Neither side blinked.
Tofte Supervisor Paul James and Birch Grove Community School (BGCS) Director Caroline Wood both stood their ground during a tense dispute over the cost of lease space for the school.
The disagreement over the town board’s recent decision to raise the school’s lease from $8.50 to $10.50 per square foot came to a head at the July 14 Tofte town meeting.
James said a recent bill of $19,800 that fell on the township to pay was the tipping point in a long debate about who would pay the price to run the school if the school ran short of money. The township owns the building and provides maintenance, but the school is responsible for paying its share of heat, water and electricity.
Tofte supervisors held a special meeting on June 30 to decide on lease rates for users of the building for the coming year. At that meeting the board voted 3-0 in favor of raising the lease rates.
Wood explained that her board met the next day, July 1, to finalize its budget for the 2016-2017 school year and said the school planned to pay $8.50.
Wood said $2 per square foot increase amounted to a 20 percent increase. “To our budget that would be huge. There’s no way for us to react to this. There’s no way we can come up with that kind of money. The school can’t afford to pay it. We are not in a position to go and ask for more money from the other townships,” she added.
“To me this is a Tofte tax issue,” said James. “To me it’s the school asking the Tofte township taxpayers to belly up to the bar and pick up the shortages. I’m not willing to put Tofte taxpayers at risk anymore.”
Last winter at the three West End township [Lutsen, Tofte and Schroeder] annual meetings, each voted to give $20,000 to the school for the coming year.
“At that time we were told that vote would solve all of your money problems. Evidently it doesn’t,” James said.
“We’re at a turning point,” said Supervisor Jeanne Larson. “Do we want a community center with programs or do we want a school? I think as a community we need to decide what we want and who we want to serve.”
Birch Grove School Board Member Skip Lamb responded, “I think that’s a great idea. Put it to a vote and let the folks decide if they want a school or a community center.”
Some history
BGCS is a tuition-free charter school open to all elementary students in Cook and Lake County, established after School District 166 decided to close the West End school in 2005. Enrollment started declining in 2012, causing BGCS— which receives per-pupil state and federal aid like all public schools— to suffer financial hardship.
At that time the school asked the three West End townships for financial support, which the majority of residents voted to grant. However, the amount of money requested has gone up yearly. In 2016 each township voted to give $20,000 for the next school year.
The school has been hopeful that enrollment would increase and in fact, attendance at the K-5 school has grown from 19 in 2015 to 28 this past year. However, the school hasn’t been able to dig itself out of its financial hole and could face Statutory Operating Deficit (SOD). If it falls into SOD without a way to prove that it can pay its bills, the school could lose its sponsor, Volunteers of America, and then would lose its license to operate as a charter school.
While the school uses the majority of the space, the building also offers a community center, library, a senior center, monthly community lunches, and outdoor recreation amenities including tennis courts, ice rink, playground, outdoor pizza oven, and cross country ski trails. Sawtooth Mountain Clinic rents space for clinic visits for West End patients.
A community member said he had just come from a W.E. Connect meeting and he was appalled at the poor communications between the school, the township and W.E. Connect.
“I agree that we have poor communications,” Supervisor Larson said.
Supervisor Sarah Somnis, who is new to the town board, said she thought that W.E. Connect should be charged the same lease rate as the school, but James countered, saying that W.E. Connect “is us.”
James said, “The township decided they wanted a community center and W.E. Connect [which is run by a volunteer board] manages that for us. If we raise the lease rate for W.E. Connect, we are raising taxes on our citizens.”
At the end of the discussion James asked Wood and the BGCS board to come to a special meeting on July 20 to discuss ways the school could raise enough money to cover the hike in the lease. He suggested they contact Lutsen, Schroeder, and areas of Lake County that send their kids to Birch Grove and ask them to pony up and pay more money to help the school.
Wood said she doubted the school had any fundraising options left for the coming school year. She said her board had voted to pay $8.50 per square foot and that would be all they could pay. James said the Tofte board had voted for the $2 per square foot increase and wouldn’t back down.
“I guess this means you won’t be signing the lease then?” James asked.
“No, I won’t sign the lease,” said Wood who then left the meeting.
Seeking solutions at special joint meeting
“This meeting has been called to discuss what other revenue sources are available to the school. It’s not about anything else. The board has passed a motion to make the rent $10.50 per square foot, so that’s not up for discussion, the discussion is how the school can fill that gap so you can stay in the building,” Supervisor Larson said as she opened the special meeting at the Tofte Town Hall with representatives from the school, Sawtooth Mountain Clinic and Birch Grove Foundation/W.E. Connect.
The clinic representative said her board had approved the rate hike. “We are in this community because we owe you this access to health care,” she said.
Longtime BGCS Board Member Judy Motschenbacher shared a document called Leasing Basics for Minnesota Charter Schools. She said the state currently pays $1,314 per year per child to help pay the lease of the building. As of June 30, 2016, the state had sent $20,689 to the school out of $27,946 the school was supposed to get from the state. The rest of the money was withheld because the lease for 2016-2017 had not been signed between the township and school.
To cover payments owed to the township, the school is using a line of credit. Motschenbacher said the school has paid $800 in interest and that would climb until the lease was signed and the state sent the rest of the money.
Last year the school (including $6,600 paid by parents for daycare at the school) paid $48,176.55 to Tofte. The $2 per square foot hike would raise that by $10,000, and Motschenbacher said the school is already on a bare bones budget. “There is no money left to pay that,” she said.
Former Tofte supervisor Jim King said if it came down to the school versus W.E. Connect the school could very well lose. He read off a list of activities that take place at the community center, activities he said, that are for all ages, young and old, and not just for school age children.
King said the school was faced with three choices. One, raise more money. Two, cut expenses and three, cut staff. “That’s the way businesses work,” he said, adding, “But to lose the school would be a terrible thing.”
BGCS Board Member Kathy Lawrence said no one was against W.E. Connect, but said, “The school doesn’t have money to heat bathrooms. We can’t afford to pay for the hockey lights, new curriculums, replace computers. We can’t come up with more money.”
Lawrence said she had missed anniversaries, birthdays and other holiday celebrations to work on fundraisers for the school. “We’re hanging by a thread and you’re going to cut it,” a frustrated Lawrence said.
Somnis made a proposal that seemed to have the backing of all. Rather than fight amongst themselves, she asked if all parties could go together on a fundraiser that would go toward making up the cost difference in the proposed lease hike. She agreed to lead a group of volunteers in an effort to put on a fundraiser in the fall.
If anyone is interested in taking part in that group, email Somnis at somnis86@hotmail.com.
Motschenbacher said the school board would come back with a counteroffer of $8.50 per square foot at the township’s next meeting on August 11. “That’s all we can do. I guess that means we will stay there or we will go. We would like to work to make up the difference. It will be up to you to decide.”
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