By Shelby McQuay, Senior Municipal Advisor | Managing Director

What’s the Latest from the Legislature?

As Minnesota school districts wrap up the 2023-2024 year, we recognize that many officials are trying to capture as much information on the legislative updates that the Minnesota Department of Education and various professional groups are offering.  Fortunately, Ehlers has been following many of those revisions relating specifically to building projects, timelines, and elections.

Based on the latest legislative action, there are certain deadlines and changes of which districts should be aware. They include:

Review and Comment

The review and comment requirement is most commonly thought of in terms of school construction projects in excess of $2,000,000 per site to hold an election and, if successful, issue school building bonds.  Generally speaking, a school district submits its project for review and comment, and the commissioner responds with a positive, unfavorable, or negative response based on published statutory and administrative factors.  Not only is a district required to secure the commissioner’s positive or unfavorable review and comment prior to holding an election, there are also publication and meeting requirements to keep in mind.

The deadline to publish a summary of the review and comment in the legal newspaper was extended from 12 to 22 days.  This expanded timeframe, while still tight, will help districts meet the publication windows imposed by their local newspapers.  The timeframe for publication is now 48 to 70 days prior to the election date.

For districts with facility projects subject to the review and comment requirement, but not holding an election, it’s important to remember that publication and meeting requirements are tied to the solicitation of bids.  While this is not a new mandate, be sure to keep it in mind as your district begins the procurement process.

Long-Term Facilities Maintenance Revenue for Voluntary Pre-Kindergarten

The legislature increased the number of voluntary pre-K (VPK)  spots allowable to districts and merged the VPK and School Readiness Plus programs.  Should your district have space or remodeling needs to accommodate expanded programming, you can now access long-term facilities maintenance revenue over the $380 per pupil limit to help defray those costs.  This additional revenue will most likely be additional levy, but in rare cases, there is a small aid component if the combined average building age is less than 35 years.  The Long-term facilities maintenance expenditure plan has a line item for these project expenditures under Category (3), Finance Code 355.

Combined Polling Place Resolutions

School districts are allowed to combine polling places in their elections rather than staff each polling location in their jurisdiction.  For several years, districts were required to adopt a combined polling place resolution by December 31st of the prior year, even in situations where they didn’t intend to hold an election, or their election ran in conjunction with the state’s general election.  While it’s been a benefit for districts to leverage combined polling, the restrictions imposed on the timeline to adopt the resolution were arduous.  This year’s legislation loosened the restrictions by eliminating the prior year requirement and only requiring the school board to designate any changes to an existing combined polling place via formal resolution.    While the state no longer mandates the annual adoption of this resolution, it is best practice to regularly review your existing combined polling place(s).

Calling Your Election

Beginning with the November 2024 election, notice of elections must occur 84 days in advance of an election date, instead of 74. This requirement actually applies to all municipal elections, not just those called by school districts.  The noticing requirement will help counties ensure that ballots and other materials are printed in time for absentee balloting.

Uniform Election Dates

It’s been seven years since the inception of uniform election dates.  While operating referendum elections must go to voters at November elections, capital project levy and bond elections may also be put forth to the voters on the second Tuesday of February, April, May, or August.

It’s important to note that an operating referendum may be held on a day other than the November general election if it’s a by-mail ballot or a school district is in statutory operating debt.  If your district is weighing this option, know that the revenue will not come until the second following year.  For example, in successful November 2023 operating referendums, the levy increase occurs in taxes payable 2024 and the revenue is recognized in Fiscal Year 2024-25.  If a district opts to hold a mail ballot election prior to November of that same year, the revenue is still recognized in Fiscal Year 2024-25 because the levy could not increase until taxes payable 2024.  Additionally, November referendums tend to overlap with other jurisdictions holding their own elections.  In those situations, the county runs the election, and a school district would not incur the cost.  If no other jurisdiction is holding an election, then the cost is borne entirely by the school district.  While mail ballot elections extend the 84 day notice requirement to 90 days, generally higher costs and the accuracy of mailing lists provided should be weighed carefully when considering this option.

Important Disclosures:

Ehlers is the joint marketing name of the following affiliated businesses (collectively, the “Affiliates”): Ehlers & Associates, Inc. (“EA”), a municipal advisor registered with the Municipal Securities Rulemaking Board (“MSRB”) and the Securities and Exchange Commission (“SEC”); Ehlers Investment Partners, LLC (“EIP”), an SEC registered investment adviser; and Bond Trust Services Corporation (“BTS”), holder of a limited banking charter issued by the State of Minnesota.

Where an activity requires registration as a municipal advisor pursuant to Section 15B of the Exchange Act of 1934 (Financial Management Planning and Debt Issuance & Management), such activity is or will be performed by EA; where an activity requires registration as an investment adviser pursuant to the Investment Advisers Act of 1940 (Investments and Treasury Management), such activity is or will be performed by EIP; and where an activity requires licensing as a bank pursuant to applicable state law (paying agent services shown under Debt Issuance & Management), such activity is or will be performed by BTS. Activities not requiring registration may be performed by any Affiliate.

This communication does not constitute an offer or solicitation for the purchase or sale of any investment (including without limitation, any municipal financial product, municipal security, or other security) or agreement with respect to any investment strategy or program. This communication is offered without charge to clients, friends, and prospective clients of the Affiliates as a source of general information about the services Ehlers provides. This communication is neither advice nor a recommendation by any Affiliate to any person with respect to any municipal financial product, municipal security, or other security, as such terms are defined pursuant to Section 15B of the Exchange Act of 1934 and rules of the MSRB. This communication does not constitute investment advice by any Affiliate that purports to meet the objectives or needs of any person pursuant to the Investment Advisers Act of 1940 or applicable state law.