By Aaron Bushberger, Municipal Advisor
Springfield Public Schools combines strong planning & community engagement to complete successful bond referendum…
Ask Keith Kottke, Superintendent of Springfield Public Schools, how he’s doing, and he’ll likely say, “Rock Solid!” with an upbeat tone.
“Rock solid” could also describe the District’s planning, community engagement and ability to pivot so it could achieve a successful bond referendum in Spring 2021.
Located in southwest Minnesota, the Springfield District encompasses a large, rural area of small townships and communities with about 75% of the property designated as agricultural. The District’s single PreK-12 facility, located on two city blocks in a predominately residential neighborhood, serves approximately 620 students. Originally built in the early 1900s, the school building has undergone 10 additions, the last one being completed in 1994.
Defining the Need
Since that last addition nearly 30 years ago, pedagogy and technology have advanced significantly, and career and technical education has grown in prominence. Building codes, ADA requirements, state and federal mandates and air quality and security standards have evolved substantially. All these factors have placed accumulative pressures on the District’s lone building and its financial resources.
While the District long recognized its building’s many shortcomings, a 2016 facility report from architectural and engineering consultants ISG laid bare the full picture. It identified more than 75 deficiencies, 19 of which were Priority 1, mission-critical and nearly 25 Priority 2 needs. Plus, a relatively new code requirement for Central and Southern Minnesota schools also came into play: Springfield needed to add a storm shelter if it were to proceed with any new building or addition construction.
The District began strategizing how to provide a learning facility conducive to a 21st-century education. Officials searched unsuccessfully for other buildings and weighed the option of new construction. Ultimately, the School Board determined renovating and expanding the current building was the best, most financially feasible, path forward.
Developing the Project
A Facility Task Force of community members, District administrators, staff, and School Board members convened from November 2018 through November 2019 to evaluate project priorities and costs and make recommendations to the Board. Ehlers’ School Finance Team collaborated with the Task Force, providing benchmarks against similar Districts, financing options and tax impacts for various scenarios.
The Task Force proposed a site plan carrying a tax impact of $24.6 million, which would fund:
- The acquisition of six adjacent home sites
- Building enhancements to include safety and security, HVAC replacement, and accessibility improvements
- Renovation and interior modifications
- A gymnasium and locker room addition
- Other programming improvements.
Importantly, the plan also created space for career and technical education programs, along with an auto shop, where students could learn skills that would translate into the local community and workforce.
The School Board approved the plan as it was presented, along with a single bond referendum question to fund the project. Next step? The District needed voters to get on board.
Engaging the Community
In Fall 2019, the District began educating taxpayers on the project and community engagement was tremendous. Student families across all grade levels were excited for the planned improvements, while agricultural property owners were anxious about the project’s potential tax impact.
First, the District hosted a “round-robin” community information session where taxpayers, separated into small groups, got the chance to see the building’s deficiencies first-hand and learn about the site plan and curriculum enhancements. Ehlers’ School Finance Team stepped in to explain proposed tax impacts and introduce Minnesota’s “new-at-the-time” agricultural tax credit – a bipartisan measure that today pays 70% of agricultural property owners’ taxes attributable to school district debt service.
The District then conducted a community-wide survey which revealed strong support for the District and its work and identified specific project elements the community would approve. However, the survey also showed that voter tax tolerance for the project was only about $16 million, $8 million less than originally planned.
Refining the Approach
Leveraging both the information session commentary and survey results, the Task Force went back to the drawing board to better align the site plan with the community’s feedback and ensure voters’ voices were heard. They further recommended splitting the bond referendum into two distinct questions:
- Question One would ask voters to fund the most critical components of the project, the total tax impact of which dovetailed with voter tolerance.
- Question Two would seek to fund the improvements and remodeling of existing spaces and would be contingent upon the first question passing.
In February 2020, the Board voted to hold a special election that May, but when COVID-19 brought the world to a standstill, the District was forced to delay the vote. After a second round of community outreach to renew people’s awareness and support, the District took the two-question referendum to voters in February 2021. Question One passed by 13 votes and Question Two passed by a single vote!
With that voter authorization, in April 2021, Ehlers advised the district on a $16,965,000 bond sale that would fund land acquisition and construction to commence that same summer. The District held the second issuance until it knew whether it would need to leverage full voter-approved authority to cover construction costs. Despite receiving a FEMA grant for 75% of the storm shelter costs, the District had to exercise its full authority to cover cost increases due to inflation and supply chain constraints. Ehlers advised on a $2,800,000 bond sale in March 2022 to fund construction of the new addition, which is scheduled to open Spring 2023.
Required Disclosures: Please Read
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 investment adviser registered with the SEC; and Bond Trust Services Corporation (“BTS”), holder of a limited banking charter issued by the State of Minnesota.
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. In providing this information, The Affiliates are not acting as an advisor to you and do not owe you a fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934. You should discuss the information contained herein with any and all internal or external advisors and experts you deem appropriate before acting on the information.