The general election is now in the rearview mirror, but St. Michael-Albertville voters will need to gear up for one more trip to the polls this winter season. The school district’s bond referendum is less than three months away, on February 7, 2017, and at the last school board meeting superintendent Dr. Ann-Marie Foucault spent some more time going over messages and information about the upcoming bond.
What’s new?
The district has broken down the list of bond items into four main categories: Safety, Technology, Maintenance and Activities, or S.T.M.A., to give an easy way to describe the bond to voters.
“Pretty much everything that we will be asking voters to approve fits into one of these categories,” Foucault said.
While the push for the bond referendum initially began with the proposal for a second sheet of ice, Foucault said that the school district has grown 62 percent since 2005, and she said that has meant significant increases in student needs and classroom and facility space.
State Aid
Another new piece of information is the current state aid projections on the bond. In previous conversations the school district had said that the state of Minnesota would fund approximately 40 percent of the bond, but that number is actually looking to be just over 60 percent over the life of the bond issue. However, Joel Sutter from Ehlers, the district’s financial advisors, said that state aid formula is very sensitive to changes in the school district’s tax capacity. If the district’s tax capacity begins to grow by more than current estimates, he said the district would get less state aid. On the flip side, he said that increased tax capacity would mean a lower tax rate because there would be more properties sharing the burden.
Board member Chuck Lefebvre voiced his opinion that the large state aid percentage should not be over-sold, since taxpayers also fund state aid.
Other board members agreed, but some saw more positives to the situation.
“We’ve been working for years here to get the state to have a more equitable balance on how school districts are funded,” board member Jeff Lindquist said. “This is one area where we can share the burdens with the taxpayers of the entire state rather than putting it on the backs of our local taxpayers.”
Increased cost of bond
The bond amount itself has also changed. The former number was just shy of $35 million, but Foucault had said that number didn’t include a couple other items, such as wireless internet access for the ice arena or the all-purpose athletic facility. The cost for moving the baseball fields over to the high school has also increased by over $30,000 compared to the initial bid of $170,000. And then came the fees associated with getting the bond in order: fees for the architect, bond attorney, Ehlers financial advisory and professional construction management, capitalized interest and a built-in cushion in case of cost overruns. The updated bond amount is $36.1 million.
More detailed tax impact information has also been posted to the school district’s web site. From the homepage, click on the District tab and then 2017 Bond. There is a greater range of home values and the associated tax impact of the bond, plus tax impacts for businesses of different values, apartments and agricultural land. Ehler’s has also added a tax impact calculator where you can enter in your property’s taxable market value and it will tell you the annual and monthly impact on your taxes for 2018.
The tax impact on a $200,000 home would be $45 per year, or $3.75 per month, while a $300,000 home would be $72 annually, or $6 per month. A commercial or industrial property worth $500,000 would be $228 annually, or $19 per month.
About the Bond
In order to achieve the goal of keeping local tax rates as steady as possible, Sutter said they would go for a ‘wrap-around structure’ where the bond would be interest-only for the first six years. At that point some other school district debt would be falling off, and principal payments would begin in 2023, then much more in 2027. The debt would be paid off in 15 years.
Sutter said St. Michael-Albertville’s debt service levy would be one of the highest in the state.
“That’s just a necessary fact that has occurred because you have been a rapidly growing district for many years,” Sutter said. “You needed to build schools to accommodate those kids, and you don’t have the biggest tax base around you, primarily residential at 69 percent of your tax capacity.
You don’t have the commercial and industrial property that some other districts have,” he added. “That may come, and that will help because those people will help pay the taxes.”
Upcoming meetings
Foucault announced two upcoming dates for informational meetings about the bond. Those dates are Dec. 14 at the Middle School West auditorium and Jan. 19 at the high school’s Performing Arts Center.