Shown is Waunakee catcher Katie Valk during a spring game at home. The Waunakee school board approved going to bid for lights at the field, the only high school field without them.
Shown is Waunakee catcher Katie Valk during a spring game at home. The Waunakee school board approved going to bid for lights at the field, the only high school field without them.
With the Waunakee school district’s Nov. 8 capital referendum approved, wheels are in motion to begin the borrowing along with some of the maintenance and improvement projects.
The Waunakee board of education Monday gave the OK for administrators to go to bid on four projects, including lights for the softball field, a bleacher extension for Warrior Stadium, high school track maintenance, and new furniture for the high school library.
The hope is to have the softball field lights completed this spring, with the others ready for the start of the 2023-24 school year.
“The recommendation is to move forward with the planning process, and ultimately, the bids themselves would have to be presented to the board for approval,” said Steve Summers, Waunakee school district director of operations.
These will be the first projects not related to the school buildings included in the referendum, and could be completed in 2023, Summers said.
The facility committee recommended the board move forward, said Joan Ensign, school board president.
The board also approved facility projects made possible by fundraisers, including a new scoreboard for the Warrior Pitch and a fundraising project for the baseball booster club.
Borrowing strategy
The board also approved a borrowing strategy for the referendum in the hope that it will save money on interest.
Normally, a school board would issue debt and lock interest rates, district’s financial consultant, Erik Kass, of PMA Financial Network, told the board.
Another option would be to issue a $120 million 5-year promissory note. By borrowing over a shorter period of time, the school board could lock in a better rate after a year.
“Interest rates are much higher than they have been for the last two to three years. There’s a lot of noise in the economy about what is going to happen when inflation does come under control,” Kass said. “And if you look at history, recession begins to set in at some point in time.”
Otherwise the board could issue municipal revenue bonds and be locked in for seven to nine years, Summers said. If the board issued the lower cost notes, the board could take them out as longer term bonds anywhere between year one and five.
“Organizations that do not want to have any interest rate risk might prefer to lock in as much of the funds as possible right away for a full 20 years,” Summers said. But based on modeling, that option is more expensive, he added.
School board member Mark Hetzel added that any money not spent right away from the $120 million in borrowed funds can be invested. Those interest earnings can be used for capital projects or put toward the debt service, Summers added.
Jack Heinemann, school board member and budget committee chair noted that the board is being very conscious of interest rates.
“There’s a perception out in the community that because we went out for a $175 million referendum, we’re going to take that today and put it in the bank and spend that over five years,” Heinmann said. “It’s not what our plan is. Our plan is to be as conservative and judicious with these funds so that we can minimize … expenses as we go.”
Initial borrowing
The board also approved initial borrowing not to exceed $9.9 million. A competitive sale had taken place earlier that morning, and Kass said he was “very happy with the results.”
The district had seen its credit rating from Moody’s drop in the spring of 2021 mainly over concerns about its fund balance, Summers said. Since then, the district has made an effort to increase the fund balance in preparation for borrowing following the referendum.
Another credit rating service, S&P which also leverages socio-economic factors provided a rating, Kass explained. PMA also provided its own scorecard for the district, and the district received a higher rating.
The competitive bond sale drew six respondents and resulted in interest savings.
“We were very happy getting under 4% with the rate,” Kass said.
