Residents within the Rochester Public School District are voting early now at the Edison Administration Building or will cast ballots on Election Day, Nov. 5, at a polling place. The ballot has two questions, both of which authorize the School Board to borrow money for the construction of new schools and remodel existing spaces, plus increase safety and security district-wide.
My role is finance director for the district, and I want to share information about our finances that sometimes get overlooked.
The district has a credit rating, just like an individual has a credit score. The district's current credit rating is AA with a stable outlook. S&P Global Ratings assigns this rating. It is a rating that other public school districts want and indicates the district can meet its financial commitments. Our rating reflects S&P's view of the district's location within a strong economic base; a trend of growing enrollment; strong financial reserves with good financial management practices and policies; and a low overall debt burden.
In other words, the district is in good shape to take on new debt payments. On Feb. 1, 2020, the district will make its final payments on Century High School and Riverside Elementary School. The first payment for this referendum, if passed, would be due on Feb. 1, 2021. This means there will be no overlap on property taxes between Century and Riverside and the new schools.
Interest rates are at historic lows right now. There is potential that the referendum will cost less than what the district has predicted -- $48 annually on a $200,000 home if both questions are approved. If that does happen, the savings will benefit property taxpayers through lower taxes.
Over the last ten years, the School Board has minimized property tax increases by expenditure management. In two out of the previous 10 years, school district taxes have gone down, and one year it was the same as the previous year. In the years that taxes have gone up, it has been voter-approved (like the 2015 operating referendum) or due to growth in student numbers. The formulas within the property tax levy are calculated based on the number of students or approved expenses. Laws written by the Legislature and enforced by the Minnesota Department of Education dictate the amount of property taxes that a school board can collect unless voters approve a higher amount. Unlike cities and counties, there is very little the School Board can do to raise taxes without going to the voters and asking for more money.
Some people have asked me how the district will be able to operate the new school buildings because the new schools will need staff, utilities, and supplies. In our studies with the Facilities Task Force, we determined enrollment will grow by another 1,200 students in the next five years. By the time we open the new buildings, we will have more students. More students will bring more state aid payments for operating expenses.
The upcoming referendum is essential, but so is proper management of our finances and facilities. The School Board and administration will continue to manage resources entrusted by the taxpayers carefully. I encourage you to become informed of the referendum.
Go to www.rochesterschools.org/referendum