Will my taxes really be 29% higher?
No your taxes will not be 29% higher as reported by WCPC. The district is using a process called “wrap” financing in that it allows for debt to be consolidated and paid as one debt versus having two debt payments. You basically are resetting the debt of the district at a new yearly payment at a specific level and the WCPC has left out the current debt to express that your taxes are going up 29% more when in reality the district is already collecting and paying this debt. The amount levied from 2018 through 2042 will be approximately $5 million to $5.36 million dollars (this includes Prairie debt and new debt until 2024), after 2024 the payments will be for the new High School and other facilities defined in the ballot question. As you can see this is not a 29% increase and can be shown if you access the tax calculator on the district web site to determine the estimated real impact for you.
Is the student capacity for the new High School enough for the future?
Based on a great deal of discussion and planning the district believes that the enrollment needs will be addressed well into the future with an 1,100 student design capacity. Unlike elementary buildings, High School students travel throughout the building from class to class in a given day. Many of these classroom spaces are specialized such as labs, shops, and other customized spaces which may typically be used every hour of every day. With that stated, a space utilization factor is established based on scheduled usage of each individual space in a building. Capacity can be altered and varied by implementing different schedules and/or through strategic use of various spaces within the building. In fact, we have implemented such methods within our existing high school just to meet the current needs. The new high school facility would be designed and configured in such a way that future utilization and expansion for increased future enrollment is easily accomplished.
Are we building everything designated on the site map?
No. The current intent was to complete a site map that showed future facility needs, but were included as place holders such as a future hockey arena, future pool area, future soccer fields, future baseball fields, future softball fields and so on. The ballot questions is specific to what is included in the project and should be read entirely in order to identify what is included. The intent is to complete all site work shown on the concept diagram except for the south most fields that were labeled “potential fields”. It is important to note that the final number, type and configuration of the other grass fields depicted on the concept drawing was in fact a concept. As the design phase progresses after the referendum, the actual field counts, types, and locations will be developed. Mass grading and earthwork will be required for development of the new high school and surrounding site. For this reason, development of grass practice type fields as shown may appear to be a large undertaking covering much of the site, but it is actually a very minor element of the overall site work because grading, earthwork, and seeding, etc. will be required anyway.
So, what is WCPC claim about in regards to pension liability?
The Worthington School District 518 along with all other school districts are now responsible to include pension liabilities as a part of the annual audit due to Governmental Accounting Standards Board (GASB) and it also includes other governmental entities. This new requirement takes the reporting out of the pension’s audit and moves it to governmental entities in which all entities contribute on an annual basis to meet this liability. The District’s auditor states this as follow;
“The Governmental Accounting Standards Board (GASB) issues a Statement No. 68, Accounting and Financial Reporting for Pensions, and mandated the reporting requirements for audits with fiscal years ended June 30, 2015, and thereafter. School Districts in cost sharing multiple employer plans (TRA and CERF) now have to report a projected future actuarial liability, but the required contributions are not based on an actuarial calculation of pension benefits earned, but rather on the rates determined by current statutory requirements. Statement 68 requires school districts to more comprehensively and comparably measure the annual costs of pension benefits,” states Wayne W. Drealan, CPA of Drealan, Kvihaug, Hoefker & Co., P. A.
Ultimately, DON’T let this tactic confuse you – GO to the District website to get the real answers to your questions. Further information is provided to help you understand this item.
Additional Explanation of this item:
What is GASB?
GSAB is an independent, non-profit, non-governmental regulatory body charged with setting authoritative standards of accounting.
When do the new standards go into effect?
GASB Statement 67, which replaces the requirements of Statement No. 25, Financial Reporting for Defined Benefits Pension Plans.
GASB Statement 68 replaces the requirements of Statement No. 27 Accounting for Pensions by State and Local Governmental Entities for their 2015 financial statements. GASB 27 is effective for fiscal years beginning after June 15, 2014.
What’s new in the GASB rules?
PERA’s plans are multiple-employer cost sharing plans. Each employer will be required to include proportionate share of the “net pension” proportionate share of each plan’s pension expense and deferred inflows of resources and deferred outflows of resouces will be requirements and required supplementary information schedules in their financials. Finallly, employer contributions to PERA will no longer be included in pension reports.
