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Menahga voters concerned about tax increase due to referendum

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news Park Rapids, 56470

Park Rapids Minnesota PO Box 111 56470

Tuesday, Nov. 3, the voters of Menahga will head to the polls and decide the fate of an $8.5 million school expansion project.

But Thursday night's public hearing raised a lot of "what ifs?"

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What if state budget cuts continue and what if the citizens can't afford more tax increases, how can this new project be maintained?

"I'm concerned because the economy is getting worse," said Dan Rippentrop of Menahga.

The proposed building expansion would include a three-station gymnasium in an activity center with a commons area, a wrestling room, cardio and weight room, storage and locker rooms.

The activity center wing would also be open to the public for events, or as a wellness club, said architect Leo Grobe.

The elementary would gain seven additional classrooms to accommodate increasing enrollment numbers.

Menahga resident Jon Kangas said since the school has been growing and "getting by" with one gymnasium and the multipurpose room right now, why add all of the other amenities?

"Maybe that's a little more than you need and you can afford," he said.

The Menahga School Board is planning for the future, said superintendent Mary Klamm. The activity center can easily be converted to high school classrooms if needed.

In 2000, the school board proposed a $6.7 million expansion that voters didn't approve.

To avoid having to come to the voters again in the future, the board is proposing the current expansion.

"Coming to you in these economic times was not an easy decision," said board vice chair Jody Bjornson.

Crowded classrooms

The Menahga School District has been growing in the past few years and is expected to gain 100 more students in the next five years.

Open enrollment for 2008-09 totaled 12 percent of the student population, which brought funding to the district, Klamm said.

This year, 773 students are attending Menahga School.

By gaining students from open enrollment in 2008-09, the district was able to receive about $500,000 in funding, Klamm reported.

But accommodating the students has been an issue. Closets have been converted to classrooms with no windows or storage space. Conference rooms are now combined with other offices. The wrestling room is used for physical education. And the gymnasium is overcrowded with students from different class periods there at the same time.

"I just think that it's time in Menahga to take our students of special ed out of the closets," Klamm said.

Physical education teacher Isaiah Hahn told the public Thursday the whole point of gym class is to get students used to an active lifestyle and get their heart rate up.

"It's tough and very, very difficult if you don't have the facility to get the kids moving," he said.

Tax impact

The maximum bond the school board would have to levy for is $8.5 million. But building costs are down in the current economy, which means bids may come in significantly lower than expected, therefore the total levy would be less.

"Prices are coming really, really good," Grobe said. "If you want to build, I suggest you do it now."

Financial advisor Gary Olsen of Ehlers and Associates presented two options to finance the project. The first is a conventional 25-year bond with an interest rate close to 5 percent.

The second is a Qualified School Construction Bond, a federal stimulus program that allows the school to borrow without interest. That bond would have to be paid off in 15 years.

The Menahga district is now fourth in line to get allocations for QSBC.

On a $100,000 house, with the conventional bond, $134 would be the tax increase per year, Olsen said.

On the same property, with the QSCB, $145 would be the payment each year for 15 years as opposed to 25.

Under the Minnesota Property Tax Refund or the "circuit breaker," some property owners may be eligible for tax refunds, but income restrictions apply.

Another program - the Targeted Homeowner Property Tax Refund - credits a portion of taxes paid in the first year of a new referendum levy.

To determine eligibility for both programs, residents are asked to fill out the state tax form M1-PR.

For senior citizens with household income of $60,000 or less, an option to defer a portion of the property taxes on their homes is available.

Forms and information on the Senior Citizen Property Tax Deferral Program are available at www.taxes.state.mn.us.

Those who would like to determine the amount of tax they're obligated to pay because of this project, may contact Ehlers and Associates at 800-552-1171 and ask to speak to an education team member.

If citizens vote no

Klamm said that if the referendum doesn't pass, the school district would have to cap open enrollment because the building is beyond capacity.

"It doesn't solve our problems, it just delays them," she said.

The board would also have to be in compliance with the Americans with Disabilities Act by installing elevators.

Additionally, the building will need more exits for fire safety, she said.

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