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District 518 referendum proposal dominates work session discussion

WORTHINGTON -- In a special District 518 Board of Education work session Tuesday, district administrators, board members and board candidates addressed what Superintendent John Landgaard considered "four boulders": the district's space issues, Tr...

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District 518 administrators, current board of education members and board candidates confer during a work session Tuesday evening at Worthington High School. (Alyssa Sobotka / The Globe)

WORTHINGTON - In a special District 518 Board of Education work session Tuesday, district administrators, board members and board candidates addressed what Superintendent John Landgaard considered “four boulders”: the district’s space issues, Trojan Field, Community Education and soccer fields.

Perhaps unsurprisingly, the next plan to present to voters in an effort to address space issues dominated the session’s approximately one-and-a-half-hour deliberation.

Although the board could take no formal action, the work session’s participants appeared to reach a consensus to have Landgaard begin preparing a one-question, $32 million February bond referendum for a new intermediate school.

At that amount, the district would commit approximately $5.8 million from its own reserves. Landgaard reported that the estimate to complete an intermediate school project similar to that of what was proposed in the last referendum has increased, particularly due to increased interest rates. The project is now estimated at $37.8 million, an increase from the estimated $36.4 project declined by voters in August.

One primary discussion participants had was identifying what amount of the district’s own funding it could contribute to the project while still maintaining a balance comfortable enough for day-to-day operating costs.

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“How much more meat can this school board put into this referendum?” said board candidate Tom Prins.

“The school district seems to have an abundant amount of money,” said board candidate Don Brink, who also wanted a higher contribution from the district, adding that he’d like to see a $30 million proposal.

According to Landgaard, as of the last finalized audit from June 2017, the district had approximately $8.5 million in its assigned account and just under $10 million in its general fund.

“That looks, at this point, that it will go up,” said Landgaard, adding that - without having seen the more recent audit - he could comfortably estimate it increasing to $12.5 million. He said the board could comfortably commit $6 million to the intermediate school project.

Board Clerk Joel Lorenz, who recommended a $31.5 million proposal, advocated getting the ball rolling again, even if it meant the district committed more money toward the project.

“Maybe we’ll be a little tight for a year or two, but we need to get a facility out there,” he said.

Member Linden Olson recommended a higher bond proposal (and less district commitment) - between $32 and $34 million - calling the district’s use of its fund balance to pay for facilities a “big gift to our farmers.”

“Because they’re not having to pay for it on the bond referendum, they’re only having to pay for it on the house, garage and one acre, so we’ve already given them a huge amount,” he said, also citing recent under-levying.

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Board Treasurer Brad Shaffer and Vice Chair Scott Rosenberg also were cautious to offer support of commitment of a significant amount of district funds. Shaffer called retaining the funds necessary to operate 10 to 12 weeks in advance “good business sense.” Rosenberg posed the question of making the intermediate school the district’s only priority while letting other projects “slide and drop” for a number of years.

Shaffer expressed other concerns about sending another proposal to voters in February, including what he termed “voter fatigue” and concerns “above and beyond” an agreeable dollar figure proposal.

“I think the crop this year is questionable,” he said. “If we get bad weather again and difficulty with harvest, there’s going to be some people on edge about approving a bond.”

Board hopeful Rob Carstensen said his main concern in not moving forward immediately is the threat of rising interest rates.

Work session participants also vastly supported making total renovations - estimated at $4 million - to Trojan Field through use of the district’s long-term facility maintenance and reserve funds.

Board member Mike Harberts - who stressed that he supports the upgrades - cautioned beginning the project before classroom space issues are resolved, even though it would be funded internally.

“I think that sends the wrong message,” he said.

However, suggested Prins, a district commitment of approximately $6 million to an intermediate school combined with $4 million to Trojan Field could help result in a positive vote, should the district decide to commit those funds.

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Work session participants also grappled with whether or not to under levy from its maximum authority, which was preliminarily authorized in September pending possible adjustments for final approval in December.  

According to Landgaard, the board has under levied more than $3 million in recent years by reducing $1 million from its maximum authority at this time last year and by committing to pay off early more than $2 million in bond debt.

That action may have unintended consequences, participants acknowledged, particularly in relation to public perception as the preliminary tax statements - although skewed - will indicate the district’s levy increase by 25 percent from last year’s.

Landgaard said it’s ideal to remain steady, but eventually the board needs to get to a point where it does not under levy.

“But you as a board need to decide when you need to bite the bullet on that,” he said.

Pertaining to earlier discussions about committing funds for an intermediate school and Trojan Field projects, some board members were hesitant to under levy.

“It’s hard to under levy when we’re using fund balance for this,” Rosenberg said. “But it’s also bad timing with a February referendum and not cutting it.”

Lorenz said he didn’t favor information that will show a 25 percent tax increase will be disseminated soon before the district likely asks voters to consider another bond proposal.

“I’d like to bite it for one more year and under levy,” Lorenz said, adding that decision is from a more political standpoint.

Board member Steve Schnieder said the board has tried that before, thinking taxpayers would appreciate the board under levying.

“But it doesn’t seem to make a bit of difference,” he said.  

Adam Blume was the only board candidate not in attendance at Tuesday’s work session.

The board also had its regular board meeting Tuesday, during which it:

  • Heard a presentation by Worthington High School Assistant Principal Tony Hastings and Worthington Middle School Assistant Principal Brett Perish about a two-day ALICE training in June at Luverne High School that was attended by representatives from District 518 and the Worthington Police Department. Hastings and Parrish discussed the district’s future implementation process of ALICE (Alert, Lockdown, Inform, Counter and Evacuate) in an effort to prepare all staff for a crisis situation they said will hopefully never occur. Landgaard said necessary costs to properly train staff in ALICE techniques is estimated at $6,800, which would come from staff development funding.
  • Approved a tax abatement request made by Nate Grimmius for property located at lot three, block one in Homewood Hills 11th addition in Worthington.
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