Will these changes affect the amount of contributions sent to PERA?
No. Although GASB 58 requires that each employer’s proportionate share of PERA’s net pension liability (unfunded liability) be shown to change contribution rates. The net pension liability is unlike any of the other liabilities reported on an employer’s balance sheet, in the pension liability from their financial statements.
Will employers have to pay more for pension because of the new standards?
No. the new GASB statements do not affect the amount employers will ultimately pay to fund the pensions. They only change how pension liability is reported.
The only change is how costs are reported
It is important to note that these new GASB rules apply only to accounting and financial reporting. The do not apply to future liabilities providing pension benefits will not change… the only thing that changes is where and how pension costs are accounted for in audits.
Note: This information can be found on the PERA pension’s website.
If you would have further questions regarding this claim, please feel free to contact the District Office and we would be happy to explain the change to accounting practices. Remember we are required to provide factual information.
What needs to be considered in adding on to current buildings?
The district has considered the plan to add on to other buildings, but the cost to do so in an apple to apples comparison is estimated at $61 million (does include stadium and practice fields). The better long-term solution was determined to construct a new high school on a different site. A few of the considerations that entered this discussion were the following:
1. Campus Size – by 2025 the enrollment will be approaching 4,000 students (currently 3,100+) and to spread the locations out in the community makes sense versus congestion at three locations.
2. Core spaces – many of the support spaces like the cafeterias, gyms, hallways, restrooms, parking, bussing are at or over capacity in use which will only become a greater issue in the near future. In order to do the additions, we would essentially be adding another school building, but duplicating spaces within those campus areas. At Prairie for example, the space would be essentially adding an intermediate building. This would make the site a K-5 campus that would be housing around 1,500 students with issues of parking, bussing, and traffic (in and out) to address a few items.
3. Community feedback – in 2013, the needs were identified, which were less than today, and a referendum was presented to construct an intermediate facility at Prairie that failed. Community feedback was to construct a High School in order to best address the issue as a long-term solution.
4. Space – the site size at Prairie does not meet the MDE guidelines for the construction of a new High School. In addition the current High School site is limited and would most likely require purchasing adjacent homes or properties in the area to accommodate any major expansion in order to meet green space and water run-off requirements.
Was there any community input on this, or did the school come up with this on its own?
Absolutely. This bond referendum is in direct response to several months of careful planning that included input from District staff, students, parents, community groups, civic organizations, and other stakeholders. Plans are based on demographic and feasibility studies that were conducted to assess district growth and facility-related space needs within the District.
Why is this needed? What is being proposed? And what will the outcomes be?
Why is this Needed?
- Based on the capacities of our buildings, we are at or over capacity in all of the facilities.
- Enrollment projections indicate continued steady growth at all ages for the foreseeable future.
- Given the age and number of physical issues with West Learning Center we believe it is an unwise use of funds to continue to reinvest in this building.
- A goal of the District is to integrate Early Childhood Programming into the K-12 buildings.
What is Being Proposed?
- New High School for Grades 9-12 on District-owned land south of the existing Middle School.
- Current High School becomes Grades 6-8 Middle School.
- Current Middle School becomes Grades 3-5 Intermediate School.
- Current Prairie Elementary becomes Grades PK-2 and Community Education.
- Discontinue Use of West Learning Center Facility.
What will the outcomes be?
- The proposed project scope improvements will result in additional space at every grade level to accommodate projected future enrollments.
- The proposed project scope improvements will integrate early childhood programming with our elementary level students.
- The proposed project scope improvements will discontinue use of West Learning Center Facility.
- The proposed project scope improvements will provide enhanced learning environments for all District students.
When will the work be done?
Although preliminary, the current timelines and schedules show completion of the new high school facility in fall of 2019. This would enable major grade shifts to occur which would in-turn provide appropriate space at all grades throughout the district.
Where can I find out more?
Visit the district website (www.isd518.net) has up-to-date information. Or feel free to contact Superintendent John Landgaard at 507-372-2172 or email your questions to email@example.com.
How is a bond referendum different from an operating levy?
