School District of Cudahy Referendum: Frequently Asked Questions

Question: What is the primary purpose of all these projects?

Answer: The primary purpose of these projects is to improve and protect the learning environment by keeping our students in the facility safe, warm and dry.  The projects were chosen as proactive and preventative to avoid much larger, uncontrolled expenditures later.

Question: Are you doing work to every building in the district?

Answer: Yes, all buildings but the Administration Building have projects included.  Some initiatives such as security are district wide and others are specific to the school’s particular needs.

Question: Why do this work now?

Answer: Currently, interest rates are at historic lows for this type of borrowing.  The chart below shows the trend in rates over the last few years for comparison.  In addition, the District may be eligible for no-interest financing that is available right now.  Finally, the competitive market has reduced costs for construction to historic lows, however, some inflation is predicted in the industry in the coming years.

 

Interest Rates Remain Near Historic Lows

Question: What are the differences between this project and the energy projects already approved by the board?

Answer: These projects are completely separate from the referendum, but are coordinated with the referendum projects to avoid overlap. The energy projects are being implemented to save energy costs for the district and are being financed by the actual savings realized due to better efficiency. The cost of these energy projects does not increase taxes.

Question: Why do you need to go to referendum for these projects when the majority of them are maintenance related?

Answer: The capital projects list is a typical list of replacements and major repairs for institutional facilities such as the schools in the Cudahy School District.  The structure and most systems in the existing schools are good and the investment and remaining life are worth protecting.  Just like if there was an aging furnace or a leak in a typical home, if you plan to own the home, you would protect your investment and keep it warm and dry.  This list is much the same. However, larger scale equipment replacement and repairs are required and difficult to plan for in annual budgets so periodic larger investments outside the normal annual cycle are needed.

Question: Why is no work included at the stadium site?

Answer: Academic spaces had the most immediate needs after reviewing the entire list and the Board and staff prioritized the list.

Question: This district has a need for more work than what is in the plan, why is the plan not bigger to address all the district’s capital maintenance needs?

Answer: The School Board and the Administration wanted to be good stewards of the taxpayer’s money and still avoid much larger costs or huge spikes in the costs in the future.  The Board had input from the community and gave direction to the Administration and the consultant team to propose a project list that would not increase taxes. The list also took into consideration the most immediate needs so that another referendum of this size is not an immediate need.

 

Additional Referendum Questions:

What are the plans for repaying this loan. Will it result in an increase in the school district tax levey??

Question: What are the plans for repaying this loan?  Will it result in an increase in the school district's tax levy?

 

The Cudahy Board of Education has worked with financial consultants from Robert W. Baird to develop a fiscally sound repayment schedule of the proposed $5.9 Million bond issue.  The Board’s top priority is to not have any increase in the School District’s tax levy related to debt repayment.  In order to accomplish this, the Board is “dove-tailing” the new debt repayments into the existing debt structure.  In addition, the Board has agreed to fund approximately $150,000 per year of interest costs for the first 3 years out of the District’s General Fund Balance.  These actions will produce a Debt Service Tax Levy of approximately $1.1 Million/year through 2017, and then drop to less than a million for the remainder of the schedule.  This compares favorably to the current tax levy of $1.125 Million levied last year.  The Tax Levy Rate will be equal to or lower than the current Tax Levy Rate of $1.09 per $1,000 of equalized property value.  The Tax Rate is scheduled to drop slightly each year and will allow the debt to be paid in full by the year 2028.   The District would be debt free by the year 2028. 

One added note:  The District is pursuing the use of Federal bonds called “Qualified Zone Academy Bonds” that can produce a lower interest charge to the District, in fact, the last time we were able to take advantage of this program, we issued “no-interest” bonds, which further reduced our debt service costs and helped our District get a “bigger bang for our buck”.  If we are awarded these bonds, our conservative assumptions will be adjusted, and our overall debt service tax levy will go down even more!

 

Additonal Referendum Questions:

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