MONROE — The Monroe Board of Education continues to face backlash from community members that feel duped by the rhetoric in regards to the November referendum election. Voters — by an 8% margin — chose to pass an $88 million referendum, with much of the funds going to building a new high school.

At the Jan. 9 school board meeting, there was a lengthy discussion, from flustered citizens voicing their displeasure at the board, to the board and administrators trying to both show sincere apologies as well as curtail the confusion.

While there have been a variety of grievances, like the proposed location to build, in December homeowners got a wake-up call to their annual property tax bill, with reassessments and the Fair Market Value rising dramatically, from anywhere between 11-19%. 

Leading up to the election, the district promoted a levy rate adding on an addition $0.13 per $1,000 of property tax — or about $13 per $100,000 of value. Flyers and promotions from the district did clarify that the estimated tax impact would be, projections based on mill rates from the 2022 Equalized Valuation (TID-OUT), with a growth of 2%. However, with growth much larger, and the calculations regarding the average assessment ratio and equalizations, families that thought they would see their school taxes go up $13-16 dollars saw it increase by more than $230.

“The cost of the debt communicated was accurate. The change in the mill rate was accurate,” said Rich Deprez, Monroe Board of Education President. “We’ve said that we’ve missed correlating the impact of the historic valuation increases, with the levy in the fields like increase of the levy and mill rate being an accurate predictor for individual tax increases, and we can’t apologize enough for that. That’s on us as a board, as an administration. It wasn’t intentional. As uncomfortable as that is, that’s sort of the reality that we are in right now.”

Rodney Figueroa, Monroe Superintendent, told the large crowd that attended the Jan. 9 Monroe Board of Education meeting in the high school PAC that it is the ultimate goal of himself, the administration and the board to regain the public’s trust in its entirety.

“What are we going to do regain public trust — and confidence? That’s a very integral thing,” he said “We’re going to work on the transparency; accurate communications … and we are going to work on gaining that confidence back.”

Equalization and Fair Market Value

School District of Monroe Business Administrator Ron Olson broke down the four major sources of revenues for schools in the state:

●  State aid

●  Property Tax

●  Federal aid

●  other local non-property funds, like gifts, fees, tuition, etc.

“Most of the school districts out there, when they talk about their annual budget, they talk about what their annual levy rate increase is going to be,” Olson said. “Unfortunately, when you see such a large increase in property valuation, that really kind of skewed the picture. And that’s where I think the communication on our website talked a little about that, and that there’s an apology in there for not fully appreciating that.”

Olson said that taxpayers and officials can get caught in a breeze and overlook when a large increase may be coming, especially when dealing with a constant 2-4% increase for more than a decade.

“There’s a lot of factors that come in, and we don’t know what the valuations per individual property are. We never know if it’s because of new growth or if it’s because of a re-valuation of commercial properties or what the reason is,” Olson said. “This year, because of the large increase, the real change in valuation was basically the state saying housing costs have changed dramatically, there’s a lot of inflationary costs out there, and so we are going to set our equalized valuation assessments pretty hard. They didn’t tell us that up front, but in hindsight that’s what it looks like has happened to homeowners.”

He said under current law, there is a revenue limit that each school can raise through the combination of general school aid: equalization, integration, special adjustment aids, and property taxes. For Monroe, Olson said it was the equalization aid that hit the hardest.

“State aid reimbursement does vary from district to district,” Olson said. “When we talk about equalized property valuation per pupil, that’s looking at total property of the district, divided by the number of students we have. In the case of the School District of Monroe, our state aid is higher than average because we have lower-than-average property valuation per pupil. What that means, in essence, is the state picks up a larger portion of the aid per student, and it lowers our local property tax portion when compared to the state average for all school districts. In a nutshell, that’s kind of how school financing works.”

The equalization valuation is set by the Department of Revenue, and all school districts in Wisconsin are required to use it to determine levy rates, Olson said. He added that the current increase is more than 10% higher than any other increase in the last 30 years. “This has been a very unusual year for what the valuation increase is, and not only the School District of Monroe, but for school districts across the state.” 

For instance, in Brodhead, some residents had their school taxes go up nearly 30%, despite not passing an $88 million referendum. “In this year there is a range of increases across the 11 municipalities that make up the School District of Monroe, and it makes up 11% to 19%,” Deprez said. “Those are just the averages, and within those averages are outliers from one neighbor to the next, and those discreet details are not something given to the district when planning these referenda.”

“The reason they deal with equalization is to determine that each municipality pays its fair apportion of school taxes equally because those municipalities. As someone pointed out tonight, when municipalities present their tax bills out to individuals, it’s based on assessed value,” Olson said.

