Frequently Asked Questions about the 2016 Bond Referendum

 


FAQs Replies

 

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 john.landgaard@isd518.net.

 

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.

 

 

How much additional space will be added to Prairie Elementary?

No additions are included at Prairie Elementary except a vestibule/designated entry for the community education offices.  All work at Prairie Elementary is limited to interior renovations to support the conversion of the building to a PK-2/Community Education/Early Childhood facility.

 

Is there going to be gym space in Prairie Elementary?

The existing gym space at Prairie Elementary will remain but no additional gym space will be added.

 

Why are we not adding on to the schools vs. building a new facility? 

The District has studied several options for how to accommodate their enrollment growth.  Building onto every site creates a strain in terms of site circulation, traffic, and does not solve the problem of core capacity issues such as cafeteria, gym space and other support spaces.  Additionally, the District has presented a plan with several additions in the past that was not successful.  After further study, the data and available options, the plan presented is the most responsible long-term solution.

 

What is the balance due on Prairie Elementary from the previous bond?

The amount is $9,370,000 is the principal balance remaining on the Series 3013A bond issue associated with the 1998 school building bond referendum.

 

Are the values that we are paying on fixed amounts or do they change based on valuations?

The bond payments themselves will be fixed upon the sale of the bonds and the adopting of the awarding resolution certifying the sale of the bonds by the School District.  Individual taxpayers will continue to pay their property tax share on an annual basis based on those fixed bond payments spread over future tax base (net tax capacity) valuations.

 

Of the $79 million, how much would be carried by the Ag land?

Nobles County provide information to Baird for each parcel located within the boundaries of District 518.  Each parcels data (8,361 parcels) includes a class code along with the net tax capacity of the property.  We sorted the class codes and have summarized our findings in the chart below.  Please keep in mind, the agricultural code contains the net tax capacity (tax base the school building bond payments are levied against) of land, home and buildings. The question posed asks, “How much of the agricultural land covers the bond payment?” From the data Baird received, we know it is less than 53.15% because the home values are also included in this assessment code. But it is not more than 53.15%.

Assessment CodeType of General ClassificationEst. Pay 2017 NTCPercentage
100Agriculture9,536,18353.15%
200Residential/Commercial7,692,97042.88%
300Commercial4,4310.02%
400Personal Property707,2213.94%


Preliminary Pay 2017 Data provided by Nobles County, MN

 

How many Pre-K students? Is it all day programming?

The District serves approximately 112 Pre-K students with a half time experience.  The number of under-served students is approximately 50 children of which the district based on space would continue with a half-time program with potential expansion in the future which may include some child-care options.

 

What is included for $79 million?

Per the “Projected Budget Breakdown” available in the presentation available on the District’s website.

  • New High School - $59,600,000 (capacity for 1,100 students, learning space for science, industrial technology/AG, art, media, and other programming besides gym space).
  • Site Development - $3,000,000 (development of site including utilities).
  • Multi-Purpose Stadium - $7,200,000 (Turf field, track, bleachers, etc).
  • Existing Building Conversions - $1,800,000 (renovation work required to convert Prairie Elementary to a PK-2/Community Ed. Facility, the current Middle School to a 3-5 Intermediate School and current High School to a 6-8 Middle School).
  • New ALC space - $3,400,000 (on site with High School)
  • FF&E, Technology, & Security - $3,400,000 (furniture, fixtures, equipment, technology, security and other capital items necessary for operation).

 

What happens to the current Trojan field?

Trojan field will continue to be a District-owned facility that will support activities District-wide at the proposed 6-8 Middle School (current High School).

 

Does the plan include district office space?

There is some space proposed to be renovated at the current Middle School (proposed 3-5 Intermediate School) into some District functions including the NCIC Initiative and Teaching and Learning Offices, functions that are presently held in the West Learning Center.

 

How does the “new” gym space compare to the proposed gym space?  Are we duplicating gym space?

The new gym at the proposed High School is programmed to be a three-station (three full size basketball courts) gymnasium with space for walking track around the upper level of the gym.  The gym at the current High School will remain as it is for Middle School and activities programming.

 

What would the bleacher seating look like in the new facility?

The proposed High School is not yet designed and will have a wide-reaching community engagement process during its design.  Three-station gymnasiums can typically accommodate 1600-1800 bleacher seats depending on the configuration.

 

What does the operational cost look like for the future with the new building?

The District projects that the current budget will be able to cover operational costs with staffing changes, elimination of West Learning Center and planning. The need to ask at this time for additional operating cost increases is not anticipated based on projections.

 

How many students are open enrolled into Worthington?

The number of students that open enrolled out of the Worthington District last year was 314 students and the number of students that open enrolled into the district as well as tuition into the district was 182 students.  This is a net loss of 132 students.

 

How many students are in each grade?  How many students graduated in 2016?

The number of student in each grade range from 192 to 258 students with an average of 241 students per grade.  Last year we had 189 graduates (High School and ALC) and in the current year we are projecting that there will be over 200 graduates.

 

Are there plans for Ag programming to continue at the New High School?

