By Shelby McQuay, Senior Municipal Advisor | Managing Director
Aaron Bushberger, Municipal Advisor

School Districts Reflect on Achieving Referendum Success

The November 2023 election provided mixed results for Minnesota school districts requesting operating referendums, capital project levies, and bond referendums. These elections came on the heels of two years of record inflation, additional funding and new mandates from the legislature, and the pending expiration of federal stimulus funds. We spoke with officials at two districts that saw their referendums fail in 2023, but quickly regrouped, re-engaged with their communities, and ultimately achieved success amid a very noisy November 2024 election season.

While being demographically and sizeably different, and each facing their own challenges, the messages these districts conveyed during our interviews revealed many parallels in their respective stories, processes, and communications. Notably, they shared very little pause about taking their ballot questions out during a presidential election after understanding why their 2023 referendums didn’t fare so well.

Inver Grove Heights, ISD #199  (Dave Bernhardson, Superintendent and Katie Sheridan, Communications Coordinator)

As the superintendent of Inver Grove Heights Schools since 2014, Dave Bernhardson has a strong understanding of both the community and school district. The district was able to get by for several years without having to implement significant budget reductions, but officials soon realized they would not only need additional funding to support the level of services that district families and residents had come to expect, but when compared to peer districts, Inver Grove was falling behind in terms of operating referendum authority.  In late 2022, the district began exploring the potential of an operating referendum, which led to a community survey being conducted in early 2023 and again that April. The survey results revealed a generally positive stance relative to raising new operating funds,  which prompted the school board to move forward with a two-question referendum. The first question would ask for an amount that aligned with the tax tolerance noted in the survey results, while the second would seek for an additional amount and be contingent on the first passing. The district placed both questions on the November 7, 2023, ballot.

Upon receiving election results, the district learned both questions failed:

• Question 1: $410.00 per pupil, failed 1,650-1,878 (47% – 53%)
• Question 2: $110.00 per pupil, failed 1,618-1,901 (46% – 54%)

Because  the results of the election didn’t align with either the survey results or the marketing plan the district followed in an earlier successful referendum, the district was eager to understand what happened and develop a post-election strategy based on what they might learn. To facilitate the flow of open community feedback, district administrators developed an informal and succinct online survey with just one goal in mind: Why did voters vote the way they did? They also established a special telephone number where voters could call in and provide direct feedback.

To create awareness and maximize engagement, the district mailed postcards introducing the survey and phone line, advertised them in its quarterly newsletter and included them in other district communications.

District administration was encouraged with the number of respondents and assurance from community members who said they felt their voice was being heard. Similar to the earlier scientific survey, respondents showed strong overall support for the school district. However, community members made it clear that while they supported the district, from a taxpayer standpoint, they believed the request the district made felt more like a ‘want’ than a ‘need.’  Results also revealed that while taxpayers were supportive and had trust in the district, they weren’t able financially support its needs at that time.

Armed with the latest survey results and telephone feedback, district administration forged a path forward. Dave created the ‘Group of Five:’ five empty nesters who know the community well and are well respected. After several meetings, the group encouraged Dave and the school district to ask the community for additional funds again. Their advice this time was to ask only one question and keep the message simple. This was the push the district needed to pursue another operating referendum in November 2024.

Despite the historical trends associated with school district success, or lack thereof, in a presidential election year, the district conducted another scientific survey in spring 2024, which again showed strong support for the school district and a willingness to support a potential tax increase. Officials presented these survey results, along with the Group of Five’s feedback relative to simplicity, to the School Board, requesting approval of a one question ballot for $627.00 per pupil. In keeping with the advice to keep messaging simple, the full operating referendum request would simply be to support the current services and operations of the district, with one exception: An additional School Resource Officer. District officials believed they could add this one-off request because it aligned directly with the importance survey respondents placed on school safety and security. The Board summarily approved the ballot.

Once they received Board approval, Dave, Katie, and the rest of the district team quickly established a communication plan that would cut through the din of a very busy 2024 election cycle and focus only on what they needed voters to hear. The first step was to immediately reach out community member to make sure everyone heard directly from the district. The district mailed a personal letter from Dave to  every registered voter household to announce it was pursuing an operating referendum. Dave then reached out to community leaders to inform them of the upcoming referendum, and most importantly, explain why the district needed these additional funds.

