A year ago, the Carlton and Wrenshall school boards appeared to be on track for a two-site consolidation agreement and a referendum in the latter half of 2020 asking voters to approve nearly $40 million in improvements for district facilities.

As the COVID-19 pandemic swept the nation, the Minnesota Legislature failed to approve a needed change in the 2020 bonding bill to help fund construction. Since that time, new stumbling blocks have emerged and the future consolidation of the two small districts remains up in the air.

Both school boards will see significant turnover in 2021. In Carlton, Board Chair LaRae Lehto and member Jennifer Chmielewski declined to run for reelection. They will be replaced by Erin Szymczak and former board member Julianne Emerson. In Wrenshall, members Janaki Fisher-Merritt, Matthew Laveau and Warren Weiderman will be replaced by Misty Bergman, Alice Kloepfer and Nicole Krisak.

Below is where consolidation stands as the boards move into the new year.

Two-site facilities plan submitted to state

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The two boards initially came together in Summer 2019 to open consolidation negotiations and develop a two-site agreement. The plan was to have Wrenshall School become the middle and high school of the new district and South Terrace Elementary School in Carlton host students in grades Pre-K-5.

In May 2020, the boards each approved a review and comment document to submit to the state of Minnesota, a required step ahead of a referendum.

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The document separated the referendum into two questions. The first question would have asked voters to approve $37.9 million in repairs and renovations to the districts’ facilities. The second question would have requested an additional $1.7 million to repair and renovate the pool at Wrenshall.

If approved by voters in both districts, the Wrenshall campus would have seen approximately $27 million in repairs. Wrenshall would have become the middle and high school in a consolidated district. Repairs to the school would have included converting the existing gym to classroom space and building a new, two-court gym; building a 350-seat auditorium; and renovating and expanding the bus garage. The construction also would have included $3.3 million for a new artificial turf athletic field and track.

The $27 million figure did not include the money earmarked for pool repairs.

The approximately $10 million in construction at South Terrace in Carlton would have included adding additional classrooms and early-childhood programming space; updating classrooms to facilitate student collaboration and small group instruction; converting the existing gym to additional classroom space; building a new gym and locker rooms for physical education; and updating the cafeteria to create a commons space for school and community use.

Survey shows broad community support

Prior to submitting the review and comment document, the districts conducted a survey to gauge feelings in the community about consolidation and the facilities plan.

The survey, conducted by School Perceptions Inc., offered residents three options: $40.1 million to complete all projects, including the pool; $38.4 million to complete all projects except the pool; or $32.2 million to complete all projects except construction of an auditorium at Wrenshall and outdoor athletic fields.

About 53% of Carlton residents who responded said they would support a bond referendum at the $38 million or $40 million level and approximately 60% supported one of those options in Wrenshall. The survey assumed if residents supported the $40 million option, they would also support $38 million, according to Sue Peterson of School Perceptions.

A referendum would need to garner 50% or more of the vote in each district for the consolidation plan to move forward.

Legislative failure delays referendum

While the community showed broad support for up to $40 million in renovations, the tax impacts included in the survey were based on a legislative change making school consolidations eligible for enhanced debt service equalization aid.

Enhanced debt service equalization aid would require the consolidated district to take out the full bond amount, but the state would pay up to 46% of the annual bond payment. Currently, schools can only use the mechanism if there is a natural disaster. This was the route officials in Moose Lake took after the old building was damaged in the 2012 flood.

The legislation was introduced by Sen. Jason Rarick, R-Brook Park, and Rep. Mike Sundin, DFL-Esko, in February 2019. However, as the COVID-19 pandemic gripped the nation, the bill stalled. The Legislature eventually passed a bonding bill, but the needed change was not included in the final draft.

Members of both school boards indicated they do not want to move forward on consolidation without enhanced debt service equalization aid.

In a December call with Carlton Superintendent John Engstrom and Wrenshall Superintendent Kim Belcastro, Reid LeBeau, a lobbyist the districts hired to guide the legislation, was positive about approval in 2021. The bill also enjoys the support of Sen. Roger Chamberlain, R-Lino Lakes, the incoming chair of the Senate Education Finance and Policy Committee.

If the legislation is approved in the spring, the districts could move forward with a referendum as soon as August 2021.

Debt sharing becomes a roadblock

In August, another obstacle to consolidation arose.

A tax impact study conducted by Ehlers, the financial advisor for the districts, showed Carlton taxpayers would see a larger tax increase than their counterparts in Wrenshall.

The expected property tax increases for both scenarios include the passage of a nearly $40 million facilities referendum. (News Tribune Graphics)
The expected property tax increases for both scenarios include the passage of a nearly $40 million facilities referendum. (News Tribune Graphics)

Carlton taxpayers with a residential homestead valued at $150,000 would see a $265 increase in the school district’s share of the levy if debt was shared equally, where a similar property in Wrenshall would see an increase of $104.

If the districts kept their existing debt separate, Carlton taxpayers would see an increase of $234 on a $150,000 home and Wrenshall taxpayers would see a $149 increase.

The community survey that garnered a slim majority of support in Carlton only showed the tax increase associated with the facility improvements. It did not show the total impact of consolidation.

A resolution tying consolidation to keeping the debt separate failed to garner the support of the Carlton board during its Dec. 21 meeting.

In an October meeting, Belcastro told the joint referendum committee she was “confident” consolidation would not move forward unless the debt is shared equally.

Carlton explores more costly contingencies

In December, the Carlton board received cost estimates for facility improvements the district would need if it moved forward independently.

The Minneapolis design firm InGensa drew up some preliminary plans and cost estimates to expand South Terrace to a Pre-K-8 facility and another to convert it to a Pre-K-12 school.

The 54,000-square-foot addition to South Terrace that would include middle school students was estimated to cost approximately $23 million and would add an extra $306 per year to the tax bill of a residential homestead valued at $150,000. The K-8 option would require a tuition agreement with a neighboring district for students to attend high school. Cloquet has been mentioned as a possible option.

Two contingency plans presented to the Carlton School Board Monday, Dec. 14, show the estimated tax impacts would be greater than in a two-site consolidation with Wrenshall. (News Tribune Graphics)
Two contingency plans presented to the Carlton School Board Monday, Dec. 14, show the estimated tax impacts would be greater than in a two-site consolidation with Wrenshall. (News Tribune Graphics)

The $34.5 million plan to convert South Terrace to a Pre-K-12 school would cost owners of a $150,000 house an extra $506 per year.

At the Dec. 21 meeting, a motion to eliminate the Pre-K-12 option as a contingency failed to get the support of the Carlton board.