How the plan works

Last update: May 11, 2008 - 9:23 PM

The Duluth School District is using a clause in state integration law to fund almost $300 million of school building and renovation projects over the next five years. It is costing $257 million, plus $36 million of construction inflation for the five years of the project. Including interest paid on the plan over 20 years of the bond life, it totals $407 million.

Once completed, the district hopes to get about $5.33 million annually in savings. That money, they say, can be used to pay off the bonds and lower the taxpayer burden to only $125 million of the $293 million project.

But in reality, $125 million is the minimum that district taxpayers would have to pay, and it could be higher. The Minnesota Department of Education is requiring the district to use only $1.4 million of the annual $5.33 million in savings to help pay off the bonds, Superintendent Keith Dixon said. The school board can decide, if a hole opens up in its operating budget or a November levy referendum doesn't pass, to spend up to $4 million in its general operating budget, which would increase the load on taxpayers.

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