Frequently Asked Questions

Absentee ballots:

• For residents wishing to vote early, an absentee ballot application can be obtained by mail by applying online at the Secretary of State’s website or here.
  • Completed applications can be dropped or mailed to:

Byron School District Office

Attention Deb Brown, Elections Clerk

630 1st Ave, NW

Byron, MN 55920

• Absentee ballots will be available March 27, 2020.

Date of Special Election:

May 12, 2020

Combined Polling Place: Emergency Notice of Polling Location Change

Byron Middle School

601 4th Street Northwest

Byron, MN 55920

Time:

7 am - 8 pm

Shall the School Board of Independent School District No. 531, Byron, be authorized to issue general obligation bonds in an amount not to exceed $58,090,000 to provide funds for the betterment of school facilities, including improvements for accessibility and safety at Byron High School; the addition and equipping of classrooms, an auditorium, forum, gymnasium space, and athletic facilities at Byron High School; updates to Middle and Intermediate School kitchens and Middle School athletic facilities; improvements to transportation facilities; and the renovation of facilities for Community Education and Early Childhood Programs?

Byron School District’s May 12th bond referendum related to the District’s facilities will go forward as scheduled unless it is canceled or postponed by State or Federal authorities. The District is committed to ensuring that residents can cast their ballots while complying with coronavirus-related guidance. Information will be distributed about efforts to help keep voters safe at the District’s polling place, but voters are encouraged to consider voting by mailed absentee ballot. Absentee ballots are available now, and more information is available here.

In compliance with COVID-19 directives, public meetings about this referendum have been canceled. The District will re-schedule public meetings about this referendum if it becomes possible to do so. Even if the District is not permitted to conduct public meetings, the District intends to make sure that voters have accurate factual information about the referendum through online meetings, public telephone conference calls, and other formats.

The District appreciates the community’s commitment to safely casting ballots in this referendum and welcomes thoughts or suggestions on how best to inform voters and ensure that voters can cast their ballots.

Over the past year and a half, the district engaged with community members to examine the district’s schools, building capacity, adequacy of educational spaces, and student enrollment. That process identified areas where the district has opportunities to update current facilities and programs to accommodate growth and plan for the future.

Based on this work, a number of areas were identified:

Enrollment Growth and School Capacity

Enrollment in the District increased by 425 students between 2007 and 2017. An enrollment study determined that growth in the district will likely continue, with up to 462 more students by 2027.

Byron High School and Byron Primary School are currently operating near capacity. According to these enrollment projections, the high school will be operating over capacity by 2021. At Byron Primary School, the District’s early childhood education programs are growing. If this bond referendum is approved, the district will construct additional classroom and educational spaces to accommodate this increased enrollment without increasing class sizes, using temporary facilities, or taking other steps to safely accommodate this enrollment.

Additional and Renovated Spaces

Many classrooms and labs in the district’s High School are outdated and undersized for projected enrollment. If this bond referendum is approved, the district will update classrooms and educational spaces with the infrastructure to support equipment and technologies for today’s school programming. In addition, the district will add classrooms and educational spaces for student collaboration areas and project-based learning.

Byron High School (2006) was also constructed without an auditorium. A portion of the bonds from this referendum will go towards constructing a space for presentations, performing arts, and additional educational opportunities. This includes the auditorium itself, as well as seating, lighting and sound spaces and equipment, restrooms, and classroom space.

Byron Middle (1966) and Byron Intermediate School (1992) kitchens and cafeteria are outdated and undersized for current enrollment, with kitchen equipment that is operating beyond its service life. The updates to these areas that would come from passage of this referendum would replace and add cooler/freezer spaces, more efficient serving lines, improved dish washing room, dry food storage, and increase efficiency to meet the demands of increased student enrollment.

Athletic fields were not built with the High School in 2006. As a result, the district’s High School athletic teams practice and compete at Byron Middle School, which creates additional transportation costs and supervision challenges. A portion of these bonds will go towards constructing athletic fields and facilities at the High School to eliminate these transportation costs, improve conditions for student-athletes, and reduce supervision challenges.

The District Administrative Services Center (DACS) was constructed in 1952. A portion of this building is leased out to Zumbro Education District until 2022. If the referendum is approved, the building would be renovated to create dedicated space for Community Education and serve the District’s growing Early Childhood Programs. This would consolidate all of the early childhood programs to one location and free up classrooms at the Byron Primary School (2016).

If the proposed bond issue is approved by voters, the district anticipates receiving state aid to offset the cost to local taxpayers through two separate state programs.

