Carlton mulls the finances of consolidation

Public finance advisers Ehlers told the Carlton school board on Monday that a consolidation with Wrenshall would be close to revenue-neutral with only a slight decrease in state aid for the new combined school district.

Aaron Bushberger, Ehlers’ municipal advisor, forecasted revenues that could be expected from a consolidation between Carlton and Wrenshall. Because the new district would be larger, it loses certain state aid to the tune of $61,000, which is partially offset by an increase of over $23,000 in the total tax levy, resulting in a net decrease in total revenues of around $38,000.

It represents a trifling amount when compared with the total revenue of the combined district, which can be estimated by adding the two current budgets together.

In 2023, Carlton posted total revenues of $5.7 million and Wrenshall had $6.5 million. The loss in revenues in a merger amounts to less than half of 1 percent.

Ehlers, of Roseville, Minnesota, is financial advisor for both districts. It considered two options when predicting the implications for taxpayers. The first option assumed the current debt of each school district would be spread across all the taxpayers of a newly combined district, and the second option would be to assume that property owners would pay taxes for only the existing debt of the school district in which they were previously located.

Due to recent facilities improvements, Wrenshall carries a higher debt load than Carlton, and debt service makes up the majority of its local school tax levy. Under the first option, where total debt service is spread equally between the two districts, Carlton’s taxes go up significantly. For a $250,000 house in Carlton, the taxes payable after a merger increase by $140 a year, while those in Wrenshall would decrease by $207.

Using the second option, where taxpayers from each former school district would pay on their own pre-existing debt, Carlton taxes on the same $250,000 home go up by only $17. In the same scenario, a Wrenshall home would see a decrease in taxes of $22 a year.

Failed building referendums and little investment in the high school have kept school district property taxes low in Carlton. A home valued at $250,000 in Carlton now pays $392 a year in school property taxes, the lowest among the neighboring school districts of Moose Lake, Barnum, Esko, Wrenshall, and Cloquet. The similarly valued home in Cloquet would pay $1,223, the highest in the group. A $250,000 homeowner in Wrenshall pays $739.

At Monday’s working session, there was no discussion of which option should be implemented, although board chair Julianne Emerson commented after the meeting.

“The one that’s most fair for everybody … is to not share the debt,” she said.

On shared debt service, “that’s a pretty heavy hit for Carlton,” she added.

The Ehlers report, however, showed the Carlton operating levy — approved by Carlton voters — would be spread across the new district. The dollar value generated will remain the same at $268,589, but the amount generated would change from $813 to $393 per pupil unit with more students.

Emerson was optimistic about the potential success of a merger, noting that two things were different about the present effort.

“We have a very successful sports co-op right now,” she said. “There’s not a lot of discussion right now over facilities,” which Emerson noted as a good thing, implying that previous attempts at consolidation were tripped up on those two issues.

The board chair also dropped her opposition to livestreaming school board meetings.

“That is not something I have been in favor of,” she said, but she noted that Wrenshall live-streams its meetings, and in the interest of openness, particularly between the school districts, it was the right thing to do.

Tentative plans were made to establish regular joint meetings of the two boards on the first Monday of each month starting in March. Such meetings would involve discussion and recommendations with all final decisions left up to the separate school boards.

New elementary principal

In other matters, superintendent Donita Stepan said after Monday’s meeting that Carlton had settled on a strong candidate for the elementary principal position. Stepan plans to recommend to the board the hiring of Kari Solarz, who most recently taught in Duluth. Solarz is a Carlton resident who graduated from Wrenshall.

“We could not have asked for a better person for our students, family and community,” Stepan said.