Education

Facilities & Technology - Alternative Facilities Revenue

Minnesota Statute: 123B.59

Statewide Outcome(s):

Alternative Facilities Revenue supports the following statewide outcome(s).

Minnesotans have the education and skills needed to achieve their goals.

Context:

School districts, students, and taxpayers are better served through healthy, well-maintained facilities, and through extension of facility life. This program allows large school districts to complete deferred maintenance, health and safety, and disabled accessibility projects that cannot be completed with other available funds and small school districts to address large scale health and safety projects.

Strategies:

Alternative facilities revenue allows large districts to complete projects that will maintain and extend the life of facilities. The following districts are currently eligible and participating in the 1A (large district) program. 1A districts must meet one of the following criteria to be eligible:

·         have at least 1.85 million square feet of space and an average building age of at least 15 years; or

·         have at least 1.5 million square feet of building space and average building age of at least 35 years.

Anoka-Hennepin            Duluth                           Mounds View                Roseville                       Bloomington

Elk River                       North St. Paul               South Washington         Burnsville                      Hopkins

Osseo                          St. Cloud                             Chaska                         Lakeville                       Robbinsdale

St. Paul                                Eden Prairie                  Minneapolis                  Rochester                     Stillwater

White Bear Lake            Minnetonka                   Rosemount                   Edina

To receive alternative bonding revenue, 1A districts must submit a ten-year facility plan to the Minnesota Department of Education (MDE) for approval. The plan must describe eligible projects and the district’s timetable for undertaking them. Eligible projects are for deferred maintenance, health and safety, and disabled accessibility. Once MDE approval is obtained, the district must decide if it will:

·         issue bonds to finance improvements and retire them over time with a debt service levy;

·         make an annual general fund (pay-as-you go) levy to fund projects on an annual basis; or

·         some combination of these two options.

Alternative facilities revenue provides limited access to all other school districts only for an approved health and safety project of $500,000 or more per building. This limited expansion of the program, effective for FY 2005 and later, allows all other school districts (1B districts) to spread the cost of approved large health and safety projects over a span of years so as not to unduly increase property tax burdens.

Voter approval is not required to access this revenue. This program is funded by a combination of state aid and local property tax levies. School district debt service levies under this program qualify for Tier 1 debt service equalization. Annual school district general fund (pay-as-you-go) levies under this program qualify for health and safety aid.

Seven of the 25 large 1A districts also qualify for alternative facilities aid. Aid is based on the lesser of the current annual debt service cost for alternative facility or the certified debt service levy for the program for taxes payable in 1997 if a district issued bonds. For districts certifying an annual levy, the amount is limited to the lesser of the district’s annual levy or one-sixth of the levy certified for taxes payable in 1998.

Results:

MDE does not collect data on the condition of school district facilities.  The intention of facility funding is to provide a revenue stream for facility maintenance.  MDE can only report on how much state aid and district property tax is being utilized by districts.

Performance Measures Notes:

*The previous data is from FY 2005 and current data is from FY 2011.

** The previous data is from FY 2010 and current data is from FY 2013.