December 5, 2014 at 4:00 PM - Superintendent's Weekly Update to the Board of Education

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In Bowlus on Wednesday we were asked by someone in the public what our Plan B is if this doesn't pass.  Mary and I are preparing some thoughts on what that could look like.  We need some additional information from Springsted.  Below is an email we sent Don and Stacy.

Hi Stacy, as we looked at tax impacts a while back, we talked about how we would accomplish some of the deferred maintenance items and address the enrollment growth needs in our district.  Some of the items that we have planned in our project could be done using either Health and Safety funds or lease levy to add square footage.  We have the following questions:

1)  We understand we could use lease levy to add up to 20% of our current square footage to our buildings.  According MDE’s information on the building age and square footage system, we have 187,824 square feet district wide.  20% of that is 37,565 square feet.  Is that the correct way to calculate the amount we could potentially add?

2)  If we were to add square footage with lease levy, does it have to be distributed as 20% to each site, or is that district wide to add the square footage where we need it?

3)  If I use just a percentage for the total project and calculate a cost per square footage, I come up with a total cost of $256 per square foot, or a total project of $9,616,640.  What would be the tax impact if we used lease levy for a project of that amount?  How many years would taxpayers pay, and at what cost?

4)  We have identified 5 items at an estimated cost of $990,000 that could be done with Health and Safety funds (see attached).  Would each of these need to be done on a pay-as-you go basis, or could they be combined as one large payment over the course of several years?  What would the tax impact of that be, and for how long?

We’d like to see both new construction and health and safety tax impact separately.

At some of the community meetings, we have been asked what plan b is if this doesn't pass.  The message we’d like to get across is that ALL items in the plan are important, and some of them absolutely NEED to happen.  With an election and bond issue, there are state funds that will pay for part of this project.  But with board action through lease and health and safety levies, the cost would be 100% local taxes.

We don’t know at this point what exactly the action will be if it doesn't pass, but we want to have the information and tax impacts for other scenarios available.

Thank you for all your help with our questions!

Description: 
You have noticed in your "Proposed Taxes 2015" statement an increase to the "Other Local Levies" for SD 0485 Royalton.  Please know approximately 80% of that increase is the $424 the state approved for all school districts during the last legislative session.  The board approved $300 was an increase last year and is not reflected in this new year increase.

Important Information to Know

1.  The board approved $300/pupil levy is now generating $282,300/year for the Royalton School District.  This $300/pupil is in the First Tier and 67.11% of the $282,300/year is coming from the state.  The remainder is local levy.  The state is paying $2 for every $1 by local taxpayers.
2.  The state provided all school districts an additional $424/pupil during the last legislative session.  An additional $398,984 will be generated in the new tax increases.  The $424/pupil is in the Second Tier and 43.25% of the $398,984/year is coming from the state.  The remainder will be new local levy - seen in the statements that came out last week.

State Aid Ratio for Royalton Schools
First Tier 67.11% ($300/pupil)
Second Tier 43.25% ($424/pupil)
Third Tier   0.20%

***NOTE:  The percent (%) of dollars varies by school district.  Some districts with lots of tax base receive no equalization aid - the percentages (%).

Amount Per Pupil Total Dollars
Location Equity Authorization     $424.00 $398,984
Current Referendum Authorization $300.00 $282,300
New Referendum Authorization $724.00 $681,284

State Aid $363,017
Local Levy $319,267
$681,284

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In Column "H" of the attached file you will see how many operating levy dollars each school district in the state will receive in FY2016.  There are only a few districts that have chosen to take less than the available $724/pupil.  And then there are some districts whose voters have approved MUCH more - anything above the $724/pupil.

I realize Royalton School District accepting the $424/pupil will not be easy to communicate with our building bond vote on January 6.  We could have waited until next year after a voter approved building levy.  BUT then this would be incredibly dishonest with our public taxpayers.

The frustration I have is good old fashion politics.  The state elected officials approved the $300/pupil and $424/pupil knowing ALL school districts needed these operating dollars after 10 years of reduced funding.  And some school communities like Royalton would not pass operating levies to fill in the need.   

Instead of the state just adding the total $724/pupil to the general education aid formula they're requiring local property taxes to be raised too.  That way our state legislatures and Governor can say they're not increasing our state income taxes too high.  

Authority to tax with some equalization aid support (i.e., 67.11% on $300/pupil and 43.25% on $424/pupil) is definitely better than nothing, but it's still political play that is NOT good timing for our facility needs. 

    

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Please see attached the weekly bills for your approval.