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2009 Referendum Cost Far Lower Than Estimated.

Posted by on June 11, 2010 | 6 comments

Schools, Referendum

Remember the hotly debated school referendum that passed 9 months ago?

Back in November 2009, Whitefish Bay voted (in large numbers) to approve borrowing $22.9 million in bonds to finance school maintenance and improvements.

Further 2009 calculations estimated a 5.5% bond interest cost, and the loss of $5m in Wisconsin State Aid.   Using this estimate, the Schools suggested passing the referendum questions would cost a $350k homeowner, about $248 per year.

Referendum opponents claimed the "true" cost of the referendum was a whopping $40 million. 

Well, a funny thing happened on the way to the bank.  While the District conservatively used a 5.5% interest cost in their calculations for the public .. it turns out the total rate is now estimated at an incredible 1.91%.  --- And remember the possibility the School District could get some 0% interest loans?   To be announced next week, the District should be receiving about a third of the total cost in 0% Qualified School Construction Bonds.

Oh, and total amount borrowed is less, too.  Instead of $22.9m, the schools are projecting a cost of $20m due to lower construction costs.    Net, net, instead of the $248/year 2009 estimate on your taxes, it should fall to about $175.  Still a chunk of change, but about 30% less than originally estimated.

The 1.91% interest rate is really amazing, in light of April's credit rating downgrade.

So, good morning:  The construction costs are lower than expected.  The borrowing costs are far less than expected.   That's outstanding. 

 Doug Armstrong at the YesYesProgress blog has done a tremendous job covering this story.  Make sure you read his account, and check his wonderful blog for WFB school board updates.