Binding referendum will determine fate of Chetek-Weyerhaeuser school consolidation

Luke Klink

Voters in the Weyerhaeuser Area and Chetek school districts will head to the polls Tuesday, Nov. 3, to decide a referendum on consolidating the two neighboring school systems into one.

Backers of consolidation have touted $11 million in state incentive aid that will be available over five years to fund operations of a consolidated school district. They say the additional money — albeit short-lived — will help support more diverse educational programming than either school district could provide separately.

Opponents of consolidation have complained at public meetings about long bus rides and long travel distances from the Weyerhaeuser area to Chetek. They also have questioned why consolidation was not pursued with other neighboring school districts like Cameron and Bruce. They are also worried about projected debt for a consolidated school district after incentive aid runs out after year five.

There will be two separate decisions made in the Tuesday referendum — one in Chetek and one in Weyerhaeuser. If either vote does not gain a 50 percent majority, consolidation will not occur. If both pass, the results are binding and consolidation will take effect on July 1, 2010.

“If there was a way to make this work, I would be trying as hard as I could to make it work,” Weyerhaeuser Area School District Administrator Dennis Richards said. “We will still be better off in the sixth year together than both districts would be alone.”

“I wouldn’t have pursued consolidation if there wasn’t an educational benefit and there wasn’t a better financial situation,” Chetek School District Administrator Al Brown said.

School officials from both sides have pledged to keep bus routes in a consolidated school district to less than a one-hour ride by hiring a consultant to help design the most efficient routes. They have also pledged to plan for tax implications when incentive aid runs out.

Consolidation Incentive Aid is strictly meant for districts who have consolidated and is based upon a complex formula written in Wisconsin State Statutes 121.07(6)(e) and 121.07(7)(e). This aid amount is essentially the total combined amount of state aid both school districts would have received separately, plus an additional 10 percent of that amount. This aid would be received for five years beginning in the first year of consolidation and would be counted as revenue outside of the revenue limit. New state legislation passed this year hikes the amount for Weyerhaeuser and Chetek schools from $9 million to $11 million.

Lisa M. Voisin, a director with the Milwaukee financial consulting firm Robert W. Baird & Co., said the consolidation incentive aid will result in $475,000 less state equalization aid for a consolidated school district, resulting in a higher mill rate than originally projected for the first year of consolidation, but that impact could be offset by underlevying in the 2010-11 and 2011-12 school year budgets.

“Nonetheless, as we have concluded in the past, the Consolidated District continues to be more fiscally viable than each of the independent districts,” Voisin said.

To lower the projected consolidated school tax rate, school officials have proposed paying off Weyerhaeuser school debt, saving $1.3 million on combined operational costs, using state consolidation incentive money to pay down the total levy (underlevying a total of $1 million over two years), and successfully lobbying the state for more consolidation incentive aid than previously allowed by state law.

Projected tax rates from Baird for a consolidated school district compared with continuing with separate operations show a sharp equalized tax rate reduction of about $2 per $1,000 of equalized valuation for Weyerhaeuser school taxpayers — at least while property owners there continue to pay off the extra taxes associated with a recent referendum to exceed state revenue limits. Tax rate information was not presented beyond the 2010-11 school year. Projections show Chetek school taxes would trend about 37 cents per $1,000 of equalized valuation more per year during the next six years in a consolidated school district.

Weyerhaeuser schools now receive about $600,000 less in state aid than seven years ago due to a combination of low enrollment numbers and increasing property values. A state school funding formula penalizes school districts with high property values by reducing their state aid, forcing local school boards to seek additional taxes from property owners.

Earlier this year, the Weyerhaeuser Area School Board issued a combined statement stating consolidation is the “one choice that makes good sound educational and financial sense to the Weyerhaeuser District.” School board president Ken Czekalski said at a recent meeting there is no other option.

Weyerhaeuser school officials could choose to dissolve the school district if the referendum fails. In that case, the state school district boundary appeal board made up of school board members from around the state will hold a hearing and listen to local testimony before deciding how to divide school district land and its assets between its neighbors. That process takes two years.

Brown projected structural budget shortfalls totaling $1 million for Chetek schools without consolidation as revenue limits continue to not keep up with annual cost increases. That will mean cutting budgets starting with the 2010-11 school year, he said.

“There is no such thing as a perfect solution,” Brown said. “There are always positives and negatives, but this leaves both districts in a far better financial position, and we will both benefit from each others’ resources.”