The district’s ongoing pre-election communications strategy was simple: Clearly explain the need for this referendum and what will happen if it doesn’t pass. While the question itself was abundantly clear, the district recognized the “what if it fails” scenario was a bit murkier because it had largely insulated the public and parents from previous years’ budget reductions. To ensure clarity, the district plainly stated that there are no more budget reductions to make, and if the referendum didn’t pass, class sizes will increase, and a number of other potential cuts will have to be considered.

Another key component of Inver Grove Schools’ communications strategy was to ensure voters received accurate tax impact estimates relative to how property owners would be affected should the referendum pass. To accomplish this, the district worked with Ehlers to create a custom property tax calculator website where community members were able to enter their specific parcel information and generate the correct tax impact estimate for their properties.

The district worked its communication plan for several months leading up to the election with the goal of touching every voting household at least seven times. Between the early mailing, the required operating referendum mailing, and other standard district communications and newsletters, the district ensured a near constant flow of information between July and the November election date.

This resulted in a successful referendum which will generate approximately $2.2 million in additional revenue beginning with the 2025-26 school year for the district.

November 2024 operating referendum

• Question 1: $627.00 per pupil, passed 8,613-7,350 (54%-46%)

Lewiston-Altura, ISD #857  (Gwen Carman, Superintendent)

Gwen Carman was hired as superintendent of Lewiston-Altura Public Schools in spring 2020. Starting in a new district in the midst of a pandemic didn’t allow Gwen to really dig into the needs of the district as all schools were taking the start of the 2020–2021 school year one day at a time! However, drawing on her experience as a superintendent in other school districts, Gwen knew the district would need a strategic plan to ensure financial viability moving forward. Although strategic planning results are often predictive, the process is a best practice for building a strong foundation and creating a way to build consensus among stakeholders.

Like many Minnesota school districts, Lewiston-Altura was experiencing significant budget challenges impacted by declining enrollment, rising costs, decreasing state aid, reduced  buying power due to inflation, and aging facilities. The district’s enrollment was projected to continue declining, and their operating levy was set to expire in fiscal year 2026. The district investigated potential opportunities to alleviate these headwinds including consolidating buildings to reduce operational costs, increasing class sizes, eliminating low participation activities, offering fewer electives at the high school, and reducing support staff and administration full-time employees. Recognizing the need to uncover all factors impacting the district’s general fund budget, the School Board engaged a consulting firm in spring of 2021 to lead the district through a comprehensive planning process to identify pressing needs and better understand how to “right-size” the district for the future.

Prior to digging into the strategic plan process, the School Board and district administration had to establish a baseline and get a thorough understanding of the physical conditions of the district facilities, understand where enrollment was heading, and analyze operating needs. This led to a community strategic planning survey and a community task force to solicit feedback from all district stakeholders. The district had to make some difficult, but necessary decisions. The district was running three school buildings for about 700 students: a PreK-4^th grade elementary school in Lewiston, a 5^th-6^th grade school in Altura and a 7^th-12^th grade secondary school in Lewiston. As many other Minnesota school districts have experienced, Lewiston-Altura saw enrollment decreases for five straight years. This enrollment decline, combined with a lower fund balance that hovered below 10% was causing a tremendous amount of pressure on the district’s already tight budget. Knowing that facilities would likely be an important component of the upcoming strategic planning process, as well as the need to reduce operating expenses, the school board decided to close the intermediate school, thereby redirecting the 5^th grade students to the elementary school and the 6^th grade students to the secondary school.

As is the case with many school districts’ strategic plans, Lewiston-Altura’s included two familiar categories: Finance and Facilities. The Finance area had three specific goals – the first of which was simple: increase revenue. Another, however, was more nuanced in stating…”We must also be intentional with our messaging to be sure the community and families know about our successes and strengths.”…words which would come into play as the district began communicating the need for additional funding.

The Facilities area of the district’s strategic plan noted the fact that neither the high school (built in 1965) nor the elementary school (built in 1975) had significant upgrades since they were constructed. As such, the primary goal for Facilities was to “Create and implement a plan to ensure that our elementary and high school are safe, secure, flexible and adaptable facilities.”

