Unbudgeted school projects could lead to borrowing
The Duluth school district doesn't have the money to replace rubber playground mulch and renovate the former Rockridge Elementary school this year.
That could mean borrowing up to $4.3 million to ensure both unbudgeted projects are completed.
That amount would pay for Rockridge and a large chunk of planned improvements to district buildings, including projects at Historic Old Central High School and Myers-Wilkins Elementary. With those costs taken care of, money meant for this year's capital improvements could pay for the mulch project.
Superintendent Bill Gronseth will recommend the Duluth School Board move forward with borrowing money.
"The work at Rockridge is important and necessary, and it's better to do the work all at once," he said Thursday.
A special meeting to discuss issuing bonds is expected to be held at the end of the month.
Renovations to Lakeside's Rockridge school to house Woodland Hills Academy — the school for clients of The Hills Youth and Family Services — are estimated to cost at least $3 million, with about $600,000 of that currently budgeted to come from the general fund. That amount is built into the $2.3 million deficit the district faces, and if it's borrowed instead, this year's deficit would decrease.
The academy is to be moved because its outdated building doesn't suit the needs of its students, and The Hills has asked the Duluth school district for a new site. The district receives state aid to educate those students, leasing space from The Hills to do so. Moving classes to Rockridge would mean an end to the lease agreement, as the district already owns the building.
The lowest bid received to replace the controversial rubber mulch at 10 district playgrounds was about $1.2 million, spread over three years. Board members said this week they wanted the project done as soon as possible and asked for ways to make it cheaper. The district is exploring ways to change the project to do that, Gronseth said. The board votes Tuesday on the bid.
How the board responds to that measure will "critically" impact the money available for Rockridge and other building repairs, said Doug Hasler, business services manager for the district.
Without bonding, not everything can be done this year, he said.
Rubber tire mulch is slated to be replaced following months of advocacy from parents, who have cited concerns about the potential toxicity of the material. A concern nationwide, federal agencies are studying its effects.
Bonding for the entire amount of renovations would mean money wouldn't need to be pulled from the already-stressed general fund. It would mean nearly $300,000 in interest and fees for five-year bonds and about $540,000 for 10-year bonds, some of which would affect the general fund and the ability to do other building maintenance.
Hasler said borrowing wouldn't necessarily lead to increased taxes. Interest could either be absorbed by the district, or the board could choose to levy most of it.
The board Monday was presented with five- and 10-year bonding options, and the amount borrowed depends on how the board votes to proceed.