The Debt Service Equalization program, which began in 1993, offers state aid to certain school districts (about 10%) to help them repay debt used to construct or renovate school buildings and other facilities. This aid is intended to help offset or “equalize” variations in school district property taxes due to districts’ varying levels of property wealth. Byron is one of the districts that qualifies for this aid. If the voters approve the bonds, the bonds would be repaid over 20 years, through a combination of state aid and local property tax levies. The district estimates that state debt equalization aid will finance approximately 42 percent of the debt service payments on the bonds over the 20 year period.

The School Building Bond Agricultural Credit (sometimes called the “Ag2 School Credit”) is a newer program. The State initially approved this credit in 2017, and then approved a substantial increase in the credit in 2019. It reduces the taxes on agricultural land and buildings for all school district bonds. For taxes payable in 2021, the credit reduces taxes for owners of agricultural property in an amount equivalent to 55% of the taxes attributable to school district debt service for all agricultural property, except for the house, garage, and one acre. This credit is directly deducted from property taxes owed and applies to debt service levies for all types of existing and future bonds for construction and renovation projects. For taxes payable in 2018 and 2019, the credit was equivalent to 40%.

The State is phasing in an increase to the credit: it was 50% for taxes payable in 2020, and it will be 55% for taxes payable in 2021, 60% for taxes payable in 2022, and for taxes payable 2023 and later the credit will be 70%. The credit is paid through an open and standing appropriation, which means that no action by the Legislature is required each year for this credit to be paid from the state general fund. The credit is automatically deducted on the tax statement and is included in the tax impact estimates provided by Ehlers.

As noted in the next section, these two programs together are anticipated to decrease the cost of the proposed bond to local taxpayers.

Additional school building bond referendum information can be viewed here.

First and foremost, debt equalization aid is state law funded with an open and standing appropriation, like most other education aids. It would require legislative action to change it. Debt equalization aid has been in the statutes for many years.

If the District receives debt service equalization aid, that aid is received as the debt comes due. It does not pay for up front construction costs. Therefore, construction could move forward following a successful election, regardless of a State revenue shortfall this year. In order to secure debt service equalization aid payments to offset the taxes payable in 2021, under existing law, the district will need to sell bonds by June 30, 2020. Property taxes are levied on the annual debt payments, so the construction phase is in advance of the receipt of most of the District’s debt equalization aid.

Further, Debt Service Equalization Aid is based on the districts’ property value per pupil as well as the size of the qualifying annual debt payments. If the property value per pupil increases, the percent of aid will decrease. If the property value per pupil decreases, the percent of aid will increase. The two factors affecting this are the number of students and property valuation. As these two numbers change, the percent of debt aid will fluctuate.

Also, there are three tiers of aid. Which tier the district’s debt payments fall in depends on the amount of the qualifying annual debt payments. Aid will decrease at the point that annual debt payments become sufficiently lower. Ehlers has accounted for this in the district’s projected debt plan and tax estimates.

The bond structure used is a “wrap around” structure, which is commonly used when an issuer has existing debt. The concept is simply to keep annual taxes lower while the district is making payments on existing debt. It is a way of keeping the annual levy on total debt service lower while the district is still making payments on previously issued bonds. It also moderates the tax impact over the term of all the district’s bonds and levels it off resulting in more predictable and manageable annual debt levies. It is prudent for the district to consider all their debt when structuring new bonds, to effectively incorporate the tax impact on residents of new debt while also considering the tax impact of existing debt on those same residents. Likewise, the district considers the tax impact on current residents, as well as future residents, given that the school facilities being proposed are a long term community asset to be used for public education in the community for decades.

With that in mind, a wrap around structure has the benefit of a lower tax impact on current residents. It also spreads more of the tax impact of the proposed bond to future properties which results in a moderating affect due to future economic and inflationary property valuation growth in the community. It also provides a structure whereby future property owners and families pay a share of the district’s total debt in the same manner that current residents are paying.

Sufficient funding is not available to address all the improvements being proposed in the bond election. Not only are funds limited, but the use of funds such as Long-Term Facilities Maintenance Revenue (LTFM) and Operating Capital is limited and the proposed projects exceed the allowable uses of these funds, as well as the availability of these funds.

The 2015 Legislature created a new program to support facilities maintenance needs for school districts. LTFM is a per-pupil, formula-driven revenue source that replaces health and safety revenue, alternative facilities revenue, and deferred maintenance revenue beginning with fiscal year 2016-17. The district is using LTFM and other district funds on deferred maintenance projects.

