by Mari Radtke
The South O’Brien School Board met at their regular meeting on Monday August 18. Among the items discussed was the addition of a “Victory Bell” at the football field. The addition is a collaboration with the Carter Halverson Foundation. The bell costs $1800 and will be placed to the southeast of the high jump pit.
Superintendent Wade Riley reported that all of the preschool classes are full. There are 40 4-year old students enrolled and the 3 year olds are filling fast. There are 20 new elementary students. He also reported that the summer school program, “Jumpstart” was a success. Transportation for the program was supplied to families.
A Physical Plant and Equipment Levy (PPEL) is in place for South O’Brien. The district enjoys having revenue from both the board elected levy and the publicly approved levy. The PPEL is approved for the district until 2033. The state legislature is considering legislation to reform that funding mechanism for school districts. The legislation failed in the last session. Education leaders are predicting it to pass in some form in the coming session. If it passes in its current form, up to 40% of the PPEL funding could disappear through the levy expiration. For South O’Brien that levy provides from $350,000 to $370,000 annually to build, maintain or improve school infrastructure and facilities. The legislation is predicted to also affect SAVE, the sales tax revenue for facilities. The district is already looking at a $5 million overrun on its construction project.
The board heard from their financial planner, Matt Gillespie of Piper Sandler. His proposal to combat the lost revenue was to bond the entire future revenue now and bank it. The bonding must have a purpose in order to be legal and a vote is not needed as the tax has already been approved. The fear is that the school will lose up to $2.9 million to pay for the construction project currently underway and any unforeseeables that may arise. There was much emphasis that this is not a tax increase.
A work session was held with Gillespie explaining the situation via ZOOM. He explained how the property tax and credit system works. That a school district can tax to “pay the bill.” He explained school financing mechanisms, certified enrollment, different levies and how a body gets to its budget number.
He went on to explain some of the difficulties of the legislation the way it is currently written. As written it cannot be equitable across all taxing classes. He addressed property classes; residential, commercial, ag; he addressed the effect of rollbacks. He offered the debate between no rollbacks and lowered levies. How to make the change have an equitable outcome on all propert owners is expected to be the focus of this session in regard to this legislation.
If the board finds that bonding the approved levy is its best course of action, it must be done by December 31, 2025 to avoid an anticipated retroactive rule which could be devastating for school districts not getting as much of their approved levy as possible. The board will consider their action at the next regular meeting on September 15.