Increase in levy due to HVAC, parking lot project

By Chad Koenen

Publisher

A public hearing that typically nothing more than a formality, turned out quite a crowd on Tuesday night. 

Approximately 60 local residents attended the annual Truth in Taxation meeting at Henning Public School on Thursday night to discuss the proposed tax levy increase for the school district. The levy was raised by 148.76 percent to fund the proposed HVAC and parking lot project. 

A number of people in attendance angrily voiced their displeasure against the tax levy increase, which included yelling at the school board and other people in attendance.

As part of the Truth in Taxation meeting, Shelby McQuay from Ehlers took those in attendance through a presentation on how school funding is approved and appropriated by both the state and local school district. 

McQuay also highlighted the fact that the state has not kept up with inflation when it comes to school funding. The state recently approved a 4 percent increase in funding for next year and a 2 percent increase in 2024-25. In addition to a lack of funding when it comes to inflation, she said the state and federal government are pushing unfunded mandates on local school districts for things like special education that require school districts to offer certain programs, but does not reimburse the school districts additional money to fund the mandate. 

After being debt free for a number of years after paying off its school building, the Henning School Board issued a bond in September to pay for the upcoming HVAC and parking lot project. 

“This is the is the first year the district has had a debt service levy in quite some time,” said McQuay. 

Almost all of the increase in the tax levy is due to next summer’s $7.9 million indoor air quality project, as well as parking lot project. 

As part of the building project, the school district will be replacing its aging HVAC system, replacing elementary windows, replacing a portion of the roof, upgrading the special education bathroom, as well as a variety of other items that have been identified by the school board.

Across the road, the school district will demolition a white garage to make way for a new parking lot near the bus garages on Marshall Ave. The new parking lot will feature 28 spaces with two handicapped accessible spaces. There will be two drive-in/out lanes, which engineers have said will help with traffic flow in and out of the parking lot. New lighting will also be installed in the new parking lot.

The bonds were issued over the course of 11 years and individuals with ag land can be eligible for a state tax credit to reimburse up to 70 percent of the school portion of the taxes. That tax credit adds up to about 15 percent of the total funding for the project, which will come from the state and not local sources. 

In order to fund the new project the school board issued bonds and a large tax levy to service the debt. 

For example, a residential home valued at $175,000 saw a $265 annual increase, or $22 per month, in property taxes in 2024. The tax increase isn’t quite as dramatic when compared to taxes paid in 2021, which showed an increase of just $160 per year from taxes paid on a $175,000 house three years ago. 

By comparison, due to the dramatic increase in home valuations, McQuay said a home that is currently valued at $175,000 was valued around $125,000 in 2021. 

Public comment, levy approval

During the public comment portion of the meeting, many of the comments from those in attendance revolved around a perceived lack of communication with the public about the levy being approved in September. 

The public also spoke out against the proposed property valuations in Otter Tail County, which have grown exponentially over the past few years, as another reason as to why property taxes have increased, as well as the school board moving forward with the project even after a school building project referendum was voted down two times since November. 

Henning School Board Chair Reed Reinbold said he sympathized with those in attendance, but contended the school district needed to replace its aging HVAC system and come up with a solution for a parking lot after the two referendums failed.

He said he has been on the school board for 15 years and “this is the first heavy lifting we have asked the taxpayers to do,” about the new levy to make the upgrades at the school. “We owe it to our kids, as long as we have a school, to have an HVAC system that works.”

He said the HVAC system is failing to a point where some rooms are substantially warmer and colder than others. There are also rooms in the school where condensation builds up in the spring and fall of the year.

While the school levy was increase 148 percent next year, Reinbold said the way the levy was structured it should actually go down a bit after three years as the school district front loaded some of the principal payments on the bond.

After dozens of comments were made by the general public during the public hearing, the school board closed the hearing after about an hour and recessed to its regularly scheduled meeting in the board room. The public hearing was held in the band/choir room to allow for adequate seating. 

Prior to the vote on the levy increase, which was held later at the regularly scheduled board meeting, Reinbold said that while the meeting was difficult for the board to sit through, he was proud of the work the school board has done with the project and the direction of the school district moving forward. 

The tax levy increase was approved by a 5-1 margin with board member Kim Haugen voting in dissent.