There is limited funding available to address the referendum objectives and if used, the projects do not qualify for debt service equalization aid.

Yes.

• Minnesota Homestead Credit Refund
• Special Property Tax Refund
• Senior Citizen Property Tax Deferral

Additional school building bond referendum information can be viewed here.

Yes. Ehlers, the district’s independent municipal advisor has prepared more information regarding how the district’s proposed referendum may affect property taxes. Learn more here.

The School District proposes to obtain financing for the project from the sale of General Obligation School Building Bonds, pursuant to Minnesota Statutes Chapter 475. The District will seek voter approval of a single bond ballot question in an election on Tuesday, May 12, 2020. If approved, the ballot question would authorize the issuance of up to $58,090,000 in bonds. The net underwriter’s discount and costs of issuance are estimated at $630,839. Since the first interest payment, estimated at $1,016,575, will be due in fiscal year 2021, bond proceeds will be capitalized to make this payment.

The difference between the amount requested to be authorized by the voters (plus estimated interest earnings in the construction fund of $658,497) and the estimated costs of issuing this debt (including capitalized interest) is $57,101,083, the amount the District expects to need for the proposed construction projects.

Ehlers, the district’s municipal advisors, have prepared the following schedules and includes:

• Estimated sources and uses of funds for the proposed bond issue
• Estimated debt payment structure for the proposed bond issue, including principal and interest payments and annual debt service property tax levies after accounting for the 105% levy requirement (the district is expected to qualify for debt equalization aid)
• An analysis of the estimated tax impact on various values of residential, commercial, agricultural, and seasonal recreational properties for the proposed bond issue

The finance schedule can be reviewed here.

Additional school building bond referendum information can be viewed here.

There are many factors that are not within the district’s control and cannot be accurately projected or predicted that will change over time that will affect your property taxes. As such, future estimates of tax impact on your property may not be reliable. The bonds will be structured in a manner that will establish a steady and consistent tax rate for the first 14 years with a decrease after that, based on current factors and conservative estimates. The tax information provided is the best estimate currently available on how the issuance of the proposed bonds will impact your taxes in future years.

No. The tax estimates have already accounted for debt service aid and the recently added Ag2 School Credit.

No. The proposed bond amount does not change with state aid. Ehlers has provided the finance schedules for the proposed bond which includes the estimated 42% debt service aid. The state aid is applied to existing debt and new debt and does not reduce the proposed bond amount.

The existing debt falls into three different aid tiers. A portion is unaided, a portion is aided at roughly 5.5%, and a portion at 47.7%. While the district has existing debt, new/proposed debt would qualify in the 47.7% aid category. Once the existing debt is paid off, a portion becomes aided at 0%, a portion at 5.5%, and a portion at 47.7%. Add to that is the projected changes to the aid percentage over the years as a result of the annual adjustment to the state equalization factor, the district’s annual property valuation growth, increases, and decreases in student enrollment, all of which impact debt service aid.

The cumulative effect over the term of the bond is an estimated aid amounting to 42% for the proposed debt service. The dynamics of the three different aid tiers, and the impact on both existing and proposed debt, future changes to the various factors impacting aid percentages, along with the restructuring of the annual maturities resulting in a stable and level tax impact over the bond term, results in an increase that is significantly greater than just the 42% projected aid IF the district did not qualify for any debt aid.

Ehlers has provided a calculator to estimate tax impact.

Ehlers is an independent municipal advisor, and will not submit a bid to purchase the bonds. Ehlers has a fiduciary duty to the district as an advisor and they do not purchase bonds, nor do they represent the purchaser of our bonds. Rather, Ehlers will conduct a competitive sale of the bonds by soliciting proposals from any qualified underwriter in the country. Ehlers would advise on the financing options and structure, and conduct the bond sale on the district’s behalf. For a bond issue of this size, Ehlers typically receives 6 to 12 bids for purchase of the bonds.

Through a public process and several community meetings, the Community Facilities Task Force provided input and information about which projects are most important to the school district. These are the projects that the bond is meant to address. If the referendum does not pass, the District would need to find other ways to address these facilities and equipment issues.

One option would be to address the most critical issues using general operating funds, which normally pay for classroom instruction, teachers, staff, and supplies. The district may need to consider changing or eliminating programs for students, eliminating or reducing technology and equipment purchases, imposing or increasing fees for extracurricular activities, and other budget decisions. Some maintenance and repair work would have to be deferred, and most school renovation projects would be postponed indefinitely. If student enrollment increases as projected, the district may need to consider changes to class sizes or adding space in temporary classrooms.

