Albert Lea school board begins talks on referendum

Published 8:34 pm Friday, July 24, 2020

The Albert Lea school board is beginning discussions about when to bring a referendum before voters with the expiration of the current operating referendum on the horizon after the 2022-23 school year.

To have the next referendum approved by voters before the current one expires, the board will need to decide whether to include it on this November’s ballot or the November 2021 ballot, said district Finance Director Jennifer Walsh.

“If we wouldn’t do it one of those two years, it would expire,” she said.

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Walsh said the current referendum provides $567 per average daily membership, or ADM. ADM is computed by dividing the sum of the number of students enrolled each school day by the number of days school is in session.

This year, the referendum will generate about $2.165 million, she said. Of that, $1.437 million is through a levy and about $728,170 is through aid.

Looking at other districts in the Big Nine, she said there are three other districts with lower operating referendums: Austin, Mankato and Owatonna.

She said Austin has already indicated its plans, however, for a higher referendum, and Owatonna is going out for a vote for a renewal and then a staggered increase. She noted the Big Nine operating referendum average is about $900 per ADM and the district could go as high as $1,779 per ADM in the referendum.

Faribault and Rochester have operating referendums of over $700 per ADM, Winona has one with about $1,228 per ADM, Red Wing has one with about $1,650 per ADM and Northfield had the highest at $1,749 per ADM, according to data Walsh shared with the board.

Walsh said while the district could consider going out for a straight renewal, this could also be a time to increase the referendum to support the district’s technology needs.

She said to increase revenue by $500,000, this could come through either an increase in the operating referendum or through a capital project levy, which can only be allocated for technology.

There are differences in how each are set up, and they would impact taxpayer groups differently, she said.

If the board went with seeking an operating referendum increase, this would equate to increasing from about $574 per ADM to about $715 per ADM.

Walsh said an operating referendum is spread out over the referendum market value of properties, and ag land is only taxed on one acre, a house and a garage. Residential properties bear a greater share of operating referendums than other classifications — about 60% of the total.

With an operating referendum, funds can be used for any purpose, and it could have an inflationary increase as part of the ballot question.

With a capital project levy, this levy is spread over the net tax capacity and increases or decreases based on next tax capacity in the district, she said. For this type of levy, a smaller burden would fall on residential properties — about 33% — with more on commercial and agricultural categories.

She said for a $125,000 home, the increase would be about $24 under the capital project levy or $45 under the operating levy referendum.

School board member Dennis Dieser said he thought it made sense to go with the capital project levy because of the technology needs that have come out of the pandemic. Walsh said the funds could go toward technology if the district went the route of the operating referendum, as well.

Superintendent Mike Funk said the board has several factors to consider, including timing of the vote — if the district moves forward with having it on the ballot in November and it fails, it could bring it back to voters in 2021. If the board decided to wait and put it on the November 2021 ballot and it failed, the district would be in “huge financial straights” he said, essentially losing $2 million in revenue.

They also have to consider the questions for the ballot and whether there will be one or two questions, keeping in mind the area voters.

School board member Jill Marin said she would prefer going out in the general election this year during a presidential election so the district could hear the voice of the greatest number of taxpayers.

School board member Angie Hanson said she agreed with Marin but noted the importance of educating voters on the issues.

The board will continue discussing the issue in August. Walsh said she will come back with more information, and they will have to decide how to proceed at the board’s August meeting.