The District does plan to include the Ag program as a part of the New High School programming.  This program provides great opportunities for students and fits our Ag based community.

 

What happens if we don’t build?  Is there a plan B?

If the referendum is not successful, the District’s enrollment growth will continue to strain the existing facilities that are already at or over design capacity.  Overcrowding of the schools will continue, along with high class sizes and funding challenges.  The School Board will need to develop a plan B which could consist of multiple options that do not educationally favor providing a quality education and result in the elimination of programs or other unfavorable changes.

 

Did the consultant figure in refugees, etc. into the total numbers?

Hazel Reinhardt, former State demographer and consultant, completed an enrollment projections study for the Worthington School District on 6/15/2015.  The scope of her study did not include sociopolitical analysis of the regions that may lead to refugee migration but instead considers local population change both from natural increase/decrease and net migration, migration from other District, District capture rates, historical enrollment information and cycles, birth rates, and other demographic metrics.

 

Where did the $3 million that was paid for the land come from?

The $3 million was paid out of the operating assigned fund of the District commonly known as the general fund.  These dollars were in an assigned account to purchase property or complete capital projects.

 

How many years will we be paying for the project?

The term of the borrowing is estimated to be 25 years.

 

How can Landgaard say that just because my valuation increases that my tax rate won’t increase?

Mr. Landgaard is referring to the annual debt payment on the bonds are estimated to be very similar to each other across the 25-year term of the borrowing.  For example, if there is not new tax base growth in the School District, but the entire School District is assessed at the same inflationary rate, your property value could go up, the tax rate on the debt levy will go down and you would be paying the same as the previous year.  The MN property system is a very complex mechanism dependent on many factors such as reassessment factors, new tax base growth, land values, etc.

 

If the “Farm Bill” passes who picks up the 40%?

Although the details still need to be finalized legislatively, basically, the agricultural tax credit would be supported by other income, sales and property taxes collected by the State of Minnesota.

 

What would happen if we cut classes – What are the electives – so what would be the cut?

The school board would need to consider an option of eliminating some electives in order to provide space for core programming.  The various age levels all have elective programs, and each of these would need to be addressed independently in order to find the appropriate space needed.  Examples of elective programming are: music courses, art courses, business courses, Ag. courses, language courses, technology courses and so on that support each grade level programming in a specific manner.

 

What is the Plan B or C?

The District has not developed plans B or C if the referendum does not pass.  They will begin discussion options that would exist and work to narrow what would be a good plan B or C.  The district did ask for input numerous times in which other options could have been discussed, but based on data and information over the past 5 years the decision was made to ask for the current proposal since it addressed the overall needs for all programming and grade levels.

 

Did the project numbers include Pre-K?

Yes, the master plan does address the expansion of the Pre-K program and working to include educational opportunities for these early learners.

 

Why didn’t we use the land at Prairie Elementary?

The District has studied several options on how to accommodate the enrollment growth. Building onto every site creates a strain in terms of site circulation and traffic and does not necessarily solve the problem of core capacity issues, such as cafeteria and gym space. Additionally, the District has presented a plan with several additions in the past that was not successful.  After studying the data and available options, the plan presented is the most responsible long-term plan.  Additionally, the Department of Education would recommend at least 51 acres for a High School of 1,100 students in addition to the land required for PK-2 and Community Education programming.  Prairie elementary is a 58 acre-site and would not serve both uses sufficiently.

 

Has the district done an impact study on how the $79 million would impact the community?

The District has made available an estimate tax impact for every parcel located in the District through its web site tax calculator.  

 

What are the benefits to the community?

A new facility will provide space for education for the students that attend District 518.  So along with the educational benefits, it will allow the district to eliminate a facility that is being used (West Learning Center).  Having a strong school system is an invaluable asset to a community.  Worthington’s success as a community shows in its continued growth, which has caused the strain in the District’s facilities and the ability to serve both the current number of students and the projected enrollment increase.  This bond referendum is in direct response to many months of planning that included input from staff, students, parents, community groups, civic organizations, and other stakeholders.  Additional space for students and community use that includes classrooms, gymnasium space, and some athletic facilities are included.  This facility can also build on the current community pride and expectations of a quality education system that provides numerous opportunities for students.

 

Are the new pork plants going to take jobs away and ultimately take people away?

We do not believe this is an issue for our community and no communication or information has contradicted that position.

 

Why do so many students open enroll out?

Parents choose to open enroll their children for a variety of reasons and the district does not always get an accurate response to the reasons, but most of all it is personal preference based on their family desires.

 

I’m concerned about the traffic on Crailsheim – What is the district going to do about that?

The District will continue to work closely with the City and other regulatory agencies to ensure all due diligence regarding traffic studies, watershed/storm water requirements, utilities, etc. are accounted for and that all plans align with the goals and future development plans of Worthington.  We have and will continue to work collaboratively with the City/County to meet the needs of the community.

 

Will the district need more levy money from the voters to support this new facility?

At this time, based on the current funding available to ISD 518, the District is not planning to increase its operating levy referendum request to the voters in the near future.