This Vote Yes postcard is rather deceptive. It should have included an extra 44 cents. (I added it.) The confusion over the difference in money per day is because of the defeasance.
I did not know there even was such a word as defeasance, until the school district decided they would take an additional $2.5 million from us last year to save us money.
Here are some definitions that might be helpful in understanding all of this.
Defeasance: debt negation without repayment
Finance the irrevocable setting aside of assets fro repayment of a debt without actual retirement of the debt, often for tax reasons.
Deception: practice of misleading somebody
The practice of deliberately making somebody believe things that are not true.
Desilu: a harebrained plot cooked up by the creators of I Love Lucy
Lucy Ricardo math is the reasoning process by which Lucy justifies a faulty fiscal policy in order to finagle what she wants out of Rickey.
We know our school board approved an extra $2.5 million tax bite last year; what was their real motivation to do that?
I cannot say, because there is no way I can know each board member’s reasoning for approving the defeasance.
We can, however, look at the facts surrounding that decision.
On an Elmbrook information sheet entitled: DECREASE IN LEVY NEEDS FOR EXTISTING DEBT HELPS OFFSET COST OF HIGH SCHOOL PROJECTS, it states that:
“In 2005, the district finished paying off bonds borrowed for the Swanson and Wisconsin Hills referendum. The taxes needed for the payback of principal and interest on the districts debt would have decreased from $2.9 million to $1.7 million. However, knowing that the district would be borrowing for high school projects at some time in the future, the Board of Education chose to collect $4.2 million, with plans to use the additional funds received to pay back bonds for Brookfield Elementary and Dixon Elementary Schools early, thus saving an estimated $750,000 of interest costs. The 2006 (current year) tax bill of the average home reflects the collection of this $4.2 million dollars.”
According to Bob Borch, that $4.2 million included the defeasance $2.5 million. The $2.5M added $110.55 to the average home’s 2006 property tax bill or .33 / $1,000 of property value. That defeasance money did not go to immediately paying off some of the $11.78 M of principal on Dixon/Brookfield El’s debt, instead it is invested to pay off future callable bonds from 2012 – 2015.
So why did the Elmbrook board and district do this? I can’t say. Some board members may have voted for this because it would save the Elmbrook taxpayers $750,000. This would be the defeasance rational. (Funny though, the majority of the board was not too worried about implementing 4-K, costing us about $750,000 this year.)
The school district refers many times to the $108.8 Million referendum as only increasing our average property tax bill by $191 this year. Board member Tom Gehl made it very clear at a recent board meeting that it still COSTS us the $1.02/$1,000 valuation or $343/year for average Brookfield home.
Since the Elmbrook administration and the Vote Yes group continually use the increase of 50 some cents a day/ $191/year when the real cost is 94 cents/day and $342/year, I have a hard time swallowing this defeasance was done purely for our benefit.
Lastly, we come to the Desilu factor. Possible I Love Lucy show episode scenario? Lucy Ricardo has an existing furrier bill for her mink stole of $1,178.00, but she wants a new mink coat too. She knows Rickey will never agree to an even higher monthly payment, so she cooks up a scheme.
Lucy tells Rickey she must borrow $250.00 from him in order to save $75.00 in interest on her existing furrier bill. She then plans to invest that money for a few years in order to pay it down later.
What she really wants is the very expensive new mink coat. This costs $10,880.00. She knows he will never go for that idea. But she plans that she can tell Rickey he can afford to buy her that coat because their payment will only increase by about $1.15 a day for the first year. (This number is different from ours because the Ricardos must pay for the whole coat, not divide it across everyone in their apartment building.)
Rickey goes along with it because he knows there will be no living with her until she gets her way, not realizing that he just agreed to $945 extra for the next 20 years. We all laugh at the stupidity of poor Rickey.
So there are my 3 scenarios for why our board charged us $2,500,000 extra last year.
You decide which one best fits the facts. (I am not laughing.)
P.S. Don’t forget, “And if both questions fail, that home would pay $70 or a decrease of $117.”
ONLY 1 MORE DAY UNTIL MILLIONS OF DOLLARS TUESDAY!
WANT TO CONTACT ME ANONYMOUSLY? CLICK HERE
LINKS:Brookfield7 postings Betterbrookfield, Votenoapril3.com
