A preliminary budget for the Kenosha Unified School District will not include $27.6 million the district owes its lender as a result of a failed investment it shared with four other districts.
The Audit, Budget and Finance Committee on Tuesday voted not to include the “moral obligation contribution” to Depfa Bank in the preliminary 2010-11 budget proposal that will be presented to the board July 20.
The committee also recommended excluding a proposal to convert four teacher consultant positions to coordinator positions at a cost of $68,000 until board could be apprised of details for funding.
Board member JoAnn Taube, committee chairwoman, said the moral obligation payment was excluded because the district is involved in a lawsuit against investment advisers Stifel Nicolas and the Royal Bank of Canada to recover its money.
Depfa loaned Unified, Kimberly, Waukesha, West Allis and Whitefish Bay school districts $165 million to invest in collateralized debt obligation bonds, which were designed to yield funds they needed to pay retirement benefits to employees, mainly for health and pensions.
The district’s finance director, William Johnston included the line item for the payment in a special resolution accompanying the budget proposal.
“It is not a legal obligation, but a moral obligation,” Johnston said. “I am obligated to put it in each year if it is not taken care of in the present year.”
While the resolution refers to Depfa’s default agreement, it also maintains that the agreement “does not create an enforceable legal obligation for the district to make any contribution” on behalf of the trust which was created to hold the investment.
Committee member Rebecca Stevens, also a board member, recommended that the line item be addressed at a later date because of the lawsuit it is involved in with the four other districts.
The inclusion of the payment would also result in a major deficit in the district’s budget for next year, according to Taube.
The budget also calls for eliminating 20.17 teaching positions due to decreased enrollment. But there will be no layoffs; Johnston said the decrease will be achieved through retirement and employees leaving the district.
Sixteen other positions, including educational assistants, attendance officers and librarians and central office positions, have been proposed for reduction as the district looks to save more than $3 million in staffing costs next year. The majority of these positions will also be reduced through attrition rather than layoffs.
Johnston and Sheronda Glass, human resources executive director, said that if enrollment increases by the fall, the priority for hiring would be additional teachers rather than educational assistants.
According to the preliminary budget, the tax levy is proposed to increase by more than $7.4 million, to $94.7 million for the next year.
Johnston said the proposed levy increase includes more than $3.9 million that the district is allowed to carry over from last year and nearly $2.3 million in new taxes for operations for Indian Trail High School, which will open with ninth grade in the fall.
The district’s tax on a $100,000 property is proposed to increase by $78.20, from $917.64 this year to $995.84 next year.
A public hearing on the budget is scheduled for Sept. 13. The board is expected to adopt the budget on or before Nov. 1.
That "line" better not be left off the budget. You should have to look at it every year and remember how stupid that "investment" was. It serves as a great reminder to the school board on how NOT to screw things up. Also, I really look forward to the tax increase! Especially because the value of my home has dropped by 22%. There's no way I can leave Kenosha now.
members(including the "financial expert") have been unwise enough to borrow money to invest in an instrument that they claim was misrepresented to them as a safe deal? Borrowing money to invest always carries some risk. Why did they not look more deeply into the actual investment? Perhaps they felt that $27.6 million was not big money. A bad idea to begin with compounded by a lack of research Remember that this is the district that brings you positions like "homeless liaison", "human resources executive director", "executive director of school leadership", "educational accountability research coordinator" and "executive director of educational accountability". Let's look closely at those job titles and ask if they are really needed at a cost of well over $100,000 per year. I think not, eh?
District Officials continue to act immorally. The worst example of financial incompetence in history and no one is terminated, no one resigns and no one apologizes. Instead they continue squandering like drunken sailors, cavalierly raising taxes and only offer smoke screens and hocus pocus accounting. The district appears to be "accrueing" considerable cash in their year end carry over account, over $25 million now! Poor stewards of the public's money. Lets hope the new superintendent has more integrity and transparancy. We pay while they play!
the people voted to change the KUSD to "Kenosha Common School District". It was my understanding at the time that this was a legally binding change that allowed the citizens to vote on that years budget as well as following years. This change was never physically implemented due to the expense of changing stationary, logos, etc. If I were to guess, I would bet that we are still a "common school district" and citizens have the right to vote on the budget. Could be wrong. Teachers always stack the budget meeting anyway. Someone should check on this.
The budget meeting is a useless waste of everyones time. The District is free to ignore the 'recommendations' of the public at the meeting and they have done so every year. It does not matter what the motion is or where the levy is set by the meeting. The District does as they please. The only purpose of the meeting is for right wing yahoos to tell off their elected board members and to grouse about the tax situation even though many of the biggest mouths live in Pleasant Prarie, home to some of the lowest property taxes in the state.
|
|