No. It does not matter what attempt the bond election passes, Byron is eligible for debt equalization aid when the district issues voter-approved bonds. Byron would get the same aid eligibility regardless of how many elections it takes to pass. However, depending on positive or negative enrollment and community tax capacity can lower/increase the level of aid.

The Byron School District welcomes students from multiple Minnesota school districts who call Byron schools home. We welcome their contribution to our high-performing community of learners. Statewide enrollment options, informally known as Open Enrollment, is Minnesota’s public school choice option that allows students and parents to have access to schools that are not within their resident district. This program allows student enrollment from one school district into another.

Open Enrollment revenue has enabled the District to reduce class sizes throughout the system. Some people may think that a non-resident student who is added to a classroom increases the class size, but the reality is that the money generated by Open Enrolled students allows the District to reduce class sizes, and it assures that each classroom is efficient in terms of the number of students. Class sizes could be dramatically higher without Open Enrollment students than they are now unless we passed operating referendums. If there is not room in a particular class, the District denies the application for Open Enrollment and places the student on a wait-list.

In the 2019-2020 school year, Byron receives $7,753 per student. However, the average per-student funding for Minnesota school districts is $9,277. Our district receives 16% less than the per-student average in Minnesota. In fact, Byron schools are one of the lowest general-funded schools in Minnesota.^^

Districts primarily generate revenue through basic general education, categorical programs, the local optional revenue (LOR) program and through an operating referendum. The aid for both the LOR and operating referendum revenue sources is based on formulas that use resident pupil units. The number of open enrolled students, both in and out, impacts the total referendum and LOR revenue generated, but the aid/levy mix does not change as a result of open enrollment. In general, major components of the district’s operating revenues are affected by open enrollment as more students generate more revenue. Conversely, for students who opt-out, the district loses revenue.

The added revenue of increased enrollment has enabled the District to achieve the financial base to competitively pay staff, increase academic programs and support services for students and up until last year, we avoided major budget adjustments so commonly seen in districts - which we have corrected. Byron Public Schools would be a vastly different place without this Open-Enrollment revenue.

More information can be found here.

Yes. Debt Service Equalization Aid is intended to help offset or “equalize” variation in school district property taxes due to districts’ varying levels of property wealth. Byron is a district that has lower property wealth per pupil (total property value of the district divided by total adjusted pupil units) and higher voter approved debt for capital projects are eligible for aid. As the number of students served increases, including open enrolled students, property wealth per pupil is reduced, as there are more students to spread the total value. As property wealth per pupil is reduced, the level of state aid increases in Byron.

In fiscal year 2019 Byron Public Schools served 414.68 open enrolled opt in students, which lowers the property wealth per pupil. This is measured against the state average adjusted net tax capacity to determine aid. The debt levy that qualifies for the equalization program must exceed 15.74% of a districts’ tax base each year. Currently, Byron has sufficient debt payments that exceed this local effort and therefore qualifies for debt equalization aid.

With the passage of the proposed $58 million bond issue, a greater percent of Byron's debt payments will qualify for aid. As a result, the number of open enrolled students has a notable impact on the amount of debt equalization aid the district will receive. A loss in debt equalization aid results in a corresponding increase in debt service taxes, given that the principal and interest payments on the existing debt remains constant.

ESTIMATED DEBT EQUALIZATION AID EXAMPLE

Yes. Districts primarily generate revenue through basic general education, categorical programs, the local optional revenue (LOR) program and through operating referendum. The aid for both the LOR and operating referendum revenue sources is based on formulas that use resident pupil units. The number of open enrolled students, both in and out, impacts the total referendum and LOR revenue generated, but the aid/levy mix does not change as a result of open enrollment.

In general, major components of the district’s operating revenues are affected by open enrollment as more students generate more revenue. Conversely, for students who opt-out, the district loses revenue.

ESTIMATED OPERATING REVENUE EXAMPLE

FY19 Open Enrolled In Adjusted Pupil Units (APU) 414.68

FY21 Basic General Education Formula Allowance 6,567.00

FY21 Other Categorical General Ed Amount 1,290.77

FY21 APU 2,462.40

All residents of the district are affected by this bond. Some of the bond funds will go towards facilities for Community Education programs, which are not limited to traditional school-age students. In addition, district facilities are public buildings and are often used for non-school community events. All residents of the district may be impacted by the tax changes related to these bonds.

