Stillwater Area Public Schools (SAPS) taxpayers can expect a decrease in their 2020 property taxes.

The school board unanimously certified the maximum proposed 2020 tax levy at the Thursday, Sept. 26 school board meeting.

SAPS Finance Director Kristen Hoheisel said certifying the maximum levy offers the board and district the greatest flexibility. According to state law, the school board can decrease the final tax levy in December, but can not increase the levy. The Truth in Taxation hearing, where residents can comment on the tax levy before final approval, will be 6 p.m. on Dec. 12 at Stillwater City Hall, located at 216 Fourth St. N. in Stillwater.

The 2020 preliminary general fund levy totals $27,426,251, more than a $1.5 million decrease over 2019 taxes. This number includes the addition of funding an expansion to Brookview Elementary through a Certificate of Participation (COP), which the board can remove before approving the final budget in December.

The total preliminary 2020 levy is $38,723,648, about an $1.12 million decrease over the 2019 total.

The preliminary debt service levy totals $10,332,401, a slight increase from the 2019 debt service levy of $9,940,886. The preliminary 2020 community service levy is $964,995, a slight increase over the 2019 community service levy of $940,576.

The school board also voted 4-3 to secure funding for the expansion of Brookview Elementary through a COP upon certification of the final 2020 property tax levy with the increased levy amount for the COP. If the board chooses, it could remove the COP before finalizing the budget in December.

Directors Tina Riehle, Sarah Stivland and Liz Weisberg were the dissenting votes in including the Brookview expansion in the preliminary levy.

District financial advisor, Matt Rantapaa of R.W. Baird and Company, said the COP lease levy would cost the district $476,244 annually or $5.775 million for a 15 year term with level annual payments. The COP would incur about $2 million in interest, Rantapaa said, bringing the total cost to $7 million.

Recent data from the county assessor’s office showed the district’s tax capacity will increase substantially — making the addition of a COP to expand Brookview Elementary essentially tax neutral, Hoheisel said — due to new construction and increased property values throughout the district.

If the board passes the final 2020 budget with the COP, the annual property taxes of the $300,000 home will decrease 11.97%, with $981.48 as the preliminary total for that home’s 2020 property taxes.

Without the Brookview Elementary COP, the property taxes for a home with a market value of $300,000 would decrease 13.09%, with preliminary $968.99 payable 2020.

The previous board voted to expand Brookview in November 2018 to alleviate overcrowding issues at the elementary. At the March 21 school board meeting, the current board approved a motion to postpone voting on a funding mechanism to expand Brookview Elementary until after the Community Design Team made a recommendation to the board.

Director Mark Burns amended the original motion to approve the COP with the stipulation that it be approved with the approval of the final levy in December. He added that gives the board the option to fund an expansion should the Community Design Team be ready to provide a recommendation about the district’s future facility needs. The board’s deadline to submit a preliminary levy to the Minnesota Department of Education was Sept. 30.

“If we do not include this amount...we will not have the opportunity to include that in our final tax levy,” Burns said. “By December, we may have answers. We may have directions.”

Riehle said the motion went against the board’s action in March to wait for the Community Design Team’s recommendation. Pearson, Riehle, Stivland and Weisberg said they were concerned the approval of a potential COP could interfere with the Community Design Team process.

“They need to have the opportunity to complete that, uninterrupted,” Riehle said. “The action was not whether or not [the COP] was tax neutral.”

Stivland and Weisberg said expanding Brookview does not solve overcrowding throughout the district. Most elementary schools have a wait list for preschool, Stivland said, and in coming years, Lake Elmo developments will likely bring in more than 700 additional students to the district.

“We’re growing really fast and everyone can see that,” Stivland said. “I believe that exactly what we’re going to need is another building.”

Weisberg said she does not support a COP because it undermines the work of the Community Design Team.

“I don’t want to make another tax for taxpayers without their input,” Weisberg said. “It doesn’t include the community and it doesn’t sufficiently solve the problem.”

Pearson said the decision felt rushed. Director Jennifer Pelletier disagreed.

“This community has been waiting since 2015,” Pelletier said. “To say this is a no-brainer is the understatement of the decade.”

Ptacek said adding the COP could provide tax rate stability for the district, while alleviating issues for teachers and students at Brookview.

“The longer we wait on these solutions too, the more people are going to look for alternatives,” Ptacek said.

Burns added that borrowing rates are near historic lows and the economy is strong.

Regardless of whether or not the final 2020 levy includes a COP to fund an expansion of Brookview Elementary, Hoheisel said there will be future school boundary changes.

“The longer we wait for any decision, the greater likelihood that we’re going to be doing many iterations of boundary changes just because we are going to have to start reacting to the growth in the south,” Hoheisel said.

Additional Notes:

- The school board approved the 2018-2019 Financial Report, which the district’s annual audit is based on. Representatives from Malloy, Montague, Karnowski, Radosevich & Co. Public Accountants issued an unmodified opinion on the district’s basic financial statements. The district is required to submit an annual independent financial audit to the Minnesota Department of Education.

The audit found four compliance issues with internal control and compliance reports. The student activity audit found 5 of 40 cash receipts were not deposited in a timely matter.

Additionally, the district ended the 2018-2019 financial year with a 5.5% unassigned fund balance.

-The board decided not to enter into an updated $15,000 contract with Teamwork’s International to conduct a demographic, enrollment and housing analysis.

- The school board also heard a report on the results of a community survey conducted b the Morris Leatherman Group. The group surveyed 400 district residents through a random sample phone survey. The survey results include resident opinions on quality of education and community support for future referendums.

Contact Kim Schneider at kim.schneider@ecm-inc.com

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