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Board votes in favor of reduced levy but against under-levy

Cloquet School board members voted in favor of a tax levy that will be just over 4 percent lower than last year’s during Monday’s meeting, but a motion by board member Ted Lammi to “under-levy” by $300,000 failed 3:1, with Lammi the only “aye” vote and board members Gary “Hawk” Huard and Duane Buytaert absent.

Lammi argued that under-levying by that amount would put property tax levels near the level voters expected when they passed the $49 million building bond referendum in 2015. Instead, because of an error by Springsted Inc., the consulting firm that helped create an online tax calculator for taxpayers, taxpayers found themselves on a collective hook for an extra $500,000 a year for six years.

Lammi explained that the $300,000 decrease added to some already completed bond refinancing would get tax levels to the predicted amount for next year.

“My motivation in doing it is, OK, a mistake made, but with good government you try to correct it,” he said.

However, Lammi’s proposal to under-levy specifically in the category of deferred maintenance (which is not matched by state funding so would not result in greater losses) did not meet with favor from other board members or Cloquet School District Finance Director Candace Nelis. Nelis pointed out that on a home valued at $130,000, Lammi’s proposal would save that homeowner $2.59 a month, but would also deliver less money to the district’s maintenance funds.

“You’re giving up something like a roof at the high school to save $2.59 for the average homeowner,” Nelis said.

“I just don’t want to see us going back to the voters in 10 years [for another new school] because we under-levied because of a mistake,” she added.

Board member Jim Crowley agreed, rattling off a wishlist the school district is looking at, ranging from an increase of eight full-time employees, a police officer in the schools, a new gym floor because of a leaking roof at the high school (which is budgeted), possible threats and costs associated with the College in the Schools program, unknown increases to insurance, and change orders on the new middle school building project.

“We have a ton of things out there that are going to cost us money,” said Crowley, now the most veteran member of the board. “I feel bad we got the wrong information from Springsted, but that wasn’t an intent of ours.”

Board member Duane Buytaert said he is also worried about a $500,000 deficit that Nelis is predicting, so the district may be dipping into its General Fund reserves to help make that up anyway.

“Plus, even our harshest critics have said ‘Don’t cut deferred maintenance,’” Buytaert said. Deferred maintenance includes basic maintenance from basic things like sidewalk repair to the roof over the shop area at the high school. It cannot be used for new construction.

“We know that a lot of our buildings have some age to them, so we are never short on our list of deferred maintenance,” Buytaert said. “Leaks to fix, windows to seal, roofs to patch … but we will have a new middle school, so we won’t have to do those repairs to the new building.”

Crowley asked where the money will come from if the district can’t sell the existing middle school building and has to pay to demolish it, at a greater cost than the $500,000 originally budgeted.

Cloquet Superintendent Ken Scarbrough said they had revised the budget so there is now $1.1 million for demolition costs for the old school if needed.

“But you’re robbing Peter to pay Paul with that extra $600,000,” Crowley said, pointing out that that money had previously been allocated as excess and could have covered some of the change orders coming in on the project.

“Yes, the potential for not repurposing the old middle school has made our construction budget tighter,” Scarbrough confirmed.

There was minimal public comment during the Truth and Taxation hearing Tuesday, unlike in 2015, when nearly two dozen local property owners attended to protest how much their taxes were going to increase (34.68 percent) and the Springsted error.

The board passed the proposed levy of $6,311,078 payable in 2017 during the regular school board meeting, down from $6,580,483 payable in 2016, a decrease of 4.09 percent. Levy dollars from local property taxes make up approximately 17 percent of the school district’s total revenue of nearly $39.3 million, with almost 68 percent coming from state sources, 5 percent coming from federal sources and another 10 percent coming from other local sources.