In March of 2017, an enrollment and facility report (reviewed 2018) was provided to the District which included the most recent enrollment projection study. A priority for the past two years has been to continue implementation of a facilities plan which began discussions of new and renovation of existing facilities.

Beginning in 2018 Byron Public Schools began to organize and prioritize key objectives with a District Operational Plan (DOP). The District’s DOP identifies the strategic initiatives and improvement projects being implemented or understudy to facilitate improvement and innovation across the district. The projects included in the DOP are directly or indirectly connected to the district’s communicating information, strengthening our educational programs, supporting district policy and goals, and enhancing collaboration and partnerships.

In September 2019, the District urged all residents to participate in a district-wide effort as they prepare to make important decisions about future facilities and prioritize projects with a community survey. The survey asked residents to weigh in on additional classroom space at the high school as well as updating and/or adding support spaces including an auditorium, athletic fields, and additional physical education spaces. In addition, the survey wanted to know citizens’ opinions on updating the middle school kitchen, renovating the DACS building and purchasing land for future District facilities.

During the months of December 2019 and January 2020, the District held a series of public Community Facility Task Force meetings for business owners, landowners, community and parents, and staff to bring forward proposals for the Board to discuss and consider.

In addition to the Community Facilities Task Force meetings, the discussions have taken place at Board meetings and the district’s Finance and Facilities Committee meeting. Lastly, the District has scheduled a series of community meetings to share more information with the public.

No. The survey indicated support to pursue a referendum. The survey gathered data to determine the community’s tax tolerance to assist in determining the amount of a bond and about 25% of respondents indicated that more information was needed. Through a public process and several community meetings, the Community Facilities Task Force (CFTF) provided input and information about which projects are most important to the school district. These are the projects that the bond is meant to address.

At several meetings, two financing opportunities for the district were shared. The Debt Service Equalization and the Ag2School tax credit. Tax tolerance information was discussed throughout the process. These two programs together decrease the cost of a proposed bond to local taxpayers. Through these meetings, a recommendation was presented to the Board that took the entire process (survey and public meetings) into account.

The project costs were derived by identifying the exact size of each space to be added. A preliminary drawing was then created, so the construction challenges of each project could be identified. The costs of each project were then calculated using a combination of square foot costs plus costs for utilities, site work and other construction needed to complete the work.

Yes. The operation costs will need to be calculated and integrated into the future district budgets. The construction costs have had a preliminary review by the district’s construction manager.

Yes. The district will follow the statute regarding the uniform municipal contracting law (MN Statute 471.345).

The district believes it is important and will always encourage maximum use of school facilities and equipment by community groups and individuals.

Enrollment in the District has increased by 425 students between 2007 and 2017. An enrollment study conducted by Hazel Reinhardt reported that growth in the district will continue, with up to an estimated 462 more students by 2027.

The history of enrollment contains several patterns with implications for future enrollment. First, kindergarten class size increased in the past ten years. With the exception of 2014-15, kindergarten has been larger beginning in 2012-13. The 2019-20 kindergarten class is unusually large. The trend since 2012-13 suggested that the kindergarten class is likely to increase in size for at least a few years, this has been accurate through this current school year and in future years.

To better understand resident enrollment change, it is important to understand the components of change. Like all population change, school enrollment change results from two different phenomena—natural increase/decrease and net migration. The difference between the size of the incoming kindergarten class and the previous year’s Grade 12, called natural increase or decrease, measures the change in past birth numbers or cohort change. For example, the Baby Boom (1946-1964) and the Baby Bust (1965-1976) set in motion cycles of rising and falling enrollment that are reflected as natural increase/decrease.

The other phenomenon affecting school enrollment is migration and indirectly derived estimates. Migration is the term used when people move across a boundary or border, in this case, the school district boundary. Net migration is calculated by the progression from grade-to-grade of public school students. For example, public school Kindergarten students are moved to Grade 1 in the following year, Grade 1 students to Grade 2, etc. A positive number indicates a net flow into the public schools and a negative number reflects a net flow out of the public schools.

More information on the study (2017) and methodology can be reviewed here.

• The 2012 enrollment study can be reviewed here.

Information regarding past bond and operating referendum results can be viewed here.

S&P Global Ratings recently affirmed Byron Public Schools credit rating. Learn more here.

Here are the timelines for the May 12, 2020, special election.

• Submitted Online Questions (as of 3/10/20)

Visit

https://www.bears.byron.k12.mn.us/

Email

joey.page@byron.k12.mn.us

Call

507-775-2383