Helping pass bonds

I just relocated a webpage I’d found a year ago in which JCI touts its ability to help pass school referendums. It occurred to me at the time that not all referenda pass and when they fail Johnson Controls loses out on construction projects. Finding a way to implement a building plan without asking voters would be a boon to JCI.

“Not only did the program management strategy improve the learning environment, it also allowed Johnson Controls to help the districts finance their projects. The company helped the Elk River district market a bond referendum to cover the project that was also beneficial to taxpayers. For Mounds View, Johnson Controls negotiated with the state of Minnesota to use existing health and safety levies to fund the project.”

When I found the page again this morning I paid close attention to a second sentence which I’ve italicized here. It helps explain how Duluth found the “loophole” sparing it from offering a referendum. Health and Safety levies can be used to allow districts to bypass referenda but for smaller cities the maximum size of a referendum free building project is half a million dollars. The funding mechanism is not called a bond although bonds are still required. These health and safety projects are called lease levy purchases but no matter what they are called they all require borrowing and higher taxes.

At some point JCI’s attorneys must have noticed convoluted language which could be interpreted to allow the Duluth School District to use these specific financial instruments to avoid the voters without the $500,000 spending limit. And did they ever push the ceiling with a plan for $293 million. Call it a loophole; call it inadvertent; call it slick lawyering. Whatever it was the Dept of Education, by acceding to JCI’s and the District’s legal interpretation radically extended the Duluth School Board’s ability to bond without a vote for the health and safety of students by almost 600 percent.

City of the first class status was once granted only to Minnesota cities with a population over 100,000. Even though Duluth has not tipped the 100,000 scale in forty or fifty years Duluth was grandfathered in to keep some small advantages this status conferred.

Duluth has now been eclipsed by Rochester which has taken its place as the third largest city with a population of 99,000.
Duluth is much more closely tied to the following cities whose school boards, because they are not Cities of the First class, do not have the ability to abuse their voters and taxpayers the way Duluth’s school board can.

CITY………..POPULATION………CAPITAL SPEND LIMIT WITHOUT A VOTE

Duluth …………..84,397……………….$293,000,000
Bloomington ….81,446……………………..$500,000
Brooklyn Park..71,394……………………..$500,000
Plymouth……….71,057……………………..$500,000
St. Cloud………..66,503……………………..$500,000
Eagan…………….63,751……………………..$500,000
Maple Grove……61,868……………………..$500,000
Coon Rapids…..61,771……………………..$500,000
Eden Prairie……61,660……………………..$500,000
Burnsville……….59,118……………………….$500,000

About the author