School Board puts referendum on ballot
The Frazee-Vergas School District is working to make a few large decreases in spending, thus saving the taxpayers some money.
Not only is the district asking for a referendum on the November ballot that will drop the excess operating levy from the current $1,000 per pupil to $700 per pupil, the district is also planning to refinance two bonds from 2004 that will save $27,000 a year in interest over five years.
At Tuesday's school board meeting, the board approved a referendum resolution for the 2012 election ballot and a resolution authorizing the sale of current refunding bonds to refinance two 2004 bonds.
Referendum on ballot
The big hurdle for the district will be the wording on the ballot. Since the district will be asking for a $700-per-pupil referendum, it is required to say on the ballot that it is a tax increase. The district has one year left on the current $1,000-per-pupil referendum though, so going from $1,000 to $700 would technically be a tax decrease.
But legally, it must say it's an increase.
The board plans to hold public meetings throughout the district to inform votes that it's instead going to be a decrease from the current referendum.
Superintendent Chuck Cheney said that the referendum committee will have a plan in place by the next board meeting (Sept. 10) on how to approach the public with the referendum information.
In the approved wording for the ballot, a paragraph explains that the $1,000-per-pupil referendum will end at the end of taxes payable in 2012, and the new one will begin after that for five years.
On a $100,000 house (taxable market value) in the district, current taxes are $224 for the school district. With the proposed $700 referendum, taxes would be $149, a difference of $75. On a $200,000 house, those numbers would be $447 in current taxes, $299 with proposed referendum, with a savings of $148.
With five years left on two bonds, the school district is looking to refinance them and save a substantial amount thanks to decreasing interest rates.
In 2004, the bonds were at about 3.4-3.8 percent on $5.9 million. Now, with refinancing on $2.7 million left on the bonds, the district can get about a .9 percent interest rate.
That refinance, which the board will approve next month, will save the district about $27,000 a year in interest and $137,880 in total savings.
This month the district called for bids on the refinance, and next month it will award the sale to the lowest bidder.
Follow Pippi Mayfield on Twitter at @PippiMayfield.