The Carlton School Board spent more than an hour discussing and identifying a variety of contingency plans if needed legislation isn’t approved or a planned referendum fails during its meeting Monday, July 20.

For nearly a year, the Carlton and Wrenshall school boards have worked to hammer out a consolidation agreement and facilities plan to bring the two tiny districts together.

All consolidation planning, however, has centered around the Minnesota Legislature making a change to a 2014 law that would make school consolidations eligible for enhanced debt service equalization aid and the communities passing a referendum for facility improvements.

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 district's financial advisor, estimates the state would contribute up to 46% of the total cost of the bond. The legislation did not pass in the regular session or the two ensuing special sessions, but Gov. Tim Walz is expected to call a third special session in August.

The districts’ also conducted a community survey in January with majorities in both districts supporting up to $38 million in construction and renovations as part of the consolidation plan. However, board member Jennifer Chmielewski noted the survey was conducted before the coronavirus outbreak began wreaking havoc on the local economy. Since January, the unemployment rate has nearly doubled from 5.7% to more than 11% in May, according to the Minnesota Department of Employment and Economic Development.

For both scenarios, the board worked with new Superintendent John Engstrom to use a ranked-choice voting system to whittle its options down to two.

In the event legislation does not pass, the board’s first choice was to abandon consolidation plans with Wrenshall and move forward independently. The second choice was to wait and try to get the legislation passed in the next session.

Options eliminated included moving forward with a referendum without the state aid and consolidating with Wrenshall without a facilities improvement plan in place.

In the event the legislation passes but a referendum fails, the board’s preferences were less clear, but were still reduced to two options. One option was to pursue a different referendum.

The other option would be to abandon consolidation efforts and move forward with a plan to become a preK-8 district with a high school tuition agreement with Cloquet.

If the legislation goes through, but property owners vote down a referendum, the Carlton board eliminated three other options, including one that would dissolve the district.

The board also unanimously passed a resolution establishing the contingency options as its official path forward.