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Ely public school seeks $18.5 million levy
7/24/2010 12:00 AM

Tom Coombe, The Eli Echo

Despite misgivings from some members, the Ely School Board voted unanimously Thursday to proceed with a four-question facilities bond referendum that could cost as much as $18.5 million.

Four separate questions will be posed to district voters on the November ballot, and the first - a $3.15 million proposal to replace the campus heating system and upgrade district technology - must be approved in order for any of the other three questions to pass.

The board is also asking for:

• $3.54 million to cover safety and security projects including major electrical work and fire suppression;

• $2.43 million for new roofs, tuckpointing and a locker room relocation to meet accessibility requirements;

• $9.3 million to pay for ventilation, new windows, a solar roof and to retire some existing capital debt.

Voter approval would result in property tax increases on all parcels in the district, including seasonal/recreational cabins.

If all four questions are approved, the tax hike would range from $185 on a $100,000 home to $923 on a $500,000 home or cabin. A business valued at $500,000 would receive a tax increase of just over $1,709.

The tax impact openly worried board members including chairman Ray Marsnik and Paul Pengal, a local business owner.

Both agreed to forward the requests to local voters, but Marsnik all but predicted defeat.

"I think we are going to be turning people off by going for so much at one time," said Marsnik, who has lobbied for the district to focus solely on replacing the heating system.

Marsnik said the heating system is the district's top priority, and he worried the project may be hampered by the bevy of other requests.

"I think we have a chance to sell the heating system," said Marsnik. "(But) I think a lot of people will vote no on question one because they're afraid the others are going to pass."

Pengal had the harshest criticism, charging that not enough thought was put into the potential tax impact.

"The numbers you throw around are a joke to me as a businessman," said Pengal. "The self-employed person does not get a check or a pension from someplace else... I'm shuddering already if that was to pass."

But superintendent Don Langan countered that the district has a long list of facility needs that have been identified, and board members have discussed a major facilities initiative for nearly four years.

Bill Erzar, the board's leading advocate for facility repairs and renovations, charged the district has waited too long to take action.

He pushed for all four questions to be put to the voters.

"At some point, these other things are going to have to be done," said Erzar.

Board member Amy Richter also wanted voters to weigh in on all four issues.

She said the four-question proposal puts all of the district's needs on the table.

"If you put it out there, I don't know if it will turn people off," said Richter. "I think if we put it all out there, we can safely bet that (at least) number one will pass."

According to Langan, the referendum will hinge entirely on the first question, which focuses on the heating system replacement and $200,000 in technology upgrades.

If it fails, questions two, three and four can not pass.

"If question one does not happen, we would have no reason to do questions two, three and four," said Langan.

But if the first is approved, the remaining questions will each stand alone and require a simple majority vote.

Should the district's proposal fail to gain approval from the Minnesota Department of Education, it would require 60 percent voter support in order to pass.

Estimates compiled by Mike Hoheisel of Northland Securities show that district taxpayers would be on the hook for about $29 million in principal and interest payments, over 20 years, if all four questions are approved.

Approval of the first question carries a much smaller price tag, and much less of a tax bite.

Replacing the heating system and adding the new technology would cost the owner of a $100,000 residential property an extra $32 per year in taxes.

Taxes would increase $159 on a $500,000 residential property and $295 on a $500,000 business.

Hoheisel said there could be opportunities for savings, if the district is able to tap into a low-interest loan initiative for heating and facilities projects.

The proposals presented to the board were tweaked and enhanced after a presentation earlier in the month, when members discussed a $7.5 million bond initiative.

And at the urging of board member Peggy York-Jesme, a $350,000 allocation for the demolition of the JFK Building was removed from the bond proposal.

York-Jesme said that unrest over the board's decision to close the former elementary could hinder the district's efforts to pass a bond referendum.

The issue is set to go to the voters in November, and board action in promoting approval is limited by law.

Langan said the district will need the help of a still-to-be-formed "Vote Yes" committee. A similar group was formed four years ago, when voters narrowly approved a $900 per student increase in the district's operating levy referendum.

On top of the four-question facilities bond referendum, the district is also set to ask voters to approve a $202 per student operating levy.

But some board members indicated Thursday that they may choose to remove that question from the ballot and focus solely on the facilities question.

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