Any entity that is assessing over multiple municipalities uses the equalization method.

“Within each municipality, they’re dividing their assessed valuation by the equalized valuation of the Department of Revenue has said is the value of that district for the state level to get that assessment ratio. Although the Department of Revenue does not assign an equalized valuation for each individual property, and the words ‘equalized valuation’ do not appear on your tax bill, when you divide your property’s assessed value that you see on your tax bill, by that assessment ratio, you get what is identified as the fair market value for that individual property, which then is consistent with the equalized valuation that they talk about for school levels,” Olson said. “And that’s why people are correct that their individual tax bills and municipalities are based upon their assessed value, but from a school perspective, we live in an equalized valuation world, and how you get that equalized valuation on your tax bill is by taking that assessment ratio, dividing your assessed value by that assessment ratio basically to come up to what on your tax bill says the fair market value, which is analogous with the equalized valuation.”

Feeling duped

Six members of the community spoke out on their frustration during the public comment period, three of which said they had voted for the referendum. Each received an applause from audience members.

“I feel that I was lied to, and that we’ve all been lied to,” said city alderman Chris Schindler, a lifelong Monroe resident. “My personal financial obligation is about $10,000 a year different, and that’s because of what was stated the referendum would cost me, and what it actually cost me.”

Nick Baker said he felt guilt for supporting the referendum — not for building an actual new school, but for relaying information he found to be less than credible.

“I spoke up to people — the elderly and to people who thought I knew more than maybe I did — about how much it was going to cost them,” Baker said. “From an omission, act of neglect — or something — I gave people wrong information, and that has reflected poorly upon me. And now we all need an explanation, and I come here to this meeting to hopefully hear a proper explanation from you.”

“My issue is the way it was handled in the referendum,” said Dale Howarth, a Monroe resident who created a Facebook page called “Citizens for Monroe School District Referendum Transparency.” The group met two days later on Jan. 11 on the west side of town to air their grievances and discuss potential future actions to take against the district.

“If you do not believe the numbers sent out on the referendum had any effect on the vote, or especially if you do have a feeling, you as a board have the ability to run a new referendum. Are you willing to step up to the plate and renew our faith in you?” Howard asked the board during the public comment period.

The legal counsel for the Board of Education for the district said that is not a viable option.

“The short answer is the referendum that was passed cannot be reversed or nullified. … There’s no such procedure in the statutes for the reversal or the nullification or repeal of a referendum. There’s no process for that,” said William Fahey, legal counsel. “There’s no precedent in Wisconsin for the repeal of a referendum — by a judge, by the courts. I think we could not reasonably sit here and think that this could be repealed.”

However, the BOE could pass a new resolution and hold another referendum, but it would not be in place of November’s referendum. A new referendum, if passed, would give the board more authorization to issue more bonds and debt.

Moving forward

Figueroa said the district borrowed the $88 million immediately following the election, so-as to cover initial expenditures, like the purchase of land and design of a building. It also allows the district to earn interest, thus offsetting potential inflationary costs.

There is no required legal timeline to complete the project before it becomes null or void. “There is no time limit on when you have to start the project, but there is a time limit on when you have to issue the bonds,” Fahey said. The district is still hoping to purchase a plot of land soon, and for a bid packet to go out in the coming months. An architect and construction team would then be chosen, with construction hopefully beginning in the fall of 2023 or in the spring of 2024, with the new high school ready to be open to students in 2025.

“The main reason to start the project as planned is to optimize the tax dollar investment,” Figueroa said.

Olson said the district will lose money on the project by delaying. 

“In normal years, the district plans for an average increase in costs of 2.5 to 3%. A delay of 6 months could have a negative impact on dollars available from the referendum of $1.1 to $1.32 million. A year (delay) would be $2.2 to $2.64 million,” Olson said. “This is a very conservative estimate, last year inflation was above 7% and interest rates have been rising. The sooner the project begins, the more dollars that will be available to address material/physical needs of the projects versus interest or inflation loss of value.”

The district is always looking at ways to reduce the tax burden, from the budget to its own land. Once the new school is built, the questions turns to the 60-plus year old building, which could be torn down and sold for housing development, which in turn would increase the tax base.

The first proposed location for the new high school, located on the far east side of town off of 31st Avenue, was voted down in a December meeting of electors. The board now has the option to find a different plot of land to bring to another meeting of the electors, or try to get the same location to pass. However, if the same location is voted down a second time, it cannot be proposed for another 12 months. Any meeting of the electors, by state statute, needs to be posted in consecutive weeks prior to the election, meaning about 9 days minimum of advanced notice.