A bond referendum asks voters to support using bond money for the purpose of building projects. An operating levy asks voters to support additional funds to finance learning by hiring teachers, pay utility costs, purchasing learning materials required to run our schools, etc. While both require voter support the two different funding sources can only be used for the required intent and are completely separate from one another.
What will happen if the referendum fails?
This plan is the direct outcome of months of effort and development. As such, there is no plan B ready to be implemented. If the referendum would fail the district will need to go into planning again to determine the next course of action. What we can say is this:
The needs won’t go away. Our enrollment growth and space needs will continue to become more and more severe.
The time to address these issues is now – costs will only increase with time. If the district chose to go back to the community to ask for support on the same issue again the costs will almost certainly be higher.
What is the review process for this work – does the Department of Education get involved?
The district has provided the Minnesota Department of Education (MDE) with all of the required documentation for the proposed improvements and referendum in the form of a “review & comment”. The MDE will review all submitted information to ensure that the project is both fiscally sound and educationally appropriate. Once complete they will notify the district of their review, and their approval is published in the local paper prior to the referendum vote for confirmation by district residents.
I am hearing that there are already plans finished for the school improvements. Is that true?
No, there are no plans yet. Only preliminary concepts and parameters have been developed to be able to establish a budget for the facilities needs. This includes square footages, number of rooms, quality of building systems, etc. as defined by the planning efforts.
What will the school look like? Can I see a picture of it?
The school has not been designed yet, so there is no picture to see. Just as it was important to involve the many users during the planning efforts, it is equally important that many people be involved in the design of the projects. Once the referendum is successful, design planning groups will be established including community members, teachers, staff, and even students to work with the architects in developing the design of the school to make sure it reflects the values of the community.
I am hearing that the district is asking for “fancy” features. Is this going to be a Taj Mahal?
No – the school will not be a palace. The district was responsible in establishing the quality levels for construction of school buildings including materials, mechanical and electrical systems and finishes. The cost estimates are based on these parameters, and the buildings will use this criteria as a guideline for design. The buildings will reflect current educational needs and quality materials to meet the needs of our community without being “over designed”.
Will the community, staff, students, and others have input in the planning/design process after the vote?
Absolutely they will. Approval of the facilities plan by voters on November 8 will authorize the detailed planning and design process to begin. The design process will involve interested staff and Community to provide critical input related to specific needs within each space and within the facility as a whole.
I own a $120,000 home. What would be my increase in taxes?
$202.25 per year, or approximately $16.85 per month. You can find the tax for your property through the “Tax Calculator” on the District Website.
How accurate are the cost estimates that were developed?
Detailed cost estimates have been developed for each component of the proposed referendum with the assistance of consultants to the district. Estimates were based on costs developed from local and regional cost indices and market conditions as well as current bid histories for work of comparable scope and size. The costs are considered to be “total project cost” and are inclusive of construction costs as well as necessary project-related costs such as design fees, permit and plan review fees, furniture and equipment, etc. A contingency factor has also been included in the current project cost estimates.
Why do other Districts have higher/lower tax impacts for similar priced projects?
The tax impact is based on so many different items that a fair comparison cannot be made between districts. The tax impact is dependent on the structure of the bonds, other capital bonds already in place (or expiring), total tax capacity and state equalization aid.
Will there be an opportunity for the public to ask questions and hear information about the bond referendum?
Yes, there will be community meetings. As these are scheduled the district will provide additional information regarding dates and times for you to hear more about the project first hand. The district will also be out and about at many public gatherings. If you have a group that would like information, please contact the district office to schedule an informational presentation.
If I can’t make it to a public meeting, but I still have questions who can I contact?
You can email the District office with a specific question. We will attempt to provide answers to any question received. If you don’t have access to email, feel free to call the District office to speak with someone about the referendum.
Where can I get an absentee ballot?
You can feel free to contact Nobles County at (507) 295-5200 or visit the County's website at www.co.nobles.mn.us for additional information regarding how to obtain an absentee ballot.
How can I get involved with helping the referendum pass?
The district can only provide information about the referendum and the process that led to it. A separate independent citizen committee may be formed to promote the referendum and communicate why they believe it is important for the district.
What is the length of the proposed bond referendum?
The proposed referendum is for a maximum of 25 years, but may be less depending on interest rates, fundraising, partnerships and other facts that could reduce the amount and time.