One school district in west central Wisconsin enters into a long-term lease agreement for a new $3.66 million school to serve approximately 50-60 students a year

A new tactic for school districts to build a school without going to referendum?

If schools in Wisconsin are destitute, how does a school district have enough money to pay a $1 million lump sum upfront towards the construction of a private building and then pay over $200,000.00 a year to rent the new, expensive building? 

 

 

It seems like every time you turn around these days, there is another story in the media about a school district that supposedly cannot educate our children properly and are unable to make ends meet because Wisconsin’s K-12 education system is so woefully underfunded.  At least that is the spin the educational establishment is trying to sell the general public and voters. 

Governor Evers, Department of Public Instruction Superintendent Underly, and education officials all over the state push this narrative that our schools are starving in their incessant attempts to win more and more unneeded K-12 education funding for an already well-financed education system.

Lately, they have been very successful in this effort. Despite relatively flat statewide enrollment, the last three state budgets, passed with Republicans in control of the Legislature, have increased K-12 funding in our state by $1.54 billion or 22%. Of course, this increase in education funding at the state level comes on top of the billions in federal pandemic aid that was used to fully open up schools and stem our children’s learning loss.

 

 

Despite this flood of additional K12 funding, education politicians will not stop pleading poverty and will not stop asking for more taxpayer support. 

This narrative is also used by local Superintendents and school boards to argue that school district voters should approve via referendum an increase in local property taxes to fund operating expenses beyond what is allowed under state law or for long-term construction projects.

Approving an increase in local education spending and the higher property taxes that go along with that higher spending has become a common and reoccurring experience in recent years here in Wisconsin. Last year, there were 166 K12 education referendums put to taxpayers and 74% of them passed. This past April, there were 83 local school district referendums across the state, with 46 or roughly 55% passing. There are approximately 425 school districts across the entire state. 

Even though local taxpayers have been voting to approve the majority of these referendums, the education establishment in this state believes that it is wrong they must ask permission before they allowed to spend more than what state law allows or to start a new construction project. These advocates believe that the number of school districts “forced” to go to referendum each year to pay for operating expenses and/or construction projects is proof that taxpayers are not fully funding education in this state and they worry that this year’s success rate of only 55% is a signal that taxpayers may be more inclined to vote no going forward. 

One school district in west central Wisconsin may have come up with a new strategy to get around the need to ask taxpayers for permission to build a new school.

The River Falls School District (RFSD), located near the Minnesota border, recently approved a 20 year long-term lease agreement with a private developer to house a small charter school that serves about 50-60 kids a year. 

The River Falls School District serves approximately 3,400 K-12 students. Enrollment hit a high back in the 2019-2020 school year with 3,517 students, according to the Department of Public Instruction website. Last year, there were 3,488 students enrolled. RFSD has a high school, a middle school, four elementary schools and a charter school, the Renaissance Charter Academy (RCA). 

On the most recent standardized Forward Exam, 40.7% of RFSD students scored proficient, or at grade level, on English Language Arts and just 36.8% scored proficient on the math portion of the test. 49.1% of RFSD students failed (scoring below grade level) the English Language Arts portion and 52.3% failed the math portion. 

It appears from the school district website that the Renaissance Charter Academy was founded in 1998 and is for high school students who have struggled in the traditional high school setting or for those who need extra, personalized attention to get back on track academically. The Renaissance Charter Academy was recently forced to move out of its home at University of Wisconsin River Falls when the university decided to tear down Hagestad Hall.

According to school district documents and emails obtained through the open records law, River Falls School District Superintendent Jamie Benson and the school board seriously began looking for a permanent home for the Renaissance Charter Academy back in 2022. Despite this desire to find a forever solution and after looking at eight possible options, the school board ultimately decided to rent a space for the school. 

The leasing agreement with RF Ren Project LLC shows that the Renaissance Charter Academy will be moving in to a newly constructed building that has been changed to meet their needs as a school. In fact, the River Falls School District agreed to pay $948,750.00 up front to help with these construction costs. When the cost of the building came in higher than originally projected, the school district agreed to pay an additional $67,000.00 to help cover the initial cost overrun. All told, the River Falls School District paid over $1 million dollars in cash to get the private building finished and the Renaissance Charter Academy opened in the new space this fall.

The lease agreement basics:

• RFSD is leasing 10,800 square feet at $19.65/sq.ft + 2% annual increases
• 20 year lease with the option to purchase the building in year two and up to (3) five year renewals
• Monthly base rent now through 8/31/24 – $17,685.00 a month or $212,220.00 a year
• Monthly base rent September 1, 2041 through August 31, 2042, at the end of the initial 20 year lease – $24,768.00 a month or $297,216.00 a year
• School District has agreed to pay “additional rent” for insurance and other regular services each month. Landlord estimates that the additional rent will cost approximately $1,500.00 a month
• For the first year of the agreement, RFSD will pay at least $230,000.00 total in rent. There are sure to be other costs that the school district will be responsible for that were not laid out in the original lease agreement. By the end of the lease agreement in 2041, the school district will be paying at least $315,000.00 a month in rent. 

 

Given that the commercial real estate market has taken a hit since the pandemic with the government closing down some private businesses and many businesses unable to survive the resulting economic turmoil, did the RFSD pay unnecessarily a premium for this building given market conditions?

 

Another question taxpayers need answered is why didn’t the school board and the superintendent look to carve out space for the Renaissance Charter Academy at the existing high school? Looking at the aerial shot above of the high school and the layout of the campus, it does not appear to be cramped or constrained in size. Why not find a group of classrooms within the current building for the fifty Renaissance students to fully utilize the facilities at the high school like science labs? The superintendent talked about the new RF Ren Project building having individual space for an upgraded shop, a new chemistry lab, the guidance counselor, a full kitchen, a commons, a library, a media center, the social worker and other personnel.

