Next Southern Door Leader Will Face Complex Financial Situation

The next Southern Door County School District superintendent will step into a complicated situation when it comes to the school’s finances.

Those financial challenges were presented to the board during its Jan. 31 retreat when Auditor Amber Drewieske gave the board a preview of the 2022-23 audit. After that, Interim Superintendent Tony Klaubauf called for meetings with school employees on Feb. 8 and Feb. 15 to explain the district’s financial situation. Klaubauf said he held the meetings for the purpose of transparency.

“I have done this repeatedly in other districts as we went from one year to the next,” Klaubauf said.

District Business Manager Jason Melotte said the district had no major bookkeeping issues in the report, but Drewieske advised the board to build up end-of-year reserves. Melotte said funds get tight for Wisconsin school districts in December and January. Southern Door, for instance, waited throughout the first semester for $5.2 million in local property-tax revenues to arrive in late January, and the second state-aid payment of the school year ($293,000) doesn’t arrive until March. Combined, that’s 40% of general fund revenues in the district budget for the year, based on district budget summaries.

For at least the past eight years, Melotte said, Southern Door has been short-term borrowing in late fall to make ends meet, paying off the loans as soon as the tax revenue comes in. This January, months after borrowing, the district had just enough left in the general fund to cover costs and paychecks, Melotte said.

Temporary or short-term borrowing is not unusual in Wisconsin, said Klaubauf. Districts he previously served, including Mishicot and Denmark, needed short-term borrowing. Door County schools in particular rely heavily on local tax revenues that arrive during the second half of the school year.

Sturgeon Bay schools – the largest district in Door County with an enrollment around 1,065 last year, just ahead of Southern Door at 995 – have not needed short-term borrowing recently, but they did five years ago, said Jacob Holtz, Sturgeon Bay schools business manager.

“Every district I have worked in did some sort of short-term borrowing,” said Brett Stousland, Gibraltar schools superintendent, referring to Barneveld and Germantown. “Oftentimes, it is in the form of a line of credit so if you don’t use it, you don’t have to pay any interest.”  

Melotte is attempting to have more money saved by June 30 this year than the previous year. He and Klaubauf said there’s a possibility of having a balanced budget for next year, after cutting deficit spending to $100,000 for this 2023-24 school year. 

The immediate goal is to build up that end-of-year balance year-after-year, take out shorter loans and eventually, none at all.

$14.9-million Capital Project Will “Strain” Budget

Complicating matters further, Southern Door is completing a capital-improvement project that voters approved in a $14.9 million 2022 referendum. Due to rising costs, a bus-maintenance garage and greenhouse were eliminated from the project. Klaubauf said he should find out later this month whether enough funds would be remaining to at least construct the shell of the greenhouse after the completion of the 40-yard-long fitness, practice and community facility.

Klaubauf said the addition would be staffed and heated, but how they’ll pay for that remains to be budgeted.

“We never told anyone we didn’t have enough funds to cover the cost of running the new facility,” Klaubauf said. “However, we don’t know what the costs are at this time. That will have to go into the budget planning. It will put a strain on next year’s budget.”   

He said some of that could come from a “community service fund” within the budget that the district uses for costs such as the school resource officer.

“With careful budget planning, the district will continue to provide an excellent education for students,” Klaubauf stated.