Facilities committee reviews contingency tracker, rebate funds and possibility of using project savings to lower tax levy

Waunakee Community School District staff updated the Facilities Committee on the capital contingency tracker for the new middle school, explained a large owner contingency entry tied to the Inflation Reduction Act tax rebate, and said significant interest income and unspent referendum funds could give the board flexibility to consider lowering the district’s property tax levy.

Staff described two contingency columns — a construction manager contingency and an owner contingency — and said the owner contingency would be nearly spent if multiple pending items (site fence, equipment, maintenance shed, stormwater work) move forward. Staff reminded the committee that the district placed $1,100,000 in the owner contingency for purposes tied to the Inflation Reduction Act; staff said that amount will generate a “significant rebate” back to the district and that Heritage’s tax-credit process was underway with IRS paperwork handled by an outside partner.

Committee members were shown that the construction manager contingency balance and an owner-side contingency balance both exist and were asked to watch a $3,000,000 figure on the construction manager side. Staff also noted roughly $2,500,000 in currently unspent dollars in the maintenance space and reported that the project had earned about $6,800,000 in interest since the start of the project; staff proposed returning $1,700,000 into the financial plan to smooth the levy over time and fund long-term planning assumptions.

Staff framed these figures as part of a discussion the full board will have at an August workshop about the state budget’s implications for spendable revenues and the local property tax levy. Staff said 12 of 16 Dane County districts and the county budget committee have seen reductions in state equalization aid, and that Waunakee’s current financial position provides flexibility many districts lack. Staff recommended the board consider options — including using some project savings or interest earnings — to reduce the tax levy when the board meets to review the state budget outcome.

Committee members did not take final action on the tax-levy options at the Facilities Committee meeting; staff said the contingency log and financial forecast would be part of the August board workshop packet so the full board can consider whether to return interest or savings to taxpayers through levy reduction.