The Carlton School Board gathered to discuss contingencies in the event consolidation plans with Wrenshall stall at its committee-of-the-whole meeting Monday, June 8.
The two school districts have negotiated for nearly a year on plans to consolidate with a middle and high school in Wrenshall and younger students would go to South Terrace Elementary School in Carlton. However, the districts’ plans are based on a few moving parts out of their control. Officials lobbied the Minnesota Legislature to change a 2014 law making school consolidations eligible for enhanced debt service equalization aid. They also need voters to approve nearly $38 million in renovations and expansions to the campuses in Wrenshall and Carlton in November.
Carlton’s contingency planning committee — which includes board members LaRae Lehto, Ann Gustafson and Tim Hagenah — requested Superintendent Gwen Carman bring the options back to the board.
Options for Carlton if the Legislature fails to act or if the November referendum fails include:
Continuing on the current path with little or no change;
Investing money in the current Carlton Middle and High School or building a K-12 school on the South Terrace campus;
Consolidating with Wrenshall without a facilities plan in place;
Building an addition to South Terrace to make it a K-8 school and working out a tuition agreement for students to attend Cloquet High School;
Dissolving the district.
Enhanced debt service equalization aid would require the consolidated district to take out the full amount of the bond and the state would contribute a portion of the annual debt service payment. Currently, schools can only use the mechanism if there is a natural disaster. Officials in Moose Lake took advantage of the legislation after the old building was damaged in the 2012 flood.
Ehlers, Inc., the districts’ financial advisor, estimates the state would contribute up to 46% of the total cost of the bond.
The Legislature failed to make the change during the regular session that ended in May, but the bill is set to be introduced again during a special session expected to begin Monday, June 15.
A survey conducted in January by School Perceptions showed approximately 80% of residents in both Carlton and Wrenshall support consolidation. The survey also showed approximately 53% of Carlton residents said they would support up to $38.4 million in improvements for a consolidated district.
However, all questions on the survey were based on the Legislature making school consolidations eligible for enhanced debt service equalization.
The option to continue operating the district with no changes is not sustainable financially or for stakeholders, Carman said.
“Our community needs to know there is a plan with dates,” board member Jennifer Chmielewski said.
Board members Tim Hagenah and Sam Ojibway thought staying on the current track sent a signal of stability to the community, but Carman and South Terrace Principal Ben Midge questioned whether the district could continue without a long term plan.
Students are open-enrolling out of the district faster and earlier, Carman said. She said currently Carlton projects a drop in enrollment of 45 students, or more than 10%, for the 2020-21 school year.
Another option called for building a middle and high school at South Terrace — something Carlton voters overwhelmingly rejected in a 2017 referendum.
Chmielewski and Hagenah expressed support for consolidating with Wrenshall without a facilities plan because of the widespread support of the community. However, such a plan would require temporary classrooms at both Wrenshall and South Terrace — something the Carlton board has not discussed with its counterparts in Wrenshall.
Lehto questioned the viability of the plan without improving the facilities and both districts’ difficulties passing a referendum. Residents in Carlton voted against spending more than $23 million to build a K-12 facility in 2017. Wrenshall voters rejected three different proposals in 2017, 2018 and 2019.
“I think both Wrenshall and Carlton have facility needs that we need to address and neither district has been able to pass the referendums that we need,” Lehto said. “If the community really wants the districts to consolidate, they need to understand what the costs are to pay for that. I fear that if the two school districts consolidate, we’re taking two school districts that have issues, putting them together, kicking that can and not getting what we need for the students.”
Tuition agreement with Cloquet
The board spent much of its energy discussing a partnership with the Cloquet School District.
Carlton Board Chair LaRae Lehto said the consolidation plan with Wrenshall remains “plan A,” but the district needs to discuss other options in the event the Legislature doesn’t act or voters reject the facilities plan with Wrenshall.
Under the plan presented, the Carlton board would ask residents to support an estimated $14 million addition to South Terrace to make it a K-8 school.
Carlton would also negotiate a tuition agreement with Cloquet to allow high school students to finish their education in Cloquet.
Cloquet is a logical partner for Carlton in this scenario. A total of 304 students — more than 50% of those living in Carlton — open-enrolled to other districts in the 2019-20 school year, according to the Minnesota Department of Education. Of those, 170 enrolled in the Cloquet district.
In documents provided to the board prior to the meeting, Carlton district officials estimate the needed expansions at South Terrace would cost approximately $14 million. The tax impact on Carlton residents would be similar to the $38 million facilities plan in a consolidation between Carlton and Wrenshall.
In a plan that includes a tuition agreement with Cloquet and an expansion at South Terrace, Carlton homeowners with a residential homestead property valued at $150,000 would owe an extra $191 in property taxes. Owners of a similarly valued property would owe an additional $194 each year in the consolidated facilities plan with Wrenshall — a difference of $3.
Carman noted that while Cloquet would get the bulk of state and federal funding for each student attending high school there, the Carlton district would still receive some revenue because the students would remain Carlton students. Students open-enrolling out of the district take all of the state and federal funding with them to their new school.
Carman said they would need to work with Cloquet to gather more information about how the plan would work, but said Cloquet Superintendent Michael Cary has indicated the Cloquet board would support such an option.
“It’s a win for them and it also avoids the more controversial discussion of consolidation and things like that,” Carman said. “He does feel that even if every Carlton student went to Cloquet High School, they could absorb that. They used to be a much larger high school as well, so that is not a concern.”
Students would also have the option to open enroll to Wrenshall, Esko or other neighboring districts in this plan.
Gustafson and Chmielewski questioned the financial viability of the plan. Carman said the information provided were estimates and projections, but so are the current plans with Wrenshall.
“In my mind, this is a viable plan,” Lehto said.
Gustafson, Hagenah and Susan Karp requested more information about the plan with Cloquet.
While dissolving the district still hangs over the board’s head, none of the members expressed support for this option as a contingency.