some bus routes are cut we could see a decrease in transportation costs and we could opt to reduce funds used for maintenance of facilities, but that could lead to greater costs later on.

Basically, the operational funds that this referendum represents include keeping the number of teachers and other school staff employed so that we can continue to offer the programs that we have right now in the Spooner Area School District.

4. W hat is fund balance and why do we have one?

Fund balance is not cash on hand; it is not a constant balance in our checkbook. The district relies on tax payments and state aid payments for the vast majority of our operating revenues.

These funds are always paid to the district after they are needed, so in the absence of a fund balance, borrowing would be an ongoing event in the district. Our fund balance carries us most of the way between tax and state payments, but we still have to short-term borrow at certain times during the year to meet expenses. The fund balance limits the amount of cash flow borrowing that the district must do each year in order to have the necessary money $5$,%$2%(&'*&3$;&'#(&6,0'4,<'=0&2,%%08 An adequate fund balance is a nec(00$4;&3$4'&*)&$-;&6,0'4,<'=0&0*1-6&216.('&3%$--,-.8&&>#,0& fund allows for addressing unforeseen and unexpected expenditures during any budget year.

If districts spend down all of their fund balance for operating costs, three things happen: 1. Short term borrowing becomes a requirement and becomes more costly.

2. The district has no way to pay for emergency expenditures, especially related to building upkeep and maintenance.

3. The year after the fund balance is depleted, cuts would need to be made to cover the decrease in revenue that can no longer be paid through fund balance.

5. W hat has !""#$%&#"$'&$("%)*"$*&+'+$,-'.-#$'."$%-+'(-*'/+$&0"(1'-#2$!)%2"'3 Over the past ten years we have made budget reductions of approximately $2.5 million - $3 million dollars. We have sought to keep those cuts to areas that would have the least impact on programs and services for our students. While some programs have been altered and changes made, the majority of our programs are still in place. Here is list of the reductions that have been made: 12.25 Regular Teachers 6 Special Education Teachers 5.5 Title I Teachers 2 Media Specialists 1.5 Custodians 1.6 Secretaries 1 Custodial Supervisor .5 Administrator 1 Supply Clerk 5 Aides 1 At-Risk Coordinator .5 Psychologist 1 Guidance 1 AV Director

Rental Space:Early Childhood and District Office Supply Budgets Activities such as cheerleading and middle school drama Bus routes After school activity bus The district will continue to seek areas to make strategic budget adjustments, even if the referendum does pass.

6. W hy the need for the program referendum?

In 1993 the state imposed revenue limits on school districts. The revenue limits were an arbitrary cap that locked districts into a pattern of spending based on a single year of income information. For example, a district that raised its levy in 1992-93 to fix a roof or buy a computer lab has been able to keep that extra revenue in their revenue cap ever since.

Spooner had relatively low per pupil expenditures in 1992-93 and has a long history of being a low spending district. The enrollment increases of the 1990s afforded us with increasing revenues that allowed us to maintain programming during that time, but recent enrollment declines, coupled with a state funding formula that has not allowed for per pupil expenditures to keep up with inflation, have forced us to make cuts.

7. W hat options for cutting costs does the district have without the referendum?

The Spooner School Board has begun to identify the areas where cuts are most likely if a referendum is unsuccessful. A complete list has not yet been compiled, but all areas are up for discussion. Since many of our operational costs are relatively fixed (busing, occupation costs, etc.) personnel costs are the most likely area for reduction. Since personnel drive programs, programs will be affected. Some programs are mandated by the state, but that does not mean they will be unaffected by changes in class size and instructional supply availability. Programs not mandated by the state include areas such as the arts, business education, vocational education, theater, family and consumer education, and extra-curricular activities will be closely scrutinized. Technology updates and curriculum updates will likely be put on hold. Class sizes are not mandated by the state, so even curricular areas that must be taught will be evaluated.

Many Board decisions will be influenced by the 2009 community survey results (the survey is available for viewing online).

8. 4+#/'$5&+'$&6$'."$referendum money going to pay salaries for teachers?

In any service industry ? schools, hospitals, government services ? the major expenditure is in the payroll of the personnel providing the services. Personnel drive programs, so with fewer personnel there would be fewer programs.

9. How about if we cut out extracur ricular activities such as sports?

Through their involvement in extra-curricular activities and sports, Spooner students develop self-esteem, citizenship, responsibility, and skills in cooperation, communication, and

leadership. These positive outcomes cannot always be developed through classroom experiences alone. Few individuals would look back at the highlights of their middle and high school careers and not include some extra-curricular activities on their list of important experiences.

In addition to athletic opportunities, students in our schools have the opportunity to participate in forensics, music solo and ensembles, FFA, National Honor Society, student government, destination imagination, first lego league, and pep band.

The total general operating fund cost for athletics at Spooner High is approximately $250,000, and we receive about $40,000 in fees and ticket sales. If we were to eliminate high school athletics we could save about $210,000. The likelihood is, however that if we eliminated all sports, more than 33 students would open enroll to neighboring districts, taking with them about $6500 each in open enrollment money. This would effectively nullify the savings from eliminating the programs.

10. How much do we spend above the money received from the state for SA G E , or in other words, how much we will save if we cut SA G E? This is a little more complicated than at first glance because the reduction of sections affects the specialty areas as well. Using all 2010-11 figures making the following assumptions: ! Going from 6 Kindergarten teachers to 4 @ 26/classroom; 5 First Grade to 3 @ 27/classroom; 6 Second Grade to 4 @ 23.25/classroom; 5 Third Grade to 3 @ 28.67/classroom ! Eliminate the .80 Phys Ed teacher; eliminate an Art teacher; reduce a Music teacher to .50; all because of fewer sections or alternative ways to deliver the curriculum.

The District would reduce expenses by $760,000, and we receive about $360,000 from the state for SAGE aid, leaving a net savings of $400,000. This does not take into account any unemployment we may have to pay out.

11. W hy a referendum for only 4 years?

Four years is as far out as we feel we can accurately project and budget. The state budget and how public education is funded could change dramatically within four years.