ELY – A $20 million bonding referendum for the Ely School District building renovation project appears to be on track for later this summer despite questions over safe election procedures and when students and teachers will be allowed back into classrooms.
ISD 696 school board members appear to be set to adopt a resolution to move forward at their regular board meeting on Monday. A public hearing will be required prior to taxpayers voting on the measure on Tuesday, Aug. 11.
With a $7 million commitment from Iron Range Resources and Rehabilitation and another half-million-dollar state grant, school board members also considered the state of the economy during a recent study session.
Superintendent Erik Erie highlighted a review and comment application that was to be submitted to the Department of Education last Friday.
“This is an extensive document and there is a lot that goes into it, including an executive summary, facility deficiency list, detailed financing sources, project description, district obligations, enrollment studies and more,” he said.
Gary Cerkvenik, principal member of the Costin Group, the district’s lobbyist, was asked by board chair Ray Marsnik to comment on the fact that some state school districts are postponing bonding referendum votes because of uncertainties surrounding the coronavirus pandemic.
“I think the difference in Ely that you have, over the other places that may be postponing or even canceling their referendums, is that you have $7 million (from IRRR), and no one else in the state has that. You have something very unique to present to voters,” he said.
He noted that the district has until the end of the year to conduct a bonding referendum and still qualify for the IRRR grant.
“The only other date to have a vote would be on the Nov. 3 general election,” he said. He noted that the risk of taconite plants shutting down across the Iron Range due to the slowing economy could mean a long-term decrease in taconite production taxes that fund IRRR programs.
“The longer the downturn exists, the less money that flows into their various funds,” Cerkvenik said, and ISD 696 could lose the $7 million grant.
“My sense is, you should probably stick to your present course. You should weigh that the situation could get worse than you see today going into the fall or next spring,” he said.
Marsnik agreed.
“I am in favor of moving forward with our timeline,” he said.
Costin Group member and Ely alum Jeff Anderson added that last month in Wisconsin, 54 of 57 school bond referendums were passed for just under $2 billion of taxpayer funding. “In Minnesota, on April 14, there were two referendums voted on and one passed and one failed,” he said. “In the middle of this pandemic situation there still appears to be an appetite by voters to pass these.”
Anderson also noted that a major construction project for Ely could be an economic advantage for the area.
“It would bring business to motels and restaurants, hardware stores, convenience stores and more businesses as this project commences. I think we have plenty of time to educate voters. At the end of the day, if they say yes, we have $7 million for this project. That’s a ‘for sure’ if voters pass this in August,” he said.
Property tax impact scenarios have shown that a $10 million bond would result in a tax increase of about $60 per year, for the next 20 years, for a residential property appraised at $100,000 in the Ely school district. Commercial properties would face a larger property tax impact.
A referendum defeat in August could still leave time for the district to ask voters to reconsider the question, with modifications to the dollar amount or project scope, in November, according to Erie.
Teacher contract
In a special meeting following the April 27 study session, the board ratified a contract renewal with the Ely Education Association through the 2020-2021 school year on a 5-1 vote.
Board member James Pointer, who was on the board’s negotiating committee, voted against the agreement.
“I know our teachers do a lot and it would be nice if we could pay them what movie stars and athletes make, but unfortunately we can’t,” he said. “As a member of the negotiating committee there were a number of things I did not necessarily agree with and I still don’t agree with them.”
Pointer declined to go into detail.
“Two years ago when we negotiated a contract, we gave up a lot of money to get something and now we’re giving it right back to them, and that made (negotiations) very frustrating.”
He referenced a recent finance committee meeting.
“We are going into deficit spending for the year with a lot more deficit coming based on other potential expenses. There is a lot of uncertainty out there right now with everything going on. I had a hard time with this contract,” Pointer said.
According to a negotiations summary, the master agreement with the EEA calls for a two-percent salary increase in 2019-2020 and a 2.5- percent increase in 2020-2021. The cost increase to the district over the two-year term is just under $400,000.
“I’m not disputing James’s concern,” said board member Rochelle Sjoberg “From a budget perspective, I don’t think anything approved by the negotiating team put the district in jeopardy. At the end of the day, it brought the morale and some peace back over concerns from the last contract.”
In other business, the school board accepted the retirement of long-time science teacher Bo DeRemee, effective Aug. 28.