Number crunching: Officials look to build additional school space without raising taxes
BEMIDJI — A new building. No additional dollars.
The district plans to do so without seeking additional dollars.
How is that possible?
In 1998, the district took out $48 million in 20-year bonds to construct Lincoln Elementary and Bemidji High School. Initially, the annual payment was slightly more than $3.9 million.
“That’s what we levy against local property taxes in order to pay each year of interest and principal on that bond,” explained Chris Leinen, director of business services.
The annual payments have reduced some over the years, due to refinancing with lower interest rates in 2005 and 2013.
The final payment, to come in 2019, will be just under $3.25 million.
The idea, then, is that if the school district does seek — and gains — voter approval for a construction project, the financial plan would be developed to keep local taxes at or below the amount they are now in relation to those previous bonds.
A bond could be taken out in 2016, and include monies in it that would be utilized to pay the initial capitalized interest for four years.
Then, when the district must start paying interest and principal, it will then have paid the final 2019 payment on the previous construction bonds.
The new bond payments would be planned to stay at, or below, the earlier bond payments so the district would not need additional tax dollars over the level they are at now.
“(The $3.2 million) amount goes away because that’s the last payment, and the (new bond payment) takes its place,” Leinen said. “It’s flat, a zero increase in taxes.”
Why not Deer Lake?
Leinen acknowledged that a legitimate argument could be made that taxes — upon completion of the payments for old construction — should decrease as those payments go away.
But it wouldn’t solve the district’s overcrowding and facilities needs.
Neither would reopening Deer Lake Elementary, leaders stress.
The argument, often voiced during the debate surrounding the then-defeated 2011 referendum question, just doesn’t make sense, administrators say.
For one, Deer Lake — a single-section school — even at its highest capacity would only hold 170 students, which is far below what the district needs.
“It only solves part of the problem; it doesn’t solve the whole problem,” Leinen said. “We’re looking at needing space for probably 300 to 600 kids in the next five to seven years.”
Compounding that would be up to $500,000 needed to retrofit the facility so it could even open and the additional pain of having realign boundaries to fill the school, which would result in busing students up to a hour to Deer Lake when they now are bused about 10 minutes to reach current schools.
“It was built in the wrong place unfortunately,” Leinen said.
What happens next?
Many decisions remain. The School Board has not officially voted to seek money for a new building.
While the emphasis of discussion during Monday’s school board work session centered on that possibility, it also could opt to seek dollars to simply add onto existing schools.
“There’s going to be issues out there … and those have to get worked through and public involvement is important,” Leinen said.
The School Board has a history of engaging the public on such matters, officials said.
“The process takes a little while and it obviously, with something like this, there’s a vote of the people,” Leinen said. “They want the people to speak to them as to what their preferences are.”
While the School Board does not take action during work sessions, it did make clear that it prefers that any vote of the people be done during a general election, versus an off-year election.
The next general election is Nov. 4. If the district opts to seek voter approval, Leinen said the School Board would have to approve the ballot question or questions by Aug. 22.