Scott Williams swilliams@wolfrivermedia.com
Leader Photo by Scott Williams Voters in November approved a $9.25 million referendum by nearly a 2-to-1 margin to make improvements to Shawano Community Middle School.
Taxpayers would pay more sooner — but save $1 million in the long run — under a plan to accelerate borrowing for the Shawano School District’s voter-approved middle school renovation project.
School administrators are considering issuing a 15-year bond rather than a 20-year bond, retiring the debt sooner and saving on interest payments for the $9.25 million project authorized by voters in November.
The strategy would mean bigger tax increases than originally anticipated for the Shawano Community Middle School project, with the owner of a $100,000 home paying as much as $82 a year rather than $57 a year, based on preliminary estimates.
The faster payoff would end the tax increases sooner and reduce the district’s overall cost on interest payments. Projections show that the cost of retiring the bond issue over 15 years would total $11.1 million, compared with $12.1 million if the 20-year strategy were implemented.
School board members said they support the accelerated approach and the opportunity to save taxpayers $1 million.
“Why wouldn’t we do that?” board member Beth McFarlane said. “This seems the most logical and the most effective use of our money.”
Voters approved a referendum Nov. 3 authorizing the district to borrow $9.25 million for renovations to SCMS, including improvements to the school’s heating system, cafeteria, locker rooms, kitchen, band and orchestra rooms, and more.
The measure passed by nearly a 2-to-1 margin after school administrators described a 20-year-old borrowing plan that would cost taxpayers about $35 a year for a home valued at $100,000.
As the district prepares to enter the bond market to borrow the money, officials have presented the accelerated 15-year strategy as an alternative.
Louise Fischer, business manager for the school district, said during Monday’s school board meeting that she favors the new approach for the opportunity to save $1 million and to eliminate all debt from the middle school project by 2032 rather than 2037.
“That’s tremendous,” Fischer told board members. “That’s a win-win for everybody.”
Since the referendum’s approval, district officials have studied borrowing options in partnership with the district’s financial advisers at PMA Securities Inc.
According to estimates presented to the school board, the district’s costs for the middle school renovations under a 20-year bond would range from about $416,000 a year to $782,000 a year. The owner of a $100,000 home would see yearly tax increases ranging from $31 to $57, for an average of $43.
Under the accelerated 15-year strategy, the district’s annual costs would fluctuate more widely between about $382,000 and $1.1 million. Tax increases for the owner of a $100,000 home would fluctuate between $29 and $82, averaging $53.
Officials said the impact on taxpayers would be lessened somewhat by ongoing reductions in school district debts from previous borrowing. As part of an annual budget totaling $37 million, the district currently pays about $3 million a year in debt service, with some existing debts due to be retired in 2024.
School board members expect to decide on the middle school borrowing strategy in February, after bids are received from bond buyers.
Board member Al Heins said he favors the option to save taxpayers $1 million long term.
“Common sense says to do it,” Heins said.
Board president Tyler Schmidt agreed, saying that he was surprised to see the savings that could realized from shortening the debt plan by five years.
“We would be foolish not to capitalize on that,” Schmidt said. “We’re trying to save as much as we can.”