Cloquet School Board stands fast by decision to sell bondsThe Cloquet School Board’s decision to issue bonds to help finance district employees’ post-employment benefits came back to haunt them on Monday night.
By: Wendy Johnson, Pine Journal
The Cloquet School Board’s decision to issue bonds to help finance district employees’ post-employment benefits came back to haunt them on Monday night.
While most board members were ready to stand by their decision and move on to other matters, board member Sandy Crowley indicated she had “many, many questions” regarding the matter during the work session prior to Monday night’s meeting.
“I am so uncomfortable with that vote I made,” admitted Crowley.
“Though I support it,” said board member Ron Gittings, “it does mean shifting the responsibility to the backs of our property owners. In seven or eight years, when we have a building that needs to be replaced, let’s hope they have short memories.”
The new option to allow the sale of bonds without an election was put into place by this year’s Minnesota Legislature. As of July 1, the ruling allows counties, cities and school districts to issue bonds to help fund post-employment benefits over the next 30-40 years.
In so doing, Cloquet School District would free up some $430,000 a year for the district to use for other purposes – something board members find extremely attractive in these times of increasing expenses and diminishing revenues. However, the sale of bonds will directly impact the cost to district tax payers.
Not all were convinced of the board’s right to make that decision, however. During the open forum portion of Monday night’s board meeting, lifelong Cloquet resident Lee Anderson addressed the board in no uncertain terms.
“I don’t think you should be able to do this without putting it before the voters,” Anderson said. “It’s as if you’re going through the back door. It’s taxation without representation.”
Anderson advocated that the district put out a public mailing disclosing the districtwide salaries and benefits.
“I think maybe it’s time you start tackling the tough decisions of trying to bring them in line with the private sector,” said Anderson. “This legislation has enabled you to take the easy way out – just like the city of Duluth with its Red Plan.... I have to provide for my own retirement – no one is going to bond for it. A lot of public employees can retire earlier with full benefits and then maybe even get another job.”
Ken Scarbrough responded to Anderson’s comments by first saying the sale of bonds is simply a method of paying for preestablished benefits that he said began to get out of hand when former Minnesota Governor Jesse Ventura abolished property taxes as a means of paying for general aid to school districts.
“It’s gone down hill ever since,” said Scarbrough.
Board member Stephanie Hammitt commented to Anderson, “There is not a one of us who didn’t ask those same questions you’re asking. We are trying to do what we think is right for the district. If there was another way, I think we would do it.”
Anderson went on to question just how many school district employees who stand to benefit from the post-employment benefits actually live in the district and would have to participate in the higher property taxes that will be required to finance the bonds.
“My understanding is that the majority of them don’t even live here,” he said. “There is something out of whack.”
Gittings pointed out that through the sale of bonds to help cover the post-employment benefit expense, some $400,000 a year will be “freed up for kids,” which he said is the bottom line for the board’s decision.
In discussion of the matter later in the meeting, Sandy Crowley proposed a motion to temporarily rescind the school board’s decision in favor of the sale of bonds until the community can be “offered the information to which they are entitled.”
“I’ve been suffering with [our decision] for the past two weeks,” admitted Crowley. “I don’t believe in it. It smacks of the ‘Purple Plan.’ The community should know full well just what we’re asking.”
Gittings pointed out there have been public meetings held regarding the matter and few have attended.
“I believe the people of the district have the responsibility to inform themselves,” he said. “I think we made a good decision and it’s one we had to take advantage of.”
Crowley’s motion failed to pass for lack of a majority vote.
Kim Josephson, chief financial officer for the district, indicated that the date for the sale of the bonds will be set in the near future.