Kelliher School District hopes to pass one-day bond sale
The Kelliher School District #36 hopes to pass a one day bond that is on the primary ballot Aug. 10. The bond would allow $495,000 of levied taxes to remain in the district.
To fund the K-12 building opened in the fall of 1997, Kelliher took out a capital loan through the state of Minnesota for $6,900,000 in addition to issuing general obligation bonds for $2,100,000.
The state of Minnesota required the district to charge a set property tax rate (currently set at 28 percent) to pay the annual principal and interest on the bonds, with any excess to be paid against the loan and its interest -- the balance of which was $13,116,951.97 as of December 2009.
As property values increased in the following years and the tax rate remained the same, more money was raised than needed to pay the principal and interest on the bonds. It is those excess funds the district wants to keep with the sale of a one day bond.
Without a special bond sale, the levied funds would be returned to the state. By selling a one day bond, the school district transfers the funds from an account solely used to pay against the loan to a general building account before the funds are returned.
"Not every school district has an opportunity to issue these one day bonds, so we are grateful for the opportunity this offers us," said Kelliher School Superintendent Tim Lutz. "We hope our district patrons agree and show their support by voting to pass the one-day bond referendum."
Lutz said that if the one day bond passes, part of the money would be used to cover the cost of roof repairs that school maintenance workers have predicted would be needed in the near future.
He added, "Another benefit of the one-day bond is that the money we receive allows us to provide for our students without raising local taxes."
The district plans to mail a letter to all district patrons at the end of July. The letter will explain the one day bond and will answer questions regarding the issue. In the letter, the district will explain that voting yes or no on the question of whether or not to authorize the school district to sell bonds will have no impact whatsoever on the tax levy. The only impact is whether or not the district keeps the excess money for its own use or must send it to the state.
Kelliher is one of 21 districts within the state's 341 districts with a capital loan. Every one of the more than 20 one day bonds that have been voted on in the past five years in Minnesota has passed.
If district patrons have questions regarding the one day bond, they may call the school at 218-647-8286 to speak with Business Manager Laura Nelson or Superintendent Lutz.