Fall School Referendum

Owatonna School Superintendent Jeff Elstad presents the new, improved school bond referendum that will be up for a special election vote on Tuesday, Nov. 5 to the Owatonna City Council. Absentee and early voting begins on Friday, Sept. 20. (Annie Granlund/People’s Press)

OWATONNA — “We listened.”

That was the message expressed by Owatonna Superintendent Jeff Elstad as he addressed the Owatonna City Council on Tuesday night. In May, a bond referendum proposing a new high school that would have cost taxpayers $116 million failed. Since then, Elstad said that district leaders conducted listening sessions, random sample scientific community phone surveys, and other means of gathering feedback from community members to learn more about why the referendum was defeated.

“Within all of that collection, we identified five key areas that truly needed to be addressed by the school district if we were going to move forward,” Elstad explained. Those five areas included the price of the new high school, the tax impact on Owatonna residents, how the current high school would be reused or repurposed, the difference between the cost of a new school and the cost of a remodel to the current school, and a better concept of what the new school will look like and where it will be.

Tackling each of these components one by one, Elstad explained to the city council that extensive work went into addressing each of the needs that had been identified by the Facilities Task Force while also listening to the community feedback. To help address all these needs, the referendum that will go to vote on Nov. 5 will include two questions on the ballot:

Question 1: A new high school campus to be constructed for $104 million

Question 2: Repurpose the current high school site for future district and/or community use for $8 million

“We heard the community tell us that we needed to tighten our belts and take some money off the total cost of the budget,” Elstad said in reference to the $12 million decrease in the total cost to taxpayers with the new proposal. “About the first week in June we were approached by a business partner in our community who indicated that this was so important to the growth of their business that they felt they wanted to contribute the land toward this project.”

Elstad said the new school proposal has adjusted from a 1,700-student design down to a 1,600-student design. He stated that this will save money and still allow the school district room for growth beyond the roughly 1,500 high school students currently enrolled. He added that to make this student limit work, however, that the school design would have to accommodate quick and easy additions if so needed down the road.

“The large commons areas — cafeteria, commons area, gymnasium, things of that nature — are all set for a larger student body,” Elstad added, noting that those areas are set up for 1,800 students. “Mind you, that extra space is because the high school is the most used building in a community. To have a little larger space like that, we can still accommodate students during the day but we could also accommodate public events that we would have in the new high school.”

The tax impact on residents within the Owatonna School District was looked at very closely for both the two questions on the ballot, according to Elstad. While Question 2 is contingent on the first question passing, the overall tax impact of both questions passing will still equal out to less than the amount asked for in the spring referendum.

“We were asking for $23 a month,” Elstad said about the previous proposal based on the average homeowner with a $175,000 value home. “This new proposal puts us at $16.17 a month and if people were to vote yes on Question 2 it would add $1.42 a month on the same valued property for a grand total of $17.59 to address both the question of a new high school and the question of repurposing of the current high school site.”

Included in the tax impact portion of his presentation, Elstad discussed the Ag2School tax credit that has been passed by the state Legislature since the failure of the spring referendum. As a form of tax relief for farmers on existing and future school bonds, the credit will reduce taxes for owners of agriculture property for taxes payable in 2020 in an amount equivalent to 50% of the taxes attributable to school district debt service for all agricultural property except for the house, garage, and one acre. The State is phasing in an increase to the credit, bring it to 55% for taxes payable in 2021 and 60% for taxes payable in 2022. Taxes payable in 2023 and later receive a 70% credit. This credit is directly deducted from property taxes statements and is included in the tax impact estimates.

To address the public’s concern with what will come of the current Owatonna High School, Elstad described a couple potential options to the city council. One possibility would be to move all the district offices to the “C Plaza” area of the school and sell the site on Rose Street. He discussed retaining the gymnasium to allow opportunity for community use and retain the area that contains the museum and the recently established Halls of Fame.

“Some parts will still have to come down,” Elstad added, noting that residents in the surrounding area of the current school shared a lot of worry over what would happen if the building was simply demolished and the site was sold.

Included in the possibilities of repurposing the current high school, Elstad said that the current vocational and agriculture building could be used as a maintenance shop for the district. He also stated that the school district would be interested in partnering with the City of Owatonna to take the green space on the south end of the campus and perhaps the current stadium and turn it into a potential park.

“This is just one concept that the community can explore, the final design would be made with collaboration with the community,” Elstad said. “We were simply requested by the community to share what we are thinking.”

Naturally, Elstad shared a list of different things that will be included in the new school. The proposed new school would be a 300,000-square-foot building designed to accommodate 1,600 that includes 70 classrooms, labs, and shops outfitted with modern technology to support learning. There would be a flexible media center, a four-court gymnasium, a 900-seat auditorium, on-site parking with a minimum of 1,000 parking stalls, and modern career education spaces with updated vocational labs with modern industrial equipment. Elstad said that a potential design could also include, among many things, a greenhouse that would aid in agricultural science instruction. The cost of the building bond includes all the landscaping, furniture, and other miscellaneous items that have all being figured into the cost.

“What you are seeing is what we believe is the worst case scenario,” Elstad said to the council regarding the sticker price. “We had to set our budget for the project at 3.8% interest rate and what we are learning is that bonds that recently have been sold are selling for much less than 3.8%, some as low as 3%.”

After Elstad answered a few other questions regarding some of the details that could be included in various classrooms, council member Kevin Raney hinted that the city council’s own tax levy could have a positive impact on how people view the upcoming school referendum.

“Last year we dropped our levy below tax capacity rate. The intention this year is that we are going to do the same thing. Therefore if your property value does not increase you will actually see a decrease in your taxes,” Raney stated. “While we always want our property values to go up, I think our city is recognizing that there are other entities in this community that we need to be aware of.”

Raney also asked Community Development Director Troy Klecker his opinion on the economic impact that a potential new school would have on Owatonna.

“Business right now is doing very well which is why I think you are seeing businesses quickly run toward this project,” Klecker stated. “It probably was not the case 10 years ago and it may not be the case 10 years from now, but they’re seeing that putting an investment in the schools will help them grow and be successful.”

Klecker added that the city works closely with businesses and developers outside of Owatonna who are considering coming into town, noting that more than one are closely watching what happens with the upcoming school referendum. He said that they are looking to see what kind of investment the Owatonna community is willing to take in education, which is something that businesses and developers value.

“If you’re asking me the impact, there is probably no bigger impact to economic development in our community than this,” Klecker said. “We don’t have any tool or strategy that would be more impactful than a new high school.”

Elstad instructed those looking for any and all information about the upcoming referendum to visit OwatonnaProud.org or call (507)444-8650. There will be a public information meeting on Oct. 3 beginning at 6 p.m. at the Owatonna High School. There is also a schedule for Coffee and Conversations with Superintendent Elstad on the district referendum website. Elstad noted that any group that is interested in having someone from the district present the referendum is invited to call the district office.

Election day is Tuesday, Nov. 5, but absentee and early voting begins Friday, Sept. 20. Absentee and early voting is available at the Steele County Auditor’s Office or can be downloaded online and mailed to 630 Florence Avenue, Owatonna. Polls will be open from 7 a.m. to 8 p.m. on Nov. 5.

Reach Reporter Annie Granlund at 444-2378 or follow her on Twitter @OPPAnnie.

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