School board discusses options for another One Day Bond sale

By Clay Schuldt
Special for the Argus

The Caledonia School Board held a special meeting on May 31 to discuss the next course of action concerning the One Day Bond Sale.  In November of 2011 the Caledonia School District voted to approve the One Day Bond for the first time with assistance from Ehlers, Inc.

Since the construction of the current middle/high school, the district has been forced to pay a maximum tax levy to pay off the capital loan borrowed to pay for the building.  With the Caledonia district in need of additional revenue, Ehlers persuaded the board to have the district vote on a One Day Bond.

The “One Day Bond” is a form of bond sale for capital loan districts. A one day bond allows a district to fund additional capital projects without causing an immediate increase in tax levies.

The approval of Caledonia’s One Day Bond sale in November of 2011 gave the school $495,000 in additional funds that was used to purchase upgrades in technology and building improvements.

Following the approval of the bond the school board realized there had been a miscommunication between them and Ehlers, Inc. Some of the board was under the impression the One Day Bond would ultimately be forgiven by the state and the school would not owe any additional money.

The truth is that the state will only forgive the loan if it has not been paid off by September of 2051.  Current projections have the school paying off the capital loan by 2031.  This means the district will need to pay off the additional bond money, by extending the length of the original capital loan.  Tax payers in the Caledonia District will not see an immediate rise in taxes, but the tax rates will be at the maximum levy for a longer period.

“When the One Day Bond went through I had the understanding that this was going to extend out what we’re going to owe the state,” said School Board Chair Michelle Werner. Werner compared the One Day Bond to a mortgage, and assumed the rest of the board understood the effect of the bond.  “If we did not all understand that…I am sorry then that I did not understand the questions and we did not get this all explained.”

Board Member Scott Longhorn commented that the misunderstanding was not the fault of Werner as the rest of the members sat in on the same meetings.

“I understood it as, we were not scheduled to have (the capital loan) paid off ever, it was going to be forgiven,” said Longhorn. “My understanding was that it wasn’t going to cost the district any more money, tax wise, because we were not going to have the loan paid off, it was going to be forgiven at the year 2051 anyway.”

Board Member Spencer Yohe agreed with Longhorn, commenting that the deal presented to the board last fall seemed too good to be true, and turned out to have a catch.

Werner felt that either way the school board had not all been on the same page, and she accepted responsibility for the misunderstanding.  However, for Werner the bond money was an acceptable alternative.

“The big thing for me,” said Werner, “the school district has needs. We have technology needs, we have capital needs, and how are we going to pay for these needs?”  Werner went on to point out that the district did not have many other options for securing additional revenue. Whether through a One Day Bond or a tax increase, Werner felt the board would need to go to the voters.

Werner suggested the board focus attention of the next five years, and discuss how to get the district back on track to a point where the school is maintaining rather than playing catch up.

Network Technician Eric Jerviss updated the board on the school’s current technology needs. Jerviss believed that the school could be completely up to date on technology with the approval of another One Day Bond, which would put the school in a position of simply maintaining technology.  “I feel that if we were to do another One Day Bond round where we bought a lot of equipment and were smart about the budget and replacing things…we shouldn’t need to spend this much money every year.”

Board Member Kelley McGraw wanted to know where the district drew the line in approving One Day Bonds and whether any other neighboring districts would agree to consolidate with Caledonia and its current tax burden.

Werner commented that she did believe the district would continue with the One Day Bond until the loan was forgiven, but possibly approve them for the next four years as suggested by Ehlers. Werner even suggested saving some of the bond money to build up authority with the state, which could lower the districts payments.

Werner admitted that this should have been done last time, but the process had not been properly explained by Ehlers. Even if another bond is passed by the voters the district will need to hold on to the funds for a year to prove to the state the school had authority and possibly lower loan payments.

McGraw was concerned that even with another One Day Bond the district would still not be able save much after paying for the suggested upgrades. Longhorn did point out that part of the issue is Caledonia is playing catch up at the moment. Longhorn asked the board whether they should raise the necessary funds by extending the tax payments through a One Day Bond, increase taxes or do nothing.

Werner felt that doing nothing, was not an option, saying “We can’t just refinance, we can’t just say we’re not doing One Day Bonds…because there are two things we need to keep in mind as board members.  One is how do we best meet the education needs of the students in this District and by not going out to ask for any extra money we’re not doing that.  The second, the question we have to be aware of is how do we do it without making a huge impact on taxpayers?”

Network Technician Eric Jerviss suggested that a couple more bonds as needed could solve most the schools upgrade issues. By keeping the school up to date it might increase enrollment, but admitted it was difficult to see the future.

Werner further suggested that the district needed to start pushing the state government.

“What is our state leadership doing for us?” Werner cited the fact that Caledonia and two other schools were left out of a proposal for capital loan schools that could have benefited the district finaically.  “Maybe we need to be pushing more.”

A decision on whether to approve another One Day Bond will be made at the next regular board meeting in June. If approved, the bond will be voted on during the November election.

Licensed staff recall

A full-time teaching contract for Becky Newgaard as an elementary teacher was approved. Newgaard previously taught fourth grade, but will now teach first grade.

Lindsey Meyer’s contract to teach fourth grade full-time was ratified by the board.

A part-time teaching contract was approved for Zach Hauser as a middle school physical education/health teacher.

A part-time teaching contract was approved for Jessie Emerson as a middle/high school science teacher.

A part-time teaching contract was approved for Julia Erchoff-Costet as middle/high school art teacher.

A full-time teaching contract was approved for Tina Fruechte as a middle school teacher.