Verona Area School District approves $7 million defeasance, board hears budget progress for 2025–26

The Verona Area School District Board of Education voted to authorize a $7,000,000 defeasance to an escrow account that will be used to prepay callable portions of the district's 2018 general obligation bonds, a move officials said will reduce future interest costs.

Board President Joe Murphy introduced the resolution and made the motion to approve; Juan Carlos seconded the motion. The board voted in favor; the resolution passed.

District officials told the board the defeasance will be funded primarily from the district's additional levy reserved in fund 39 and a one-time transfer of $800,000 from fund 10. Finance staff said the transfer combined with the $6,000,000 available in the fund 39 levy will allow the district to set aside the $7,000,000 now and turn it over to the district’s financial adviser, who will hold it until the applicable debt becomes callable.

Why it matters: administrators said the defeasance will reduce the amount the district pays in interest over time. Chad, a district staff member presenting the budget update, said the board’s prior defeasance strategy has saved taxpayers roughly $10,000,000 in interest and gives the district more flexibility when layering any future capital borrowing.

Budget context and year‑end outlook District finance staff provided a three-part update covering the 2024–25 year-end position, progress on balancing the 2025–26 budget, and several related spending decisions.

Pete, a district finance staff member, told the board interest earnings are tracking about $235,000 above what was budgeted. The district also faces a roughly $250,000 shortfall in special education reimbursement compared with the 32% reimbursement rate that was assumed when the current budget was set; Pete estimated the actual reimbursement rate will be closer to 30.3% when the Department of Public Instruction finalizes numbers.

On the 2025–26 budget, the district reported a substantially improved outlook compared with an earlier estimate of a $1.6 million deficit. Administrators said the largest single change came from switching health-insurance carriers, which they said will save about $1.5 million next year. The district has also placed a $700,000 placeholder in the 2025–26 budget for a proposed on-site employee clinic; board members were told a full contract and implementation plan would return for board approval before any clinic launches.

Other changes described to help close the 2025–26 gap included planned reductions of roughly 5.5–6.0 full‑time equivalent positions through retirements or unfilled openings, modest open‑enrollment revenue increases (about $100,000), and other line‑item adjustments. With those and other changes, administrators said their current projection is a balanced 2025–26 budget with a small contingent surplus if assumptions hold; they cautioned assumptions could change pending final state budget actions.

Restrictions on funding sources Board members asked whether levy money in fund 39 could be repurposed if the district needs to pull money back. Finance staff said the $6,000,000 portion of fund 39 is legally restricted by the wording of the referendum that created it and can only be used for capital debt. The only discretionary source that could be held back, staff said, would be a one‑time transfer from fund 10, which would appear as a surplus in the operating fund.

Votes at a glance - Resolution authorizing transfer of funds and establishment of an escrow account to defease certain general obligation corporate purpose bonds (Series 2018, dated 11/19/2018). Motion: Joe Murphy; Second: Juan Carlos. Outcome: Approved (voice vote).