Board approves $45M promissory notes; auditors warn fund balance below policy
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Summary
The board approved awarding the sale of $45 million in general‑obligation promissory notes after receiving market bids and a rating update; external auditors gave a clean opinion on the financial statements but noted the district's fund balance sits below the board's 15% policy target and that a federal single audit remains to be finalized.
The Wauwatosa School District Board voted March 23 to award the sale of $45,000,000 in general obligation promissory notes to finance approved referendum projects.
Financial advisers said seven bids were received and the low bid was accepted; the district's total interest cost on the financing was reported as lower than anticipated. "We did receive 7 bids... Northland Securities was the low bid," a financial adviser said during the presentation. The settlement (closing) date was set for April 9 and the first interest payment for October 1, 2026.
Budget and credit context: The district's external auditor presented the annual financial statements with a clean (unmodified) opinion but explained the audit report date was Feb. 19 rather than the Dec. 15 statutory target due to onboarding procedures and actuarial work. The auditor also noted the district ended fiscal year 2025 with roughly $10.8 million in fund balance; that level left the district below its board‑adopted 15% fund balance policy. The auditor said the shortfall was a primary factor in Moody's lowering the district's rating to Aa2.
"You have a clean, unmodified audit opinion on your financial statements," the auditor said, while also warning that the fund balance level merits attention. Advisers told the board that improving fund balance or aligning policy with current realities were the options to manage the credit position.
Board action: The promissory‑note sale resolution passed on roll call (members present voted yes; one member was absent). The board also discussed a separate cash‑flow borrowing resolution tied to a property tax reassessment (a $3,502,031.13 chargeback) and agreed to consider emergency cash‑flow borrowing at the April meeting to protect summer payroll liquidity.
Next steps: The auditors will finalize the single audit testing for federal grant programs and upload to the Federal Audit Clearinghouse by March 31. The board will consider the proposed FY25–26 budget revision and any emergency cash‑flow borrowing at its April meeting.
