Refinancing referendum passes in Brown Deer

Aug. 13, 2014

Brown Deer — Voters pverwhelmingly passed a referendum allowing the Brown Deer School District to refinance and restructure its debt.

The referendum, included on Tuesday's primary election ballot, passed with the approval of 70.7 percent of Brown Deer voters with 1,518 votes in support and 630 votes against the referendum.

The referendum question asked voters to issue $4 million in general obligation bonds to refinance three existing loans. Emily Koczela, the district's business manager, has said the referendum would allow the district to refinance and restructure its debt in a way that would save the district between $300,000 and $500,000.

One of the district's debts has 12 years remaining, and the interest varies per year between 5.2 percent and 5.7 percent. Koczela has said current interest rates are much more competitive, based on the low rates she received on borrowing from the 2011 referendum.

The other two debts are State Trust Fund loans. One of these loans totals $750,000, and the other is paid down to $480,000.

As part of the referendum, those State Trust Fund loans would be switched from the non-referendum debt service fund to the referendum-approved debt service fund. Those loans reside in a fund that must be paid off with the general tax levy, which is within the state revenue cap. By moving the loans to a new fund, the district would be able to pay it off with non-levy funds, which frees up money that can be used in classrooms.

By moving the State Trust Fund loans to a new fund, the district would also have the potential to pay off those loans ahead of their scheduled dates.

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