Finance committee reviews proposed 2025-26 budget; board projects 3% levy increase, flags special education and food-service shortfalls

The Manitowoc School District Finance and Facilities Committee on Oct. 7 reviewed a proposed 2025-26 budget that includes a projected 3% increase in the district’s total tax levy and new levy amounts dedicated to referendum-backed debt service.

Nathan (staff member, business office) told the committee the proposed levy total is projected at $29,606,000, a roughly 3% increase over the prior year, and said the district will combine the traditional operating levy (Fund 10) and a referendum-approved debt levy (Fund 39) when setting the property tax level. He said the committee will review the proposal again at the full-board budget hearing next week and that the Department of Public Instruction (DPI) will issue general aid certifications afterward, which will provide final state aid and revenue-cap numbers.

Why it matters: the committee heard the budget now because DPI aid numbers and the revenue cap will be certified in mid‑October; those figures affect the board’s property-tax decision and the final budget the board must adopt. Committee members were also shown how recent property valuation increases and referendum debt reshape levy and mill-rate calculations.

Key budget details discussed

- Special education (Fund 27): Staff reported increased staffing and other expenditures in special education. The district is projecting roughly $5,120,000 in state special-education reimbursement for the coming year versus approximately $3.57 million the prior year; staff characterized the reimbursement rate as likely to land around 38–40% (the state had discussed 42%), and said final numbers will arrive with DPI certifications around Oct. 15. Nathan noted that Fund 27 may show a deficit tied in part to a $900,000 board-authorized baseball-field expense funded from general funds.

- Fund 10 (general operations): The presentation showed reductions in salary and benefit spending reflecting prior staffing adjustments. An expense item that stood out was a 68.97% increase under “insurance and judgment,” which staff attributed to higher commercial property insurance costs.

- Debt and referendum funds (Funds 39, 46, 49): The district is levying $776,534 for Fund 39 (referendum-backed debt) and described Fund 46 as the district’s savings for capital projects while Fund 49 will be used to pay bills as projects are executed. Staff said the district is planning for a $25,000,000 building-upgrade program and will issue additional debt in coming months; interest earned on referendum proceeds will be placed into Fund 46.

- Fund balances and ratings: Nathan said the district is maintaining what he described as a healthy fund balance — approximately 27–28% of expenditures by one common measure — and that the balance will be a key metric for future credit-rating conversations (Moody’s) and future borrowing capacity.

- Food service (Fund 50): The committee was told the food-service program lost about $270,000 in the previous year. Staff said a Fund 50 balance can sustain operations for a few more years but that the district will need to decide whether to continue coverings gaps with transfers from Fund 10 or revise operations. Staff and Chartwells (the food-service partner) are pursuing higher participation rates and higher-reimbursed meal options (for example, afternoon or summer-meal reimbursements) to reduce the deficit.

Other fiscal context

- Equalized property values in portions of the district rose about 11%, which staff said would lower the estimated mill rate from about 7.05 to roughly 6.55, all else equal, because values increased while the levy is being held near current levels plus the proposed cost-of-living allowance.

- Operational referendum figures: staff reviewed the district’s operational referendum drawdown schedule: $11,000,000 drawn last year, $13,000,000 this year, $15,000,000 the next year, and $17,500,000 for 2028–29 as planned draws. Staff said the district is currently “under levying” by roughly $3,000,000 of the authority it could use; Nathan told the committee the board does not intend to take that extra authority now and is weighing alternatives like building fund balance in Fund 46 instead.

What the committee directed or decided

No budget motions were adopted at the meeting. Committee members were asked to send questions to Nathan before the full-board hearing to enable staff to prepare answers and avoid delays during the public hearing.

Ending

Committee members will receive the finalized DPI aid certification and the staff-prepared budget materials in mid‑October; the full Board will hold a public budget hearing the week after the committee meeting and will later set the district’s property tax levy.