About 20 local officials, civic leaders, and community-minded citizens turned out for the bimonthly Tri-City Planning Group last Wednesday evening at the Village Hall. On the agenda was a discussion of the upcoming school facilities referendum, and financial consultant Mike Bubany was on hand, along with R-P Schools Superintendant Chuck Ehler and School Board Chair John Linder.
The meeting opened with a presentation of updated financial projections by Bubany. Despite the game-changing debt equalization act, Bubany’s numbers remained about what they were when he first calculated them for the 2012 facilities referendum. Then, Bubany estimated that the community would be potentially willing and able to carry about $15 million to build an EC-5 facility—assuming no assistance from the state. Today, that’s still roughly the amount the community will have to bear, but the difference now is that the state is chipping in more than twice that amount in debt equalization money, allowing Rushford to build the new EC-12 facility that district task forces have recommended but citizens have said they cannot afford.
“When people were saying their taxes would go up by such-and-such, that number is still the number, but the good news now is that you’re getting twice the school for it,” said Bubany. Those numbers remain estimates as interest rates cannot be locked in until building plans are finalized, but a general picture is coming into focus.
By Bubany’s estimates, which he cross-referenced for accuracy against numbers provided by the district’s accounting firm, Ehlers and Associates, a residential property with a value of $125,000 will see about a $271 increase in their taxes. Agricultural land will see a tax increase of about $10/acre assuming a $4,000/acre value. A commercial property of $1,000,000 would see an increase of about $5,000.
“There’s no creative way to finance this school so that you’re not going to feel it,” said Bubany, summing up an answer to a question that was likely on the minds of more than a few people in attendance. As sobering as that information might be, it has to be considered in the context of the opportunity the debt equalization act presents for the R-P district, said Superintendent Ehler.
“We went to the legislature asking for $20 million, and when all is said and done we’re getting closer to $30 million,” said Ehler. Despite the complex legislative wrangling and calculations that went into the debt equalization act, the upshot is simple: Should the referendum be successful, the school will be on the hook for about a $2.8 million yearly bond payment. Of that total, $1.2 million will come from the district tax levy. The remaining $1.6 million will be kicked in by the state.
After financial information was presented, Ehler, along with board chair John Linder, reiterated the reasoning behind the school board’s majority position to support the construction of a new EC-12 facility.
“We’ve had two facilities task forces within the last four years and both of them came out with the same conclusion. You might be able to do the basics for $8 million. But when you look at what really needs to be done, your costs are going to be between $18 and $25 million, and there is no debt equalization for those costs,” said Ehler. “After they looked at the investment it would take to bring our current facilities up to standards, they felt it was advantageous for the district to seriously look at a new school.”
In other words, remodeling the old buildings—a project that would not be eligible for state aid—would cost almost as much as allowing the state to assist in building totally new facilities. “When you look at it that way, this is probably the best scenario we can bring forward to our citizens,” said Ehler.
Responding to a question raised by Village Mayor Gordon Johnson, Ehler also took a moment to address a worry recently voiced in the community.
“We’re dealing with what you might call a ‘fear factor’ within our community,” said Ehler. “The fear is that the legislature passed the debt equalization act to influence the vote so that communities within our school district will approve the referendum, and then a year down the road the legislature will withdraw their funding.”
While admitting anything is possible in the world of politics, Ehler went on to say that withdrawing funding would be reneging on commitments the state has made with both the R-P and Moose Lake school districts, and the districts’ legislative partners have assured those districts of their funding.
“We’re not the only school district that gets debt equalization. All the schools that went out this spring and passed their referendums get debt equalization. The nice thing for Rushford-Peterson and Moose Lake is that we’re getting three times the normal rate of debt equalization,” said Ehler
Hammering home just what that means, Ehler went on to point out that under normal circumstances the district would be eligible for about $8 million. But because act includes provisions for communities that were hit by natural disasters, the R-P district, along with Moose Lake, stands to receive much more.
“Right now your net gain is going to be over $30 million,” said Ehler. “That’s something that we want our community to understand: You probably have the sweetest deal of any school district in the state.”
Questions remain about the future of the current buildings should a referendum pass, and Ehler and Linder stressed that uncertainly in that area is going to be something the community might have to accept for a short time, while stressing that the board is committed to finding a positive way to repurpose the buildings—and Ehler noted, contrary to some rumors, that there are no plans for demolition.
“People want us to come up with a solution to the issue of what to do with the buildings, but we as a board don’t want to dictate a plan to either community. These buildings are a community resource, we want our communities to view them as such, and it shouldn’t fall on the board’s shoulders alone to make a plan for them,” said Ehler.
While no one made any concrete suggestions for the future of the current buildings, Bubany noted similar cases where grant money and tax breaks were used rehab historic buildings, suggesting there are many ways to breathe new life into old but, for many, well-loved landmarks.
“We don’t have all the answers,” added board chair John Linder. “The school district certainly doesn’t have the money to redevelop all of these properties, so this is going to take some leadership from the communities, as well. I can think of many purposes for the buildings, but it’s going to take more than a couple of months to put together a long term plan of how we’re going to work this, and I hope most people would understand that,” said Linder.
“One of the phrases that was shared with is us is ‘Maybe now is not the time,’” said Ehler in closing. “I don’t have a crystal ball, but construction costs, on average, will increase 3.5 to 4 percent every year. So if you say now isn’t the time, do the math. Let’s say construction costs will raise only 3 percent. Even after state aid, that’s a $400,000 increase in construction costs per year. So if now is not the time, I would ask when else it would be.
“When they built that building in 1906, there were sacrifices made. They put an addition on in 1936. There was a depression going on then. Those people made sacrifices back then. We’re not oblivious to the fact that there are fixed-income citizens within our district, and many students on free and reduced lunch. But we’re also saying that to make this school district sustainable, and to ultimately to make this community sustainable, we need to do something, and I hope people would get on board and help us take advantage of the opportunity that is before us.”