School Finance

The Solution

The District engaged Ehlers for Bond Referendum Planning & Support and Debt Issuance services. Ehlers helped the District define which elements of its facilities plan could be funded by Board-approved facilities maintenance bonds versus projects that would require a voter-approved Bond Referendum. The School Finance Team helped structure a plan that combined multiple bond issues for different purposes, providing funds as needed, layered upon each other to help maintain a property tax structure that was palatable to taxpayers and voters. With the scope and financing plan defined, Ehlers outlined the tax implications for voters, helped with ballot language and supported taxpayer education efforts.

The Outcome

In November 2019, 57.4% of voters approved the $326-million building-bond request, knowing it would be accompanied by at least $64 million in Board-approved bonds. Ehlers has since advised the District on multiple debt issuances totaling nearly $400 million, each timed to meet construction funding needs while maintaining the tax structure proposed during the 2019 election. The District has completed its new elementary school, and is in the process of converting existing buildings to accommodate the early childhood, district center and community education needs. The north high school campus has been expanded into a centralized 9 12 campus and safety & security and learning environments have been upgraded in other buildings. An additional $38 million in issuance is still planned.

The Solution

SCRED engaged Ehlers’ School Finance Team for Debt Planning & Issuance Services. Ehlers modeled multiple scenarios for a Board-Approved Lease Levy for the purchase and buildout of a former grocery store in Pine City and coordinated with Districts’ attorneys to structure a financing agreement between the three Districts and SCRED. With the building being near Pine City Schools, that District agreed to serve as the fiscal host and issue the financing on behalf of the other Districts.

The Outcome

The School Boards of SCRED and all its member Districts approved the lease-levy proposal, allowing the Pine City School District to issue approximately $5 million in debt to fund the project. The building was purchased in 2021 and the build out was completed in November 2022. While Pine City is ultimately responsible for making the payments on the financing, the Hinckley and East Central School Districts have coordinated with SCRED to share in the cost through their available levy authority and general fund. In the end, it’s the students who win with this centralized facility serving the three communities and better meeting students’ programming needs.

The Solution

The District engaged Ehlers’ School Finance Team for Debt Planning & Issuance.  In developing the financing strategy, Ehlers carefully considered the timing of both the proposed projects and anticipated deferred maintenance needs, along with the overall scope of the initiative and the associated cash flow and issuance requirements. The firm evaluated the District’s ability to transition certain maintenance projects from a pay-as-you-go levy approach to bond financing, thereby creating additional tax capacity for a voter-approved issue. Based on this analysis, Ehlers advised splitting the large bond issuance into multiple issuances aligned with project timelines, a strategy designed to better manage cash flow, mitigate near-term tax impacts, and reduce the total interest cost over the life of the debt.

The Outcome

Voters approved school building bonds in an amount not to exceed $223,225,000 for acquisition and betterment of school sites and facilities, including:

• Safety and security improvements at all schools
• Career and technical education space renovations at all high schools
• Science, technology, engineering, arts and math space renovations at all magnet schools
• Classroom renovations for special education, gifted/talented and multilingual learners at all schools
• New furniture and flexible learning spaces added throughout all schools
• Library media center renovations at all schools
• Outdoor classrooms added to all elementary and middle schools currently without
• Construction of a new elementary school, and an addition onto Maple Grove Senior High School
• The repurposing of an elementary building to a community education space

The Solution

The District engaged Ehlers’ School Finance Team for Debt Planning & Issuance. Ehlers worked closely with the District as they evaluated and prioritized proposed projects, helping leadership focus on the most critical needs. The District also reassessed the community’s appetite for tax increases and gained insight into voter perceptions of project priorities. To improve clarity and voter understanding, Ehlers recommended consolidating the proposed bond questions from two into a single, more focused question, simplifying messaging and reducing voter confusion. Additionally, Ehlers structured the debt schedule to include a natural decline in payments over time, creating flexibility for the District to address lower-priority projects in future years with minimal additional tax impact.

The Outcome

The District had a successful election on November 5, 2024 with voters approving a $19,950,000 to provide funds for the acquisition and betterment of school sites and facilities at the Elementary School  and High School, including the creation of secure entrances; the construction of traffic flow improvements; renovations and upgrades to create larger kindergarten classrooms, flexible learning spaces,  and improved CTE, science and art classroom spaces;  remodeling and upgrades to create ADA-accessible restrooms and improved locker rooms; and the completion of various deferred maintenance projects.

The Solution

When the Board initially explored options to address ongoing funding needs, it first considered pursuing an operating referendum. The District engaged Ehlers’ School Finance Team for Financial Planning and Ehlers subsequently educated the Board on the two voter-approved annual revenue mechanisms available under state law: operating referendums and capital project levies.  Ehlers highlighted key differences in the funding mechanisms, including the distinct tax bases on which they are calculated, referendum market value (RMV) versus net tax capacity (NTC), and the contrast between a per-pupil revenue request and a fixed tax-rate request. As part of this analysis, Ehlers reviewed the District’s property tax base and identified a large share of seasonal recreational property. Because seasonal recreational property is excluded from RMV, the Board recognized that an operating referendum would significantly reduce the taxable base and shift a greater tax burden onto year-round residential property owners. In addition, a capital project levy is imposed as a tax rate and is not dependent on student enrollment, providing more stable revenue. Although some districts limit capital project levies to technology expenditures, Ely sought and received Review and Comment approval from the Minnesota Department of Education, allowing the levy to support a broader range of district needs.

The Outcome

The District had a successful election on November 5, 2024 with voters approving a capital project levy authorization of 3.445% times the net tax capacity of the school district.  The additional revenue from the proposed capital project levy authorization is used to provide funds for technology (including personnel), school buses and school-related transportation vehicles, as well as curriculum, textbooks and materials.

The Solution

The District engaged Ehlers School Finance Team for Financial Planning.  The District and Ehlers approached the situation by first examining the District’s existing authority of $775 per pupil, which was authorized through taxes payable in 2027, and fell within the window for potential Board renewal. Ehlers provided data for evaluating options; leaders considered the composition of the property tax base, primarily residential and commercial, and reviewed the overall tax burden in comparison with neighboring school districts. They incorporated survey results to gauge community sensitivity to potential tax increases and conducted an analysis to determine the level of revenue needed while balancing the tax impact that property owners would be willing to support. Ultimately, with the advisement from Ehlers, the District chose to pursue a revoke-and-replace strategy rather than establishing an entirely new authority, recognizing that if the election were unsuccessful, the Board would still retain the option to renew the existing authority.

The Outcome

The District had a successful election on November 4, 2025, with voters approving to revoke the existing authority of $775 per pupil and replace it with $1,550 per pupil, thrn increasing each year by the rate of inflation.

The Solution

The District engaged Ehlers School Finance Team for Debt Planning & Issuance. Ehlers analyzed the various financing options for the array of projects and took into consideration the District’s capability to bond against existing revenue streams, as well as generating additional levy authority for the Health & Safety portion of the project. The new levy authority was wrapped around existing debt commitments to keep the tax rate consistent.  Ehlers educated District leaders on the ability to issue bonds using the current Capital Facilities and Long-Term Facilities Maintenance (LTFM) Program and facilitated the required submissions to the Minnesota Department of Education.

The Outcome

The District completed a multi-purpose issue using four authorities: LTFM Indoor Air Quality, LTFM Deferred Maintenance, Capital Facilities Bonds and Capital Facilities Notes. This allowed for the project funding to be completed through Board authorization while minimizing the impact to taxpayers in the District.