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Ely school officials followed through on a plan to seek voter support for a $350,000 capital project levy.
After discussing the issue twice in the last month, school board members took the next step Monday and voted 5-0, with Jennifer Westlund absent, to authorize the levy and call for a special election.
Assuming the Minnesota Commissioner of Education signs off on the plan, the question would be on the ballot as part of the general election slated for November.
Details were largely unchanged Monday, as board members reviewed a presentation and agreed to move forward.
Estimates compiled by the district’s financial advisors showed that levy would raise property taxes by $22 a year on a $100,000 home and $61 on a $200,0000 residential property.
Board chairman Ray Marsnik made note of the tax impact when addressing the proposal and urging board members to be aware of the impact.
“This is an important vote by the board here tonight and I think it’s essential that board members know what they will be voting on,” said Marsnik. “You’ll also be running into constituents who basically will want to know how much the cap project levy is going to cost and also how it will affect their pocketbooks and what the bond is going to be used for.”
Marsnik cautioned the board “to be ready for some of those questions.”
He added those questions were answered in the handout put together by Twin Cities-based Ehlers Public Finance Advisors.
The handout showed the tax ramifications of the levy, identified more than 60 other school districts that utilized a similar levy, and outlined the case for seeking additional taxpayer support.
The financial advisors produced data showing that state education funding hasn’t kept pace with inflation while earlier this year, teh school district made about $270,000 in budget cuts and revenue enhancements, while still authorizing a budget that calls for deficit spending in 2024-25.
Board member Tom Omerza said that further budget cuts “would impact the kids” and argued the district needed additional revenue to keep pace.
A capital project levy was pitched as one source to provide additional revenue, with funds able to be used for an assortment of expenditures ranging from technology and various capital projects, while offsetting general money that would otherwise be used for those purposes.
School officials say the capital project levy would be used to update the district’s aging transportation fleet by maintaining a replacement cycle, while other funds from the levy would be devoted to technology including the support of a suitable replacement schedule for student and staff devices.
A third component of the levy calls for revenue to be utilized for textbook, curriculum, materials and learning equipment - including the purchase of curriculum for some subjects that have not been updated for the last 10to-15 years.
Marsnik cited the curriculum aspect and the need for updating materials while endorsing the levy.
The capital project levy also allows the district to generate revenue from all properties in the district, in contrast to operating levies that exempt seasonal recreational properties.
According to the presentation, current school taxes in Ely on a $200,000 home are $507 per year, smack in the middle in a comparison of nine area districts, which range from $212 (Mt. Iron-Buhl) to $999 (Nashwauk- Keewatin).
Advisors from Ehlers presented data that shows the Ely district has a market value of just over $864 million, with residential homesteads comprising 40 percent of the tax base and seasonal recreational making up the next largest chunk - at 34.2 percent.
