CHIPPEWA VALLEY - PART FOUR: “NO MILLAGE INCREASE.”

[Shadowninja]

Yep. I pulled the schedules apart, and there is a very good Part 4 here. One correction to what we were calling it, though: the application does not show the full cost of "bringing the bond to the ballot" in the campaign/election sense. It shows estimated bond issuance costs and, separately, a small amount of reimbursable election costs. I would keep Lady B very precise about that.

Here is how I would write it:

👑 PART FOUR: "NO MILLAGE INCREASE." NOW LET'S TALK ABOUT WHAT THAT MEANS.

Dearest reader,

Lady Budgetdown has one more page from Chippewa Valley's 3881 sitting on her desk.

And this one may be the most useful page in the entire 140-page pile.

Because if you've followed school bond proposals for any length of time, you've probably heard some version of this:

"NO TAX RATE INCREASE."

Or...

"ZERO MILL INCREASE."

And Chippewa Valley's proposed $288 million bond comes with its own version.

According to the proposed ballot language, the district expects the annual debt millage needed to pay its existing and proposed bonds to be at or below:

8.64 mills.

And the increase over the debt millage levied in 2026?

0 mills.

Well.

That sounds simple enough.

But you know Lady B.

She turned the page. 👓📜

Because "no millage-rate increase" and "no new debt" are two VERY different sentences.

Chippewa Valley is asking voters for authorization to borrow:

$288,000,000.

That is new bond principal.

The fact that the district's financing model expects to keep its debt levy at 8.64 mills does not make the new borrowing disappear.

It tells us how the district proposes to structure the repayment.

And the district's own financial summary gives us more of that structure.

The application models the proposed bonds over a maximum of 25 years at an estimated average interest rate of 4.75%.

It reports an average annual millage associated with the proposal of approximately:

2.47 mills.

Meanwhile, the district's existing and proposed debt is being modeled around that 8.64-mill overall debt levy.

So how can a district borrow another $288 million without increasing the current debt millage rate?

Because debt doesn't exist in a vacuum.

Old bonds mature.

Principal gets paid down.

Taxable property values can grow.

Existing debt-service requirements change.

New debt can be layered into the schedule as older obligations roll off.

And, in Chippewa Valley's case, the School Bond Loan Fund is also part of the financing structure.

In other words:

"No millage increase" does NOT mean:

"No new borrowing."

It does NOT mean:

"No interest."

And it certainly does NOT mean:

"$288 million costs taxpayers nothing."

It means the district's financing model projects that all of this can be structured without increasing the 2026 debt-millage rate above 8.64 mills.

Those are very different things.

And then Lady B found another little ledger.

Because apparently borrowing $288 million also costs money.

Chippewa Valley isn't proposing to issue all $288 million at once.

PFM's schedules model two bond issues.

The first:

2027 School Building and Site Bonds
$180,300,000.

Estimated bond issuance costs?
$2,310,873.

Those estimated costs include:

Bond discount: $1,803,000

Bond attorney fee: $198,383

Financial consultant fee & expenses: $184,690

Credit rating: $78,500

Qualification of bonds: $40,000

Official statement printing & mailing: $2,500

Notice of sale publication: $1,800

Treasury filing fee(s): $1,000

Auditor's consent fee: $500

Paying agent upfront fee: $500

Contingency: $0

Total:

$2,310,873.

The schedule then shows another $23,678 in "other costs," including $20,000 in reimbursable election costs.

That brings total bond issuance and other costs for the modeled 2027 issue to:

$2,334,551.

Then comes the second planned issue.

2030 School Building and Site Bonds

$107,700,000.

Estimated bond issuance costs:

$1,438,303.

That includes:

Bond discount: $1,077,000

Bond attorney fee: $135,493

Financial consultant fee & expenses: $126,610

Credit rating: $67,500

Qualification of bonds: $25,400

Official statement printing & mailing: $2,500


Notice of sale publication: $1,800
Treasury filing fee(s): $1,000

Auditor's consent fee: $500

Paying agent upfront fee: $500

Contingency: $0

The schedule shows another $7,020 in "other costs."

Total bond issuance and other costs for that modeled issue:

$1,445,323.

Now Lady B has a calculator.

So naturally...

$2,334,551

*

$1,445,323

=

$3,779,874

in modeled bond issuance and other costs across the two issues.

But wait.

Because this ledger has another column.

The district doesn't expect all of the borrowed money to be spent the day the bonds are issued.

The 2027 schedule projects the construction fund being drawn down over approximately three years.

While that money is waiting to be spent, PFM assumes the remaining project-fund balance earns interest.

Projected earnings from the first issue:

$2,982,884.

Projected earnings from the second:

$796,989.

Combined:

$3,779,873.

Yes.

Lady B checked it twice.

Modeled issuance and other costs:

$3,779,874.

Modeled construction-fund interest earnings:

$3,779,873.

Difference:

ONE DOLLAR.

😂

Well played, spreadsheet.

Now, that does NOT mean those costs cease to exist.

It means PFM's financing model assumes the interest earned on unspent bond proceeds will essentially offset the modeled issuance and other costs dollar-for-dollar.

And those interest earnings are projections.

The first series assumes the project fund earns 1.00%.

The second assumes 0.62%.

Actual earnings could differ.

Just as actual interest rates, taxable-value growth, bond pricing and other financing conditions could differ from the assumptions used today.

And that brings Lady B back to the phrase that started this entire post:

"0 mill increase."

That statement can be completely accurate.

But it answers one very specific question:

Will the modeled debt-millage RATE increase from the 2026 levy?

According to Chippewa Valley's application:

No.

It does not answer:

How much new principal will be borrowed?

$288 million.

It does not answer:

How much estimated interest accompanies that borrowing?

We covered that in Part Two.

It does not answer:

How much existing debt is already being repaid?

We covered that too.

And it doesn't tell you how the new debt is layered into the old debt over time.

For that...

you need the financing schedules.

And now you have them.

This is why Lady Budgetdown keeps saying the same thing:

A ballot question gives you the headline.

The paperwork gives you the ledger.

Neither Lady B nor a school district should decide whether this proposal is worth it for you.

That's your decision.

But if you're going to make that decision...

you might as well know what "0 mill increase" actually means.

Support Lady Budget Down

https://ko-fi.com/ladybudgetdown

With receipts and respect.

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