With North Dakota schools facing 'an impending cliff,' lawmakers consider ways to help fund rebuilding

GRAND FORKS — North Dakota’s K-12 schools are getting old. Some state lawmakers say many buildings need major infrastructure updates or entirely new construction to educate children safely.

But many small districts can’t afford to pay for replacements if a critical system breaks. Just ask Anna Sell, superintendent of Oakes Public School District. Her district’s high school turned 100 last year and the elementary school was built 63 years ago. The district is home to nearly 500 students.

“We actually had a terminal breakdown of our chiller (last year). We spent months and months trying to figure out a way to replace it but the system is so old, about 50 years old, that to retrofit it would cost around $400,000-$500,000. We don’t have that kind of money,” she said. “We’ve been asked, ‘What’s plan B?’ We don’t have a plan B because we don’t have enough money for a plan B.”

Oakes Public School District is preparing for a $14.84 million bond referendum on March 14 to support essential investments to address critical building and infrastructure needs. Those needs include a new chiller, a similarly aged boiler that needs replacing, and the replacement of 100-year-old sewer pipes running under some buildings, among other items.

“Our referendum is for four things — HVAC and windows, kitchen, plumbing and ADA-compliant bathrooms at the high school,” Sell said.

If a group of North Dakota lawmakers have their say, the state soon will create a funding mechanism that they believe will stave off a looming problem in the state’s education system.

A proposed state-backed construction assistance plan would have defined criteria for assessing two points — the need for a new school versus refurbishment and addition, along with determining how a school district would qualify.

An initial proposal presented by the North Dakota Education Committee’s school funding task force includes a sliding scale based upon a district’s number of students, the value of a mill in the district and its access to federal funding. The scale for funding ranges from 5-95% of the total project cost and all districts must have money in the process. Funding of less than 25% requires the use of state-approved plans, bulk purchasing and construction management. The proposal would preserve local control for finishes and some exterior design, limited to preserve cost savings.

Labor costs could be controlled by awarding school construction to firms willing to manage these costs, but there is a reality of increased labor costs based upon a district’s location. The assessment criteria for additions and/or refurbishments versus new construction would be set at 60% of the cost of new construction. A triage building schedule would be used based upon the needs either due to enrollment increases or engineering reports demonstrating unsafe conditions that preclude continued use of the building.

The task force is awaiting survey details from 100 districts on their physical plant needs to help frame the process and the scale of the program.

The need, according to some lawmakers, is great.

“I think we have an impending cliff happening in North Dakota that will impact more rural schools — inadequate buildings that should no longer be used to educate children and the inability to replace them,” said Rep. Eric Murphy, a Republican from Grand Forks.

While it’s a statewide problem, Oakes’ issues may provide the best current example. For instance, the HVAC system and new windows are predicted to run close to $12 million, and replacing 65-year-old appliances and updating the district’s kitchen will cost about $2 million, Sell said. The district’s operating budget doesn’t come close to being able to fund these projects.

The district’s building fund can generate up to 20 mills, an amount approved by voters in the 1990s. That fund generates $440,000 typically for the district, and even with diligent saving there’s no possible way the district can afford to make those fixes, Sell said.

“If we don’t have our HVAC and we lose our boiler, or we lose any other part of that system, we won’t be able to hold school at the high school,” she said. “The kitchen is 65 years old and the structure underneath, the electrical, is in bad shape. We’re getting by; we’re keeping our fingers crossed.”

The worst-case scenario for Oakes? Losing the ability to use the kitchen and having to send all the students to surrounding districts.

“What public school district would be able to absorb those 500 kids?” Sell asked. “This is so detrimental to the town if we lose our school. We know what happens to the towns in North Dakota if they lose their schools. They cease to exist.”

School Funding Task Force

Across the state, school districts are helping lawmakers come up with a funding proposal for legislative action during the 2025 session. The intent is to allow state-funded construction to supplement local resources for public schools in North Dakota. Examples of current school district funding assistance needs include:

• In Valley City, an estimated

  $37 million is needed

  to fix electrical, plumbing, safety issues and more across the district. The average age of the district’s buildings is 66 years and part of the high school was built 105 years ago. 

• In Devils Lake, new boilers are needed at two schools in the district and air conditioning is needed at four schools. Other needs include additional classrooms at an elementary school, parking lot paving at two schools and ADA-compliance updates within the district. 

Addressing aging infrastructure is just one need that districts have. Another is finding room to teach the increasing populations in growing metro areas.

Williston Basin School District has a $35 million bond referendum that will be put to voters April 17 to address its growing enrollment. Williston expects to add 1,000 more students over the next five years. The bonds will provide funds to “help construct and equip a new elementary school, purchase land for the construction of the school, and otherwise improve, renovate, remodel, construct and equip school property and make site improvements to the property.”

In September 2023, West Fargo voters defeated a $147 million referendum request that included nine projects in total. That district’s School Board is now developