Mila Koumpilova, Published September 04 2009
D-G-F school district gets stimulus aidDilworth-Glyndon-Felton is about to kick off a spree of repairs and upgrades at its two schools – with some help from the federal stimulus package.
The federal government will take care of the interest on a $4.5 million bond the district will sell later this year to finance the project. Local taxpayers will cover the rest.
D-G-F was one of about a dozen Minnesota districts selected to tap the Qualified School Construction Bonds, a part of the 2009 American Recovery and Reinvestment Act. The bonds range from about $300,000 to more than $16 million, and most districts will be able to sell them without voter approval.
Education leaders say the bonds are a great deal, letting districts get more bang for taxpayers’ buck as they tackle pressing facility needs.
“We’re very conscious of how we’ll be paying for it given the economic situation,” said D-G-F Superintendent Randy Bruer. “We had to scale back and do only what’s needed.”
Meanwhile, the Lake Park-Audubon, Minn., district was approved for a
$1.8 million bond but decided to pass up on it. The district had applied for about $19 million in bonding authority to fund the construction of a new high school and a renovation at the district’s elementary.
The state Education Department gave preference to repairs over new construction to spread out resources, said Tom Melcher, director of program finance at the department. Twenty-six districts and charter schools turned in applications totaling
$253 million for the $75 million available.
The Recovery Act included $22 billion for such school building bonds; investors who buy them will receive federal tax credits in lieu of interest.
For D-G-F, the opportunity presented itself on time. This spring, the district paid $30,000 to Johnson Controls, a Milwaukee-based company with an office in Fargo, to complete a detailed study of its facilities and identify necessary urgent repairs and energy-saving upgrades.
The company came back with more than $10 million worth of suggested projects. The D-G-F School Board narrowed the list substantially.
“We picked the things we thought were the most important,” said board member Ronnie Tang. “Even if it’s zero interest, there’s still a small impact on our patrons, and we were very cognizant of that.”
The district will install more efficient lighting, replace old water heaters and leaking roofs, improve classroom ventilation and upgrade security. Johnson will oversee bidding and execution, and guarantee energy savings of $70,000 to $100,000 per year.
School officials say the tax impact of the project will be as little as $10 per year on a $100,000 home, spread over 15 years.
Because the LP-A project involves new construction, the district would have had to get taxpayer approval. Superintendent Dale Hogie said the major savings on interest would have been a powerful selling point for the project, which district voters turned down several times in recent years.
But getting just $1.8 million of the requested
$19 million didn’t make approaching taxpayers worth it, especially as the district gears up for a $750-per-pupil levy referendum in November.
“We can’t just build three or six classrooms out there and later fill in the rest,” Hogie said. “The Department of Education had to recognize that $1.8 million doesn’t do anything for us.”
The district’s application will be reconsidered during an expected second round of bond authorizations in 2010.
Joel Sutter, a school financial adviser with Ehlers & Associates, said two other districts also turned down the bonds. A delay in the allocations made the December deadline to sell the bonds really tight, he said.
But, he added, “They’re a good deal for districts. They save the taxpayers a lot of money.”
Groups such as the Taxpayers League of Minnesota express skepticism about the bonds, sold without voter approval at a time of rising property taxes.
“We’ve taken away control from local taxpayers to make these decisions,” said the group’s President Phil Krinkie, a former state legislator. “Obviously making these repairs to schools is important but is this the time to do it?”
Readers can reach Forum reporter Mila Koumpilova at (701) 241-5529