With operational pressures at play, and the $51.92 per pupil unit generating less and less money each year when paired with declining enrollment, the district identified an amount of additional funds required to address its operating needs through the near future.

District officials conducted a targeted survey in spring of 2023 to test the perceptions of the district, tax tolerance of both operating revenue and building bond increases, and interest in various facilities projects.

The survey results demonstrated there was tolerance for a small increase for certain projects. The district moved ahead with a bond question that exceeded the amount indicated as successful on the survey, ultimately deciding to incorporate an expansion for career and technical space and a bus garage into the first bond question. In addition, while contrary to what the results of the survey suggested, the district heard from community members about the desire for an auditorium and elected to include the request as a stand-alone question.

The district received operating referendum results on November 7, 2023, and learned that the operating referendum failed by 12 votes and both bond questions failed:

• Question 1 – Operating: $760.00 per pupil, failed 539-551 (49.5% – 50.5%)
• Question 2 – Bond: $26,645,000, failed 452-633 (41% – 59%)
• Question 3 – Bond: $12,540,000, failed 319-756 (30% – 70%)

Those that voted for the ballot measures were upset and scared as the Board dove right into budget reductions and communicated the impact of those reductions to their district constituents. These results were certainly disappointing but became the impetus for getting timely and accurate information out to the community and encouraging a stronger coalition than just the school board and administration going it alone.

As 2023 became 2024, the district conducted another community survey which confirmed the lack of support for adding additional space, building a bus garage, or constructing an auditorium. The lack of support was so apparent that the simple ask of building a bus garage, even as a minor portion of the question, was thought to weigh down the entire election. The district needed a new game plan the 2024 election.

As it considered overhauling the construct of the bond question , the district held firm on the amount of the operating referendum revenue it needed to maintain fiscal viability. District officials stayed the course, asking in the first ballot question for the same amount as the prior year. Even though some said the district could argue that the needs were greater given the impact of inflation on operating expenditures, the value of keeping community messaging simple was far too powerful

In approving a new referendum, the Board ultimately leaned heavily on the simplicity of the ask and the alignment to the tax tolerance survey results. They agreed to ask voters for the same operating referendum revenue authority as was presented in 2023 and a bond amount commensurate with the tax tolerance conveyed in the survey.

The board and advocates of the plan had strong conversations and were genuinely concerned about the potential negativity associated with going out during a presidential election. What ultimately prevailed was a mindset that if you stick to the message, it will overcome.

As part of the messaging, the district engaged a volunteer Public Relations specialist to guide the communications plan. Aside from ensuring the communications remained simple and on-point, this specialist leverage the fact that the district achieved MCA scores above the state average for the first time in several years to shift the focus toward celebrating achievements and keeping positive district news top of mind for voters.

Just as the strategy Dave employed by embedding himself with district empty nesters, , Gwen focused on the small groups in her community that garnered wide respect, connecting in small groups with the Lions, a local church, farmers, and one major local employer to stress the vitality of the district and how it plays into the sustainability of their community at-large.

From a global pandemic to near consensus on closing a school in one of their communities, the district’s simple messaging persevered through a tumultuous election season.

Late into the night of November 5^th, the district received the news:

November 2024 referendum

• Question 1: $760.00 per pupil, passed 1,245 – 1,032 (55% – 45%)
• Question 2: Bond: $19,950,000, passed 1,178 – 1,097 (52% – 48%)

Ehlers’ School Finance Team extends heartfelt thanks to Dave, Katie, and Gwen for taking some time to share their stories with us and offer insights to those who may be considering going back out to voters after an unsuccessful referendum, or maybe those districts that may pursue a referendum for the first time in a long time.

During our interviews, all three all mentioned the importance of knowing your community and understanding that each school district community in Minnesota is different. Both districts learned from their 2023 referendums,  listened to their stakeholders, and didn’t waiver from the district’s needs to ask their community again in 2024. This resolve and transparent messaging proved to be successful as both referendums.

Dave, Katie, and Gwen each offered to share their contact information and are more than happy to talk with other about their process or answer any questions. Please reach out to your Ehlers advisor and we will connect you. In conclusion, we thought this quote from Dave best summed up his relief after their successful referendum and what is reflective of all the work and effort school boards and district administrators undertake during referendum campaigns…” And we’re not doing it again next year!”

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