May 30, 3036 – By ANASTASIA PENCHI
DE SOTO, Wis. – The De Soto Area School Board may be asking voters to approve an operational referendum this fall.
The school board held a special meeting on May 12 so board members could discuss an operational referendum timeline, budget details and communication strategies. The group decided that November 2026 would be the best choice for operational referendum timing during the two-and-a-half-hour meeting.
Details will need to be finalized in August for that to happen.
“The number has to be the right number and we have to be able to explain it,” said Holly Nickelatti, board president.
DISTRICT CHALLENGES
Voters have refused three operational referendums during the past two years, and the district is wrestling with additional challenges involving declining enrollment and aging facilities. Community members protested an elementary principal who was put on leave at the beginning of 2025. By the end of the year, he was rehired, the superintendent resigned and several incumbent school board members were not re-elected.
Interim Superintendent Craig Gerlach, who is the third superintendent to work for the district in three years, said the district had projected a deficit when he started the job last summer, but it ended up with a $485,107 surplus.
That same thing happened the previous school year under Interim Superintendent Mike Richie, too.
“That was the reason I brought Derek (Sliter) in at the beginning of the year,” Gerlach told the board during its April meeting. “In a nutshell, I feel much better where we are with the budget.”
The district hired Sliter, assistant director of Business Services at the Cooperative Educational Service Agency 5 (an agency that serves schools and links districts to the State’s Department of Public Instruction) to do a detailed Budget Monitoring Report for the De Soto Area School District.
Sliter presented his results in April, and told the board that he predicts a budget deficit of $671,034 at the end of the 2025-26 school year.
“It’s a deficit, but frankly it’s not as bad as we thought we’d be,” Gerlach told the group.
Sliter said the district’s expected revenues of approximately $10 million were off by .32 percent; and its projected salaries and benefits of $5.8 million were off by .61 percent. He said the district’s Business Manager Cherryl Knowles, who was hired in 2023, is “dialed in very well.”
Gerlach agreed and reminded the board she inherited “a mess” when she started, and has worked under three superintendents during her three years of employment.
Sliter’s analysis did result in one surprise – in the area of non-salary expenses. An extra $230,479 was discovered unspent (a 4.47 percent difference from the district’s approved budget).
Gerlach said many factors contributed to the discrepancy: Long-term building maintenance projects were put on hold but funds had already been listed in state budgeting software; lost leadership in long-term planning due to superintendent and Business Office turnover; and general under spending by staff trying to be frugal.
“There’s been a lot of change in the school district on the board and administratively,” Gerlach said. “We took the year to really dial in and see what the budget looked like.”
OPERATIONAL REFERENDUM
School finances and budget processes in Wisconsin can be difficult to understand. Projected budgets must be set and passed in the spring before districts get their final revenue totals, which don’t come until after school has already started later in the fall.
The budget challenges in De Soto are the result of “so many moving pieces; so many changed hands,” according to Nickelatti.
Board members looked at three possible operational referendum scenarios during their special meeting, including one that had the district use up its fund balance and rely on short-term borrowing.
Board members agreed they didn’t want the extra borrowing costs and paperwork required when there is no fund balance, so the district will prioritize keeping a fund balance. Districts that do not keep a fund balance typically borrow money every November when expenses are high with school starting, but revenue is not coming in (tax payments come in January and August).
Board members also decided 28 percent of the total budget is the magic number they want to target for the fund balance.
Nickelatti told the board members to expect a heavy committee structure during the 2026-27 school year so they can better define the district’s future.
In addition to operational referendum planning, the board needs to decide what to do with a recommendation that was made to consolidate its elementary schools and relocate them to the Middle & High School campus in De Soto.
The district’s 33-member Community Stakeholder Committee, which was comprised of two people from every municipality in the district, formed in May 2025 after the most recent referendum failed. It made the recommendation in February.
“I think two years is what we need to get a solid plan together,” Nickelatti said. “I think three years might be pushing it.”
Now that the district is confident in its budget numbers, the next steps for the board are to determine how much money to ask for in an operational referendum, decide how long it needs the money and whether it should be a one-time or recurring referendum.
“You’ve got to get this next one passed,” Gerlach told the board. “You just have to.”
Anastasia Penchi is veteran writer who spent 13 years as a newspaper journalist and now works as a freelance writer. You may have seen her work in Coulee Region Women’s magazine, the Great Rivers Road blog and Explore La Crosse. Her passions are helping people in poverty and trying to save traditional journalism. She resides in Genoa and is a board member with Couleecap Inc. She can be reached at callmeloislane@hotmail.com.
Add comment