MITCHELL — A petition circulating Mitchell seeking signatures in an effort to “slow down the process so that we can take the time to better understand what we are doing” with the proposed Mitchell High School construction project can’t force the issue to a public vote, school officials say.

The petition includes text from the resolution authorizing the execution, terms, issuance, sale and payment of limited tax general obligation certificates the board passed at its meeting Jan. 24 along with references to South Dakota codified law. Also included in the petition are six points referencing articles in the Mitchell Republic.

The petition appears to state that $24,520,441.60 is the actual amount to be deposited into the project construction fund, with additional costs of $288,365 listed to cover the cost of the issuing of the certificates. That results in the present value of the total principal cost being more than $22.9 million and therefore exceeds 1.5% of the taxable valuation of property within the district. That should result in the resolution being subject to a public vote, the petition states.

Steve Culhane, business manager for the district, however, said that is not the case.

“Anything of a principal amount over this threshold could be referred to a vote. The school board approved the certificate issue at $22,900,000, therefore below the 1.5% limit and not subject to a vote or referable,” Culhane said. “From the sale of certificates of $22,900,000 there are also additional funds being gathered as ‘reoffering premium’ of $1,908,806.60 for total sources of funds of $24,808,806.60. From this amount, we pay the underwriter’s discount, and costs of issuance and receive a net amount of $24,520,441.60.”

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1.5% of the Mitchell School District valuation is $22,994,813, Culhane said.

Culhane said he consulted with Rodney Freeman, attorney for the Mitchell School District, who informed him that the resolution passed Jan. 24 would not be subject to a public vote according to state law.

“When we contacted district counsel they informed the attorney representing the people who were gathering signatures that the reoffering of premium is treated as interest and is not part of the principal,” Culhane said. “Also indicated was the Supreme Court of the United States has explained that premium and discount are treated as interest as described in the case of Old Colony R. Co. v. Comm’r of Internal Revenue . And thus are not part of the principal.”

Culhane also said that even if the board were moved to action by such a petition, it still would not be able to call a vote on the resolution. If they had been inclined to move to a public vote earlier, the board would likely have just attempted a bond issue to secure more funding.

“To me, if they were going to go to an election, they’d go for a bond issue and ask for more money,” Culhane said.

Deb Olson, president of the Mitchell Board of Education, said she also was aware of the petition but had not personally seen it. She remains in favor of the general obligation certificate resolution due to increasing interest rates.

“I’m supportive of the (resolution) at this time, because it just makes financial sense. As board members we always want to use the knowledge that we have to serve our patrons of the district in the wisest financial way we can,” Olson said. “It’s so important now because of interest rates. The interest rates are low, but I just read that they are over 4% for some houses already. What could that add to the total cost of the project, or what could it take away from the project because we wouldn’t have the necessary funding?”

The district has been working for years at building funds to put toward the project. The decision to build a new high school building has been in the works for years and has undergone a lot of scrutiny by administrators, board members, faculty and staff. School officials have done a lot of planning to come up with the best way to bring a new high school building to life, she said.

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The availability of federal COVID-19 relief dollars, which can be put toward projects like the new high school, merely accelerated the timetable for the project, she said.

“Building the fund balance has required discipline as well as planning to have that amount of money there. (Superintendent Joe) Graves and the board have talked about that, along with senior high staff, for a number of years,” Olson said. “It isn’t just a decision that was made because there was some additional money.”

The petition states that “there is a lack of transparency on cheaper options,” but Olson said discussions on the plans and budgeting have been going on at board meetings for years.

“It has always been very clear that we have been building the fund balance so that the high school could be built,” Olson said. “I believe that it’s been discussed and the people have been made aware of it.”

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Petition on new Mitchell High School building project? It can’t force public vote, school officials say – Mitchell Republic

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