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West Fargo Public Schools: How will we pay for this?

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News Fargo,North Dakota 58102
West Fargo Pioneer
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West Fargo Public Schools: How will we pay for this?
Fargo North Dakota 101 5th Street North 58102

Editor's Note: This is the fourth in a series of articles concerning the West Fargo Public Schools upcoming bond referendum.

Through a strategic and facilities planning process, the West Fargo School District has deemed it necessary to build additional facilities in order to handle the growth it has encountered in the last 10 years. To help ensure the students are getting a quality 21st Century education, the district needs to provide adequate learning space for its students.


On Tuesday, May 24, residents of the West Fargo School District will be asked to express their opinions on the Long Range Facility Plan proposed by the School District by voting in the special election. The proposal includes the following:

• Construction of a new elementary school, beginning Summer 2011 and completed Fall 2012.

• Construction of a new middle school, beginning Spring 2012 and completed Fall 2013.

• Construction on an academic wing addition at the Sheyenne Ninth Grade Center, beginning Spring 2012 and completed Fall 2013.

• Construction on the gym/fine arts wing at the Sheyenne Ninth Grade Center, beginning Spring 2013 and completed Fall 2014.

• Renovation to West Fargo High School to accommodate the "ninth grade center concept."

• Additional funds to build a second new elementary school if and when it is deemed necessary.

A common concern of residents is how they will pay for these new schools, and how they can afford to operate them once they are built. This article will show you where the funds will come from and how they will be used.

The costs to build and operate these schools are broken down into two groups:

• Building or construction costs.

• Yearly operation costs

Building, construction costs

The only option to fund significant building projects in the West Fargo School District is to ask the public for their approval (60 percent approval required) to sell bonds. The funds from sale of these bonds will be used to build and furnish the new schools. The proposal seeks the approval to invest up to $82.5 million into the district's educational facilities. These funds will come from the sale of bonds that will be paid back over 20 years.

The bonds will be sold in increments with different maturity dates.  The district's bond financial advisor estimates that the interest cost will be approximately 3.94 percent. Once the bonds are sold, the district would lock in the exact interest rate. The initial bond payment is anticipated to be approximately $4.5 million for 2011-12. This will require a mill levy increase of 27.50 mills. 

The district has seen higher than normal growth during the past several years, and with that comes more homes, increased values, and a higher actual tax base. Those facts have been considered in the proposal, and the district has projected a 3 percent growth to continue. If the property tax base growth is higher than 3 percent, the actual tax amounts will be lower.

As with any loan, eventually it gets paid off. The table (Bond Issue) shows the District's current outstanding debt, maturity dates and associated mill levies for each loan.

By May 2017, more than 24.32 mills will be paid off, and another 22.59 mills in 2020.

Yearly operational costs

The School District has done an analysis and determined how to cover operational expenses without major impact to their operational budget.

More buildings require more expenses. These include more personnel, such as administrators, librarians, and secretaries, as well as additional space to heat, light, clean and maintain. The district administration has estimated expenses, and the table (Additional Expenses) shows the estimated additional expenses for the proposed schools. Once a school is fully operational, these expenses become part of the annual budgeting process.

The State of North Dakota provides several annual funding sources to the District. The increase in funding expected with the addition of the new schools, and those coming from the estimated growth in student population are outlined in the table (Resources).

Foundation aid funding is provided to the school district on a per-student amount, based upon the previous year's full-time-equivalency enrollment number. This year, the rate was $3,779 per student. As the enrollment in the school district increases, the state allocation per-student also will increase annually. Additional students provide more support from the state to educate those students.

Through a Mill Levy Reduction Grant, the state is currently providing 75 mills of property tax relief, which has been extended for another two years.

The district also has a three-mill levy called the "Special Reserve Fund," generating an estimated $500,000 a year. This levy is designed to create a pool of money to assist the district with additional costs.

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