Dave Roepke, Published September 20 2010
Fargo schools to consider building-project votes
Voters did give go-ahead on the project’s financing – in 1991, when 72 percent of them approved a tax hike of 11.4 mills to build Discovery Middle School.
Davies High School, the $44.4 million project set to open next year, will be paid for with the proceeds from the building levy increased nearly 20 years ago. Carl Ben Eielson Middle School, opened in 2006, is financed the same way, according to district budget documents.
Yet when members of the Fargo School Board debate a proposed resolution Sept. 28 that would force public votes for certain types of construction projects, they will be mulling a policy change that wouldn’t have even affected the new middle school or high school.
The proposal board member John Strand is floating would only require votes if a project uses the district’s Building Authority, not its building fund.
So what’s the difference?
That’s a good question, Strand said, and one he’s not sure many taxpayers are able to answer.
“I don’t say that condescendingly,” he said. “It is just murky.”
Here’s how it works:
The Fargo School District Building Authority is an independent nonprofit that was formed in 1988 when Centennial Elementary was constructed. It sells bonds the district can’t without a vote under state law and then leases the building back to the district.
The district then pays the Building Authority lease payments from its general fund, and the rent checks pay the authority’s debt.
District budget documents indicate bonds the Building Authority issued paid to renovate North and South High, Ben Franklin Middle School and Clara Barton Elementary and to build Jefferson and Kennedy elementary schools.
The building levy, which includes 15 mills as a base in addition to the 11.4 mills approved in 1991, feeds a building fund that state law does allow to finance construction projects.
That building fund was used on the Davies High and Carl Ben Eielson projects, the district’s budget shows.
In response to a request from Rep. Steve Zaiser, D-Fargo, Attorney General Wayne Stenehjem issued an opinion in 2008 confirming that both financing plans are legal.
The building levy passed by voters in 1991 continues until the district decides to stop collecting it or a 60 percent majority rejects it in an initiated vote that requires a petition signed by 20 percent of the electors who voted in the last school election, Stenehjem wrote in the opinion.
Stenehjem said that though a building authority can’t be formed by a school district, the Fargo School District Building Authority wasn’t formed by the district. It’s a separate entity, though it was founded by three top district officials, including the board vice chairman and the superintendent, and counts the School Board’s members as its board.
Strand, who campaigned for his seat in 2008 on a platform of public votes for all major building projects, said his proposal focuses on the Building Authority because he thinks of it as a middle ground where he could find compromise.
“I joined a board that made these decisions,” Strand said. “You can’t come on the board and just point fingers.”
He’s pressing for it now, two years into his term, because there’s a lull before the district considers any new projects and because the construction of Davies has sparked public discussion of the issue.
Plus, he just got some support. A poll done by The Forum last month found at least three other members of the nine-person board – all newly elected – think major projects should go to a public vote for approval.
“All of a sudden, I can get a second,” Strand said.
Others on the board say the district has sought a great deal of public input on their building plans and that voting has its hazards.
“Quite often they fail five or six times before they pass,” said board member Paul Meyers of bond issues subject to ballot approval.
Meyers, who as a 10-year veteran of the School Board is its longest-serving member, said having the board approve construction projects isn’t avoiding elections, he said.
“We live in a republic. In a republic, we elect people to make decisions for us,” Meyers said.
State legislators will, however, consider votes for building-fund projects.
Rep. Jim Kasper, R-Fargo, said he will again introduce a bill in next year’s legislative session that would require a public vote on any building a political subdivision such as schools and cities wants to build, if it costs more than a certain amount.
Kasper said details aren’t ironed out, but the measure would likely apply to projects that would cost more than $1 million or $2 million. A similar bill he sponsored in 2009 was defeated 20-27 in the Senate after passing in the House.
“On the big projects, we need a vote,” said Kasper, who added he believes the Fargo district is hiding behind “quirks in the law.”
Sen. Tom Fischer, R-Fargo, said he’d support that bill because he doesn’t think people grasped the implications of the building levy vote in 1991 when they cast their ballots.
According to The Forum’s archives, school officials said after the 1991 vote that the extra 11.4 mills would raise a little more than $1 million a year. The district budget in 2009-10 put the value of a mill at $249,622, at which 11.4 mills would generate about $2.8 million.
“I believe people wanted Discovery school, and they voted for it. But I don’t think they realized what was in it,” Fischer said.
Meyers discounted the notion that the district’s financing relies on legal quirks.
“Give me a break, please. We’re not hiding behind a quirk in the law,” he said.
Readers can reach Forum reporter Dave Roepke at (701) 241-5535