Wauwatosa School District staff project modest year-end surplus; $3.2M property-tax chargeback will temporarily draw down reserves

A staff member for the Wauwatosa School District told the board during the February financial review that updated projections show full-year expenses of about $63,500,000 against a $64,800,000 budget, a variance the presenter estimated at roughly $1.2 million in the districts favor.

The staff member said the district had updated the budget to include a proposed revision, to be considered Monday, March 23, that records a roughly $3.2 million property-tax chargeback as an expense. "We will recapture the entirety of the property tax chargeback next year when the Department of Revenue allows us to put that back on our levy," the staff member said.

The presentation broke down revenues and expenses through February. The staff member noted most property taxes have already been received, while the bulk of state aid typically arrives later in the year. On salaries and benefits the presenter said year-to-date spending is close to projection, with payroll timing and a limited number of remaining payrolls shaping the full-year forecast.

Using its analytics tool, the district ran a two-year retrospective and showed how earlier use of the tool would have flagged overspending risks in "other objects" and salaries as an early warning. The presenter said that early-warning capability could have prompted the business office or departments to limit discretionary spending earlier in the fiscal year.

The districts revenue forecast from the tool showed a point estimate of about $854,000 in excess revenue; the staff member urged caution and offered a conservative revenue outlook of roughly break-even. Taking both expense and revenue projections together, the staff member said a prudent forecast is a positive variance between approximately $600,000 and $1.6 million, though final results depend on remaining spending and state aid timing.

Because the property-tax chargeback is being recorded this year, the staff member said the district will temporarily draw down fund balance by about $2 million. That reduction reflects the $3.2 million chargeback offset by the projected year-end surplus; the presenter said the district expects to restore the balance next year once levy treatment by the Department of Revenue is allowed.

The staff member also noted a routine business-office February email that sets an expenditure cutoff typically generates a short-term uptick as departments spend remaining budgets, a pattern the presenter said historically evens out in later months.

The board was told the proposed budget revision to record the chargeback will be on the March 23 meeting agenda for formal consideration.