All of these must already have a home at the high school. Now, River Falls School District has two high school biology labs, two shop facilities, and many others. 

The school district just recently completed work on $48 million dollars worth of various building and renovation projects throughout the entire district and one of the selling points to voters is that this work would give the district flexible learning space that could be easily adapted to accommodate future learning and space needs. Finding classroom space for 50 charter school students sounds exactly what flexible learning space was created to do. 

 

Not to mention that if Renaissance has been around since 1998 and a part of the District’s long term strategic plan, why wasn’t the space needs of the charter school a part of the $48 million work?

It appears there were other lower cost options considered but that were passed over ultimately for the RF Ren Project LLC location. In an email between School Board member Todd Schultz and Superintendent Benson dated March 30,2022, Schultz mentions that “the roundabout would have been a better location and our most cost-effective option for a long-term ownership situation.”

Schulz is President of the River Falls State Bank and decided not to run for reelection this past April.

It should be noted that one possibility looked into early on as a home for the school was a building owned by State Representative Shannon Zimmerman (R – River Falls). The school board did not select his building.

Here the school board talks about ultimately owning the building. This is in addition to the Superintendent Benson talking about finding the Renaissance Charter its forever home. Never seems that leasing space was actually the end game here.

If the goal all along was to find a permanent solution for the space needs of the RCA, why not go to referendum, get the taxpayers permission upfront to build a $3-4 million dollar school and have the school district, or, more accurately the taxpayers, own the building outright? Why waste taxpayer dollars on high-cost rent that will result in no equity or long-standing value for the district?

In terms of referendum questions, this one seems like it would have been pretty straight forward. We have a small group of kids at the alternative high school, we think it would be best to build new, separate facilities for this small group of kids, and we think it will cost close to $4 million dollars to do it. If the district truly believes in the mission of the Renaissance Charter Academy, shouldn’t the Superintendent and the School Board have been able to convince voters this was in the best interest of the district moving forward?

Maybe the School Board ultimately believed it was too straight-forward of a proposal that taxpayers would reject.

It’s also interesting that the River Falls School District didn’t consider funding the building of a new school out of its operating budget or existing funds. The district agreed to pay $1 million up front to the developer and $250,000.00 a year for decades to come in rent, looks like the district is in a pretty healthy financial position. With that kind of money exchanging hands, the school district certainly cannot be considered destitute as many on the left continue to harangue on and on about.

 

 

But, instead of the RFSD being open and completely transparent about their intentions for the Renaissance Charter Academy and the plan for its future, the school board convened a special electors meeting to vote on the long-term lease proposal. This special electors meeting was held outside the normal budget debate timeline and at the end of summer vacation, just before the start of school when most families are worried about buying school supplies and setting up the carpool schedule for the year. We’ll bet few in the district knew about the meeting. How many attended the meeting? A dozen? Maybe two dozen? Could not have been many because according to the minutes of the special electors meeting, it lasted just 10 minutes. 

Compare that small and limited input to the input it would have received if the School Board had pursued the normal referendum route for a building project. There would have been thousands if not tens of thousands of votes on the RCA building proposal if it was included on the April ballot. 

If you look at the public documents and follow the discussion amongst the School Board and the Superintendent, it seems pretty clear that backers of the space for the Renaissance Charter Academy want the school district to outright purchase the building at some point, maybe as early as year two of this 20 year lease agreement. 

This option to purchase the building is spelled out in the lease agreement and in Superintendent Benson’s remarks to the special electors meeting, he mentioned specifically how the lease agreement had a buy option built in as early as the second year. If they Superintendent believed that it was better for the district long term to lease the facility or if he believed it was unlikely the school district could afford to buy the school outright, he would stayed silent on that option, at least for now.

If the school board were to purchase the RF Ren Project building from the private developer, it will prove to be a very expensive temporary solution for the taxpayers of the River Falls School District. 

The table below outlines what some of those costs would be. According to the purchase terms of the agreement, the River Falls School District can purchase the building for $3,465,000.00 between September 1st, 2024 and August 31st, 2025. 

 

 

 

When you add it all up, if the River Falls School District purchases the building in year two of the 20 year lease agreement, taxpayers will have shelled out over $1 million dollars to temporarily rent the space for a year. A million dollars. 

How is it that a school district in Wisconsin has an extra $1 million sitting around, not needed to keep the lights on or for teacher salaries? Tell me again how poorly funded our schools are if a school district has $1 million to pay for rent and other costs at a new private building project? Doesn’t sound like our education system is woefully underfunded or neglected by the taxpayer. 

If the plan all along was to make this new building the permanent home of the Renaissance Charter Academy, why pursue the long term lease at all? Did the School Board and the Superintendent decide that if they opened up the school and moved the kids in, it would difficult or near impossible for voters to say no to buying the building? Is this a crass political move by the Superintendent and the local politicians to get the kids into their new school, their shiny, gleaming new space with all the cool bells and whistles, and then basically dare the taxpayers to tell these kids no and push them out?

The Renaissance Charter Academy is hoping to move into their new space later this month. While questions linger about why the district did not pursue a new school building through the traditional referendum process and some will say that the time to do anything about this spending has passed, local taxpayers need to engage so that this deal does not get worse.

Put aside the questionable tactic of moving the kids in first to the new building before going to referendum, taxpayers and parents need to be advocates for the district and what is in the best interest of all the children of the district. It’s not too late to speak up, ask questions, and look for a better solution, a solution that will meet the needs of the children and the taxpayers.