School Funding

Park Rapids school board set to decide on November bond election



A nearly $ 60 million bail referendum was narrowly defeated in November 2020 and again, by just 45 votes, in April’s low turnout special election.

So far this month, the school board has met weekly with Ehlers’ financial advisors and ICS education advisors to review its spending priorities before making another attempt.

Jason Splett with ICS recapped the progress they have made, noting that the school board has previously removed the following from the current linkage project, known as Project 309:

  • In high school: improvements to the marching band and the choir, common activities and fitness lab, a suspended walking track and parking maintenance.

  • At Century School: adding three classrooms, maintaining the parking lot, upgrading to LED lighting and replacing parts of the roof.

Remaining high school priorities include adding a wing for grades 7-9 in high school with a two-station training gym; reconstruction of the south parking lot; update of the auditorium; adding a scene store, updating existing classrooms; reduced improvements to the media center; relocate the high school office, kitchen and changing rooms; adding space for arts and agriculture education or alternative learning center; replacement of roof and exterior metal wall panels; improving toilets accessible to non-disabled people and modernizing the dehumidification and cooling system.

Century School’s priorities include the relocation of administrative offices to better secure entrances; improving parking, pick-up and drop-off areas; replacement of play equipment and the boiler-cooling plant; construction of a garage for buses; purchase furniture, accessories and equipment as needed; and reconstruction of tennis courts.

Splett estimated the total cost of building these items to be around $ 55.2 million. He said that did not include bond issuance costs, such as capitalized interest and bond issuance costs.

Splett then presented four potential financing solutions for this amount:

  • Plan A: Fund the entire $ 55.2 million project through a single approved voter.

  • Plan B: Use $ 2.5 million in Long Term Facility Maintenance (LTFM) funds to make roofs, exterior metal wall panels and tennis courts; use a capital obligation of $ 1 million for the boiler-chiller; use a $ 1 million indoor air quality (IAQ) health and safety bond for dehumidification and cooling; and have a voter-approved bond fund for the remaining $ 50.6 million in construction costs.

  • Plan C: In addition to the above LTFM, downtime facility and IAQ bond, use a $ 930,000 reduction bond to build Century’s parking, pickup, and drop-off area; use a $ 2.7 million rental bond to build the art-ag or ALC addition; and fund the remaining $ 47 million with a voter-approved bond.

  • Plan D: Without seeking a voter approved bond, use unspecified council approved funding to move eighth year to Frank White building, rental fee for art-ag / ALC addition, reduction for Century parking lot, pickup and drop-off area and IAQ for the high school dehumidification and cooling system. Splett noted that no source of funding exists for educational improvements without a referendum.

Again, Splett cautioned, all of these dollar amounts are for construction costs only and do not include issue costs.

School board chairperson Sherry Safratowich stressed that the school board would only move forward with Plan D if a ballot question on Plan A, B or C failed.

According to Greg Crowe with Ehlers, options A, B, and C all have their pros and cons. Despite the varying prices of the referendum stamps approved by voters for each plan, he noted, the total cost of building all three plans is the same and the annual impact of the three plans on the taxes of the average homeowner does not vary. than a few dollars.

Crowe explained that every type of bond, whether approved by voters or the board, would have a tax impact, including issuance costs. And as the amount of capitalized interest – the money spent up front to redeem the monthly payments – adjusts to the size of the bond approved by voters, the issuance costs of other funding sources will add up. .

In short, the consultants said, the fiscal impact of the project may be the same or more, regardless of the number of coins withdrawn from the deposit approved by voters.

Dave Bergeron of ICS added that each type of bond is structured differently and must be repaid according to different schedules.

School board member Dennis Dodge urged communicating clearly with the public on the total fiscal impact of the project, and not just the portion approved by voters. Otherwise, he suggested, if a ballot question sells voters a bond with a tax impact and the board approves other bonds that raise taxes even more, the public could lose faith in the school board.

Board member Stephanie Carlson called Plan A “a little cleaner” and “much easier to explain.”

The school board has decided to hold a special 6 p.m. meeting on Monday, June 28 at the Frank White Education Center to make a final choice of funding solution for Project 309 and to set a date for a bail referendum.

Safratowich has asked Ehlers staff to come back with more comprehensive cost estimates for the voter approved bond to allow the school board to move forward with a decision.

Safratowich also asked school board members which of several possible election dates they should aim for. Dodge replied “as soon as possible” – which means Tuesday, November 2.

Splett said the school board’s review and comments for a Nov. 2 referendum would be due to the Minnesota Education Commissioner by Aug. 4. He suggested scheduling the review and comments at the next regular board meeting on July 12th.



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