Practically Speaking

Elmbrook to borrow $9 million from City?

Posted by Kyle Prast on Nov. 22, 2008

Many people are confused about the separation of City and School District. Some think they are one in the same. Some think never the twain shall meet. But there is one place where they meet and that is on the City's property tax bill. The property tax bill includes the school district's levy. It also included the Property Tax Levy Credit from the state. (I just learned a little about that at that at the district meeting about state funding and class sizes.) 

Santa's Elf:

Although I did score 93.94% on the civics quiz, I really don't understand today's BrookfieldNOW article entitled:

         "Elmbrook to borrow $9 million from city"

When did the City of Brookfield become a financial institution having Officer Jeff as it's CEO? Does he have his own Lear Jet and go off on little junkets with VK, Ted Stevens and the big three CEO's?

When did the city get an extra $9M and why wasn't it returned to the taxpayers against this years tax increase? Certainly chucking money away against the day when your impoverished local school district comes calling is not a defensible reason to maintain a 'reserve'.

Is this deal secured by school district real estate, our half of the AstroTurf, Supervisor Matt's exotic electric train collection, or some more inscrutable basket of securities?

And lastly, when the teachers union finally bankrupts the school district in a year or two, will both Officer Jeff and Supervisor Matt appear before Congress demanding a bailout?

I suppose that it might be argued that the school district does have the power and the right to continue deficit spending right up to the point where it finally collapses before the tax cap.

But where in h..l does the city acquire the right to invest taxpayer funds in such high risk investments? I argue that so doing is a direct violation of their fiduciary responsibilities to the taxpayer, and need not be tolerated.

Who do you know is a good lawyer who wants to sue the city? The School District? The state? Barack Obama? Anyone? Everyone?

    Sue them all, Sue them all,

    The long and the short and the tall.

    Sue all elected and all they selected,

    Sue all the supers and their blinking sons,

    For we're saying good-by to them all

    As back to our hovels we crawl.

    There'll be no new tax breaks  till every darned roof shakes,

    So cheer up my lads, Sue them all.*

http://www.brookfieldnow.com/watch/?watch=14&date=11/21/2008&id=48600

Elmbrook to borrow $9 million from city

With unanimous approval, Elmbrook School Board members voted this week to borrow $9 million from the City of Brookfield to cover short-term budget needs.

Invoking a seldom-used statutory ability to borrow between municipal governments, Elmbrook will skirt the unfavorable bonding market and secure a 2.2 percent interest rate from Brookfield. In total, the district expects to pay about $20,000 in interest, officials said.

According to Bob Borch, assistant superintendent of finance and operations, traditional bonding methods would have cost the district 3.5 percent interest because of current economic conditions.

"This is a very unique situation," Borch said. "Obviously, the financial markets are in turmoil."

While borrowing rates are high, the city's investments have been yielding less than normal, according to Brookfield Director of Finance Robert Scott. Scott said the October yield for the state investment pool was 1.9 percent, much lower than the 3 to 4 percent Scott said the city normally earns.

Scott and Borch explained that the arrangement between district and city will provide the lowest available borrowing rate for Elmbrook and a competitive investment rate for the City of Brookfield.

"We're serving the same taxpayers, for the most part," Scott said. "If we can reduce the cost overall, ultimately to that taxpayer, then that's a win."

School districts typically use short-term borrowing to cover operating expenses until mid-January when property tax revenue arrives.