Financial questions on Montevideo, Minnesota, voters' minds at school referendum meeting

Tom Cherveny, West Central Tribune, Willmar, Minn.
·4 min read

Oct. 24—MONTEVIDEO

— Are there assurances that a new school project will stay within budget?

Can voters be guaranteed that the state of Minnesota will continue to pay 41 percent of the bond debt over its 20-year term?

These are among the questions posed by voters in the

Montevideo Public Schools district

as Superintendent Wade McKittrick and project consultants conducted a bonding proposal information session Oct. 17 at the Montevideo Community Center.

With more than 40 people present, it was among the best attended of the sessions the district is holding in advance of the Nov. 7 referendum.

Voters will decide whether to approve a $49,975,000 bond issue to address academic facilities needs. They will also decide on a second issue on the ballot. It asks voters to approve $11,335,000 bonding for a new fine arts center, and is dependent on the first question's approval.

The superintendent and Matt Wolfert, project architect with Bray Architects, and Matthew Hammer, financial consultant with Ehlers and Associates, heard comments both supporting the project as well as raising questions about it.

Not surprisingly, financial questions were top of mind. If the voters approve a nearly $50 million bond, that is the maximum amount of money the school can invest in the project, even if bids for construction exceed that amount, according to the school representatives.

Wolfert said the district would have to pare the project and make whatever changes needed to keep the project within the $49.975 million bond limit. "We cannot borrow more than that dollar amount," he explained.

He said the plans for the project expect inflation in costs, and that the budget also has a 5 percent contingency fund for the unexpected. He said the inflation rate in construction has stabilized. It's currently more in the range of 5 to 7 percent a year, as compared to rates of 10 to 15 percent in recent years.

The district calculates that the state's Ag2School and other agricultural credits will be responsible for 41 percent of the overall debt.

The state's

Ag2School tax credit

reduces the tax burden on agricultural lands by way of a state reimbursement to the district.

Wolfert and Hammer said they cannot "guarantee" that the state will not eliminate the support with the "swipe of a pen," as one meeting attendee said he feared.

However, Hammer said the Ag2School credit was approved by the Legislature on a bipartisan basis and recognizes that there has not been equity in property taxes between urban and rural areas. Hammer said experience shows that the Legislature always grandfathers in existing laws when changes are made, which would protect Montevideo voters.

The financial consultant also expressed doubts that the Legislature would eliminate or reduce the credit. The movement has been toward improving the credit for rural areas. He suggested that elected officer holders would be reluctant to eliminate a credit — and thus significantly raise taxes to the ire of voters.

Along with the questions, the school representatives heard support for the project as being needed to improve education and retain and recruit educators.

McKittrick said the district is seeing its enrollment grow, with most grades now counting over 100 students. Overall enrollment in K-12 is currently 1,372.

The academic project calls for remodeling the current Middle School to hold grades K-4. The Sanford and Ramsey Elementary Schools will be razed. The current high school will be redeveloped for use as a grades 5-8 middle school. An addition will be built to the north of the high school to serve as a new 9-12 high school.

While the new middle school and high school will share a roof, the buildings will be separated, according to Wolfert.

The fine arts center will be built on the middle and high school campus and attached to the buildings. Infrastructure to serve the center will be built as part of the proposed new high school construction.

The new plan places the Career, Technology and Engineering programs in the current band and choir area to provide more visibility to them.

Voters rejected a $54.8 million bond in a May referendum by a 23-vote margin, 872-895. The superintendent said the new plan is similar to the earlier version, but its footprint has been downsized in recognition of voter concerns about cost.