If the $176 million facilities bond passes on May 20, local property taxes will go up. How will Forest Lake’s debt obligations compare to nearby districts?
This article, the third in a series on the school district’s bond request, looks at operating levies and facilities bonds in the Centennial, Chisago Lakes, North Branch and Stillwater districts.
Together, operating levies and facilities bonds make up the school district portion of a homeowner’s property tax.
An operating levy is voter-approved additional revenue to cover the gap between state funding and the cost of educational programs. In recent years many school districts have turned to property taxes to add to funding from the state.
The chart below, prepared by Forest Lake’s Business Services Director Larry Martini, shows the per-pupil operating levy for the districts in the Suburban East Conference and the Centennial district. Forest Lake’s levy is below the average for the group.
Of those districts, Stillwater and Centennial are neighbors of Forest Lake. North Branch and Chisago Lakes are in the North Suburban Conference.
In Forest Lake District 831, the current operating levy raises $725 per pupil or $6 million a year, about a tenth of the budget. The operating levy was passed in 2007 for a five-year term and renewed in 2011 for eight years.
Unlike Forest Lake, the North Branch school district has been unable to pass an operating levy to supplement the budget. As a result, the district adopted a four-day week in 2009. This reduced costs not just for transportation but also for heating, substitute teachers and other expenses.
This fall, North Branch will be back to five days. The board voted this month to restore the full week after the state changed the education funding formula, leading to a revenue increase of more than $1 million for the 3,200-student district. Class sizes will also be reduced and programs restored.
The increased funding will come from a board-approved (not voter-approved) levy of $300 per pupil, which the Legislature made possible last fall. The state pays 55 percent of the levy.
In addition, the location equity index will bring in $424 per pupil. Last Friday, the Legislature changed the rules to allow this amount for every qualifying district in the state. North Branch was expecting $212 per pupil.
State funding for kindergarten will also help North Branch, freeing up money for other programs.
Chisago Lakes, with enrollment of 3,291, passed a referendum last fall to bring in $225 per pupil. That district also benefits from the board-approved $300 plus location equity revenue of $424.
The Stillwater district has more than 8,000 students. Residents voted in November to renew and increase an expiring operating levy in place since 2007. For eight years, the new levy will generate $16.2 million per year, or $1,536 per pupil.
The district will expand the science, technology, engineering and math program to add art courses and develop an elementary program for world language and global studies.
Security enhancements include alarms to alert police; cameras, intercoms and radios; and new entrances to control visitor access. These security measures, similar to changes Forest Lake is pursuing in its facilities bond, were achieved through an operating levy at Stillwater.
Finance Director Kristen Hoheisel said that voters were told the district would spend $450,000 each levy year on safety and security. Changing front entrances and offices, however, requires a large amount of construction money available at one time. So the district issued debt to fund the project and will use the annual $450,000 amount to service the debt.
In the Centennial district, which covers Lino Lakes, Blaine, Centerville, Circle Pines and Lexington, voters approved a school referendum in 2011. The per-pupil amount raised is $964. This number is close to the state average of $921.
For capital improvements, a school district borrows a sum to build, remodel or repair buildings, parking lots and athletic fields. Bonds are issued, investors buy the bonds, and property taxes are assessed each year to repay the principal, with interest.
The Forest Lake district currently owes more than $10 million for building Century Junior High in 2000. If the proposed Forest Lake facilities referendum passes in May, two more sets of bonds will be issued, one in 2015 and one in 2016. The total available for facilities improvements will be $176 million.
The Minnesota Department of Education keeps building age records for each district. For buildings that are used only for academic or administrative purposes, the Forest Lake district has a total of 1,320,262 square feet in 13 buildings with an average age of 32 years. Buildings included in the average are seven elementary schools, two junior highs, the high school, district office and STEP program.
In North Branch, voters are paying a total of $4.5 million per year in facilities levies, mostly 20-year bonds, used to build Sunrise River School in 2005 and to add to the middle school and high school in the 1990s.
The four academic or administrative buildings in the North Branch district are a high school, middle school and two elementary schools. They have a combined square footage of 588,385 and average age of 23 years.
Chisago Lakes has two facilities bonds. One, passed in 2008, raised $14.2 million. The district added six classrooms to Taylors Falls Elementary and completed several deferred maintenance projects, including roofs, windows and exterior walls. The high school athletic complex got a rebuilt football stadium, new track and soccer fields. Additional land was purchased for future use.
The second bond, issued in March 1998, paid for additions to the middle school and high school. It started at $19.74 million but after being refinanced is now $16.2 million.
The Chisago Lakes district has five schools for academic and administrative use: a high school, middle school and three elementary schools. The total square footage is 606,521, with an average age of 31 years.
Stillwater has facilities debt totaling more than $40 million, including about $10 million borrowed in 2011 to build an early childhood family center. The debt was undertaken for several projects since the 1990s and is being paid off rapidly: $20 million of debt will be retired in 2016 and 2017.
Money borrowed for security upgrades, to be repaid from the recently passed operating levy, is not included in the facilities debt total.
The Stillwater district does not own an ice arena, instead buying time at a local rink. There is no current plan to expand athletic facilities, Hoheisel said, but speaking as a parent of students in the district, she believes the district could use more gym space.
The Stillwater district has 15 academic or administrative buildings, totaling 1,352,961 square feet: nine elementary schools, two junior highs and a high school, plus a charter school, central services building and early childhood center. The buildings have an average age of 33 years.
Centennial borrowed money in the late 1990s and in 2002 to build Blue Heron Elementary and Centennial Middle School near Interstate 35W in Lino Lakes. Since then the debt has been refinanced to take advantage of low interest rates and totals about $38 million.
The district owns an ice arena and leases it to a nonprofit group for operation. Home games are played there, but to accommodate the large numbers of teams practicing, the district also rents ice time at the Schwann Super Rink in Blaine.
A booster club donated a turf field last year for football, soccer and lacrosse, but with 2,200 high school students sharing one field, the district must place restrictions on its use, according to Dan Huffman, business services director.
The Centennial district buildings – five elementary schools, a junior high and a high school – have an average age of 31 years and total 1,145,105 square feet.