Red plan could bypass referendum

The $257 million price tag on the Duluth school district's red consolidation plan would be partially paid for with increased property taxes, but taxpayers might not get the chance to vote on it.

The $257 million price tag on the Duluth school district's red consolidation plan would be partially paid for with increased property taxes, but taxpayers might not get the chance to vote on it.

Along with voting on the adoption of the red plan Tuesday, School Board members will be asked to decide whether they will put the project up for a referendum.

If they decide against a referendum, it would be the biggest construction project in the district's recent history to be financed without a public vote.

Relying on a recent scientific study that found 71 percent of respondents across the district to be indifferent about a vote, Superintendent Keith Dixon is urging board members to skip it and move ahead with construction. But some board members are concerned that circumventing a referendum on such a large project could hurt the district's relationship with the public.

The red plan calls for closing several schools across grade levels and consolidating the district into two high schools, two middle schools and nine elementary schools. All of the remaining buildings would be new or like new.


If all the operational savings gained from closing schools are directed back into the project, the owner of a $125,000 home in the district would see a property tax increase of about $9.50 a month.

"I can't think of anything bigger ever happening in Duluth, even when they were building new schools when Duluth was organized, given the dollars today and the dollars back then," said Kerry Leider, property and risk manager for the Duluth district.

According to representatives from Johnson Controls, the district has the legal authority to proceed without a referendum under Minnesota statutes.

Those statutes have been used to finance smaller projects in the district without a vote, such as deferred maintenance projects ranging in cost from $2.2 million to $2.7 million annually, said Mike David, account executive for Johnson Controls.

The $6.5 million Secondary Technical Center was financed without a vote, Leider said.

An alternative facilities bonding and levy statute would be used to cover deferred maintenance costs and health and safety issues associated with the red plan, such as roof repairs. Another statute, allowed for use only by districts with plans for the elimination of segregation -- such as Minneapolis, St. Paul and Duluth -- would help cover new construction costs. Operational savings from the closure of schools would also go toward new construction. New properties would be purchased with the revenue gained from the sale of surplus properties.

"We are not using anything the district has not used before," David said. "They just haven't done a project of this magnitude where they combined all these elements together."

'happening more and more'


Judy Marks, associate director of the National Clearinghouse for Educational Facilities in Washington, D.C., said school districts across the country are trying to find new ways to finance construction.

"It's happening more and more; the overwhelming need to move ahead with these projects is pushing districts to find many, many different ways to finance them," Marks said.

"One year you think you have enough to build a school, but two years later with increased labor and building costs, you might not," she said.

That is part of the reason Dixon is hoping the board will proceed without a vote. The referendum would push back the biggest window for construction from the summer of 2008 to the summer of 2009, David said. That could mean an extra $10 million to $15 million in construction costs.

"Time is money," Dixon said. "If we really wanted this done effectively and efficiently, we should have done it 10 years ago; every day counts."

Its important to consider the effect skipping a referendum could have on the community, said Tom Melcher, director of program finance for the Minnesota Department of Education. "There are some issues that a district would want to weigh in on, not only what they can do legally but what they can do to have a positive relationship with the community so they can get approval for other things that may come down the road," he said.

That is one of board member Tim Grover's concerns. The district's operating levy is set to expire at the end of 2008, and the district will be looking to renew it with public approval.

"If people are frustrated that we don't give them a chance to vote on this thing they could carry it to the ballot box in November of 2008 and take out their frustration and anger at that point. We would be in big trouble without that operating levy," Grover said.


Even without the levy, Grover said the community deserves a chance to vote on such a far-reaching project.

"This is a major expenditure that will have a long term impact on all the tax payers in Duluth, and I think they should have the opportunity to express themselves at the ballot box," he said.

Board members Laura Condon and Mike Akervik have also expressed concern about skipping a referendum.

Dixon acknowledged those concerns, but said putting off construction also could disrupt the relationship with the public.

"This is a very difficult and emotional issue for a community," Dixon said. "I personally don't want to see this drag on for a long period of time and continue to tear up this community. Let's figure out a way to get this done so we can start bringing everyone back together to start working on implementation."

Board members Anne Wasson, Tom Husted and Mary Cameron say they support moving forward without a referendum. Member Nancy Nilsen said she is undecided.

If the board votes Tuesday to proceed without the referendum, the financing package will be presented for approval by Education Commissioner Alice Seagren.

SARAH HORNER covers K-12 education. She can be reached weekdays at (218) 723-5342 or by e-mail at .

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