Tax impact of May 20 bond referendum released
The task force has made its recommendation. The costs are in. The board has voted.
Now it’s up to residents to decide: Should District 831 undertake a transformation that will not just update aging facilities but also change where junior high and high school students attend?
On May 20 a referendum will be held on a $176 million facilities bond.
The district proposes to complete the upgrades in two phases, so two general obligation bonds would be issued. General obligation bonds are backed by the taxing power of the school district and require voter approval.
The numbers presented here are from the bond proposal that the school district submitted to the Minnesota Department of Education for review and comment.
Phase 1: In 2015 the district would borrow $90,805,000. After subtracting borrowing costs, this would bring $90 million to the construction fund. Through their property taxes, local home and business owners would pay principal and interest on this debt for 30 years, from 2016 to 2045. With an interest rate under 5 percent, the total cost for principal and interest would be $172 million.
Phase 2: In 2016 the district would issue bonds totaling $97,400,000. This amount, after subtracting fees, would net $86 million for the construction fund and $10.5 million to pay off existing debt. Over the next 30 years, taxpayers would pay $185 million to retire the debt from this phase.
The grand total, including principal and interest for Phases 1 and 2, would be $357 million.
The average home value in the district is about $200,000. If the referendum passes, the increased school district property tax for that average home would start at $200 in 2016 and increase to a maximum of $332 per year by 2025. It would decline in each of the final four years of payment.
The owner of a $100,000 home would pay at most $132 per year more. On a $1 million home, the maximum increase would be $2,067.
A farmer who lives on 160 acres, in a house valued at $100,000, would pay at most $1,693 more per year.
With $176 million, the district would accomplish these goals:
- Expand the high school to include grades 9 to 12, instead of the current grades 10 to 12.
- Expand Century Junior High to include all students in grades 7 and 8. Currently there are two junior high schools, Century and Southwest, for grades 7 to 9.
- Convert Southwest to a multi-purpose building for the programs currently housed at the Central Learning Center: Central Montessori Elementary, Area Learning Center, Early Childhood Education.
- Close the Central Learning Center, demolish it and sell the land.
- Make needed repairs and upgrades to all schools, depending on needs: roofing, heating and air conditioning, doors and windows.
- Repair and expand athletic facilities, including a new track at the high school (Forest Lake cannot host meets on the existing track) and a new pool at Century (the old pool is not used for diving competition).
- Improve the high school auditorium for performing arts, and add a stage at Century for junior high students.
These were the recommendations of the facilities task force, a group of 60 volunteers who spent three Saturdays touring every building owned by the school district, and many meetings to discuss their findings.
In 2010 a previous task force made a list of needed repairs totaling $100 million. After a survey to gauge how much taxpayers might be willing to pay, the district proposed a $24 million levy, which was rejected by voters.
The task force that met in 2012 also made a list of maintenance issues that needed to be addressed. But they went beyond that, creating a new vision of how junior high and high school should be. Better than having two junior high schools, they said, would be bringing all junior high students together where they have equal opportunities. Better than having Grade 9 with the junior high would be placing them with the high school, where traditionally they fit as freshmen and where academically they belong as students taking high school classes to meet high school graduation standards.
Superintendent Linda Madsen was part of the task force but chose not to lead it: Instead, she and other district staff provided information, presenting facts about the needs at each building and legal requirements.
“I knew if I came up with a recommendation, there would be no strength in that. My goal was to facilitate the group,” she said. “From teaching, I have a lot of techniques to help people sort their thinking and prioritize.”
There were many possible alternatives, she said, and if district employees had decided what to recommend, the result might have been less satisfying.
“I don’t think we would have been as bold and creative as the task force,” she said.
After the volunteer group presented its recommendation to the school board, district staff spent time and energy getting cost estimates, addressing wetland issues, etc.
“The task force, overall, is pleased. Their big vision is intact,” Madsen said. “The task force really owns it.”
She did not anticipate this project when she became superintendent, Madsen said. From her years as a teacher in the district she knew that maintenance was behind, but “the first gap analysis was surprising.”
“No, I wasn’t expecting to do this,” she concluded.
Effect on education
Forest Lake lags other districts in the amount of money it spends on students. Because school funding has not kept up with inflation, school districts have asked voters to approve levies to bring in additional money.
In Minnesota, the average district referendum (voter-approved levy to support school operation) is $921 per pupil. In the Suburban East Conference, which includes Forest Lake, the average is $1,126. The amount is even higher in Hennepin and Carver counties, Business Director Larry Martini said.
The Forest Lake amount is $725 per pupil. This is how much residents have voted to pay through property taxes beyond what is required, or not subject to voter approval.
If the May 20 referendum passes, it will have no effect on this number: The operating referendum for Forest Lake will still be $725. That’s because the new levy is for facilities, not operating capital. The money goes directly to a debt service account.
But officials say that is not a reason to vote against the referendum. The plan is that with facilities changes, academics will improve. Part of the reason is the better science and technology labs. A big piece is combining the two junior highs.
“As the task force worked, they really listened to what’s happening,” Madsen said. They looked for ways to be more efficient, for a better way to structure academics.
The group decided it was best to keep the seven elementary schools as K-6, because the district might not be able to keep all elementary buildings open if they were K-5, she said. “But it would be so handy to have all 7-8 together and all 9-12 together. The beauty is they’re so close, Century and the high school.”
Century was chosen for junior high not only because it’s newer, Madsen said, but because it’s near the high school. Under the new “secondary campus” plan, an advanced junior high student could take a class at the high school.
“It’s a better education plan for Forest Lake,” she said.
Other school districts are treated differently by the state: They can fund deferred maintenance without voter approval.
Alternative facilities funding applies to the 22 largest districts in the state. Forest Lake is 24th largest. Some smaller districts have joined the group through special legislation.
If a roof needs fixing in one of those school districts, it can be paid for with new money. In Forest Lake, “we need to fix our roofs with operating capital,” Martini said.
Madsen has appealed to legislators to change the system.
“Wouldn’t it make sense for all districts to have this?” she asked. “If there isn’t enough money, why give this only to the largest districts?”
If Forest Lake had been able to access that deferred maintenance funding, Madsen said, “we wouldn’t need $176 million.”
If Forest Lake’s facilities bond passes, she said, she will continue to push for that. But at this point it would not affect the facilities bond.
The bond proposal is posted online at https://www.dropbox.com/sh/64eojhge33w0yi5/XYFyZYUKCF.