Park Rapids school board considers tax impact of reduced obligation
The workshop was held at a special meeting at the high school media center.
ICS consultant Jason Splett presented some tax impact estimates provided by Ehlers financial advisers for parts of the project discussed at the June 7 school board meeting. These included actions approved by the board of directors that can be taken without a bail referendum.
Splett said the estimated budget was $ 42.4 million for priorities identified by the board on June 7, including “Option A” for safety and security improvements at Century School – school offices being moved along public entrances at the east and west ends of the building.
With “option B,” securing both entrances by bringing visitors to the current school offices deeper inside the building, it would cost around $ 38.8 million, he said. Both options include moving the high school office forward to secure the main entrance to the building.
Splett also noted that a rental tax could fund around $ 2.7 million to add space for art or agriculture programs and the alternative learning center at the north end of the high school.
Board members discussed the pros and cons of the two security options for Century School and the “domino effect” of the high school reorganization. Board chair Sherry Safratowich expressed her preference for “Option A”, saying “Do it right”.
Board member Stephanie Carlson asked if a second pickup and drop-off lane on the west side of Century School would really improve safety. She expressed doubt that parents whose children go to both sides of the building will make separate drop-offs at the two entrances.
Superintendent Lance Bagstad cited the results of a survey of the pick-up and drop-off system last year. He said parents preferred the traffic from previous years.
Board member Dennis Dodge asked if the extra security for “Option A” is worth $ 3 million. Safratowich replied, “If there was an event, I want to be as safe and secure as possible. It’s like buying insurance.
Board member Dana Kocka agreed, “If anything could happen, I would kick myself. 3 million dollars is a lot of money, but if something happens… ”
Carlson said anyone could be called from office class and then go anywhere in the school. She said she has visited many newer schools with a secure entrance where visitors check in through a window.
Splett agreed that most designs for building new schools have this kind of input.
Matthew Hammer with Ehlers said the estimated tax impact of the proposal with “Option A” security would be around $ 78 per year, or just over $ 6 per month. For “option B”, the tax impact would amount to about $ 70 per year, or just over $ 5 per month.
By comparison, he said, the bond was rejected in November 2020 and again in April would have raised the average resident’s annual property taxes by about $ 116.
Safratowich said given the small difference in tax impact between the two options, the choice of “Option A” makes sense.
Splett said they also plan to withdraw $ 1.8 million of parking lot improvements from the bond project and use the money from the reduction instead. Hammer said that because of the debt service structure required for the abatement bonds, it would actually increase the tax impact.
“It really doesn’t make sense to withdraw that amount,” he said, adding that the same problem applies to lease drawdown obligations.
Safratowich summed up the gist: “If you, as a voter, approve it, you are going to pay less money than if we, as a council, decide to do so. “
Safratowich said that after this project, she did not expect the board of directors to ask voters in the near future to spend more money to build a new bus garage on school property.
She asked the board if they were comfortable continuing to rent garage space at the fairgrounds, which is already undersized for the needs of the neighborhood, or if now is the right time to also finance a new bus garage. She said it will probably be another 20 to 25 years before the school board can ask for that kind of money again from its constituents.
Kocka said he had heard voters oppose the construction of a bus garage, and if it’s related to any other linkage issue, “I’m just afraid it will derail that.”
Dodge argued that having the bus garage closer to the school improves safety by making it easier to evacuate students in the event of an emergency.
Splett said adding the bus garage would cost around $ 3.8 million, bringing the total project to over $ 46.2 million.
Dodge said this still keeps the desired bond below $ 50 million, showing the school board is trying to reduce its demand – previously close to $ 60 million.
Splett stressed that the board will always have the opportunity to reconsider before making a final decision on the inclusion of the bus garage. He noted that in November 2020, the bus garage was a separate voting issue that failed by a wider margin than the large bond issue.
Hammer warned that the school board must communicate clearly with voters about the tax impact of projects approved by the board and by voters, so that an unexpected increase in property taxes does not lead to confidence issues. However, Safratowich said that as property values change, it can be difficult to compare tax rates from year to year.
Council members discussed the most urgent high school deferred maintenance projects and those that could be completed as stand-alone projects approved by the council. Options included renovating the high school washrooms to comply with the Americans with Disabilities Act, parking lot maintenance, replacing exterior metal wall panels, replacing roofs, and extending the reach of dehumidification systems and cooling of the building.
“Honestly, there is nothing on this list that doesn’t need to be done,” Safratowich said. “It’s just a matter of when do we do them or how do we fund them. “
Dodge asked how many pieces of the project could be funded with Elementary and Secondary School Emergency Relief (ESSER) funds. Hammer responded that the use of ESSER funds is very limited and advised the board to strike a balance between regular maintenance and allocating all of their long-term facility maintenance funds to a large project.
Carlson suggested that Vanderstad and other knowledgeable staff advise the board on the most important deferred maintenance issues.
Splett said if the school board decides to hold a bond referendum in the November ballot, August 4 is the deadline for submitting its review and comments to the Minnesota Department of Education, and early voting. would start in mid-September.
As it would be another special election in a non-election year, Bagstad said, getting people to the polls will be a challenge.
Splett said the 2022 election will take place in February, August and November.
ICS’s Glenn Chiodo stressed the importance of being clear with voters on the fiscal impact of items approved by voters and the board. He said the next big board decision will be just which improvements to fund through each funding source.
Hammer urged the board to seek fiscal capacity – described as the dollar amount of the “tipping point” between what voters will or will not accept.
The school board will continue this discussion at its next regular meeting, scheduled for 6 p.m. on Monday, June 21 at the Frank White Education Center.