Bond referendum needs a closer look
By Zach Gordon, Elbow Lake, MN Save Our Community Schools committee After reading the Echo Press article on the upcoming WCA bond referendum vote, a committee from our group called Save Our Community Schools (SOCS) feels that readers and the voters at large should have more information than previously provided.
The school board has not done a good job of explaining that their proposal on a $100,000 home will result in increased overall taxes by much more than the published 22 cents. This published increase is what they will be paying over current taxes, but does not factor in the several hundred dollars in savings they would see if this vote fails. As payments to the current school bond will be ending in the next four months, district voters should witness a large tax savings.
The debt service from the old bond to the new bond is nearly doubled, taking it from about $480,000 to nearly $1 million a year. This significantly erodes the $657,000 in operating savings the school board claims.
Although the bond is for $12.225 million, the construction portion is allocated for only $12 million. The other $225,000 will be going to the bonding company. This same company helped with financial projections, which could be a conflict of interest. A similar bond is being proposed for the McCray area schools as well, and an independent contracting firm the community hired (one with nothing to gain with a yes or no vote) has evaluated the situation, stating that the costs estimated by the board-funded study were inflated by almost 50 percent.
Another very important aspect glossed over is the effect the loss of students will have on any projected savings. The school board has admitted they will most likely lose around 40 students, but another nearby district lost over 100 students when they consolidated schools. At almost $7,000 per student, we could potentially lose $278,000 to $697,000 in revenue, which would be another big bite out of any estimated savings.
The proposed bond will leave the communities with two large empty buildings. The chances are very low for these buildings to be sold and repurposed. Both communities already have large empty commercial property. Eventually these buildings will need to be torn down and the cost, estimated at about $2 million, is not addressed anywhere by the school board. This means they will have to ask for more money, and increase taxes more than they are currently reporting.
Yet another point to highlight is that 70 percent of this referendum will be paid for by our local agriculture families and businesses. In our area, the average agricultural acre sells for around $5,000, and its tax value is higher. On a $1.6 million, 320 acre farm, the taxes will be going up by over $1,700 per year. Since many farmers own a section (640 acres) of land, this amount can be doubled very easily, which results in a very heavy tax burden that is not being discussed.
If you take into account the possible inflation of construction costs, increased debt service, reduction to student population, and reduction in staff, voting to build a new school becomes a very expensive endeavor. The school board has put forward this vote under a set of assumptions that may very well be off base. One of these assumptions is a 2 percent compounding increase in expenses. If you compare that to historical school financial reports, the assumption doesn’t seem to stand up. For the past five to 10 years, the school has experienced an increase in expenses of about 1.4 percent on average, with an increase in revenue at 1.9 percent. This is what has helped increase the general fund to $1.7 million.
The picture being painted by the school board may seem pretty at first, but under closer scrutiny, it may not look the same. Please support Kensington and Elbow Lake schools and our communities. You can contact us at SOCSWCA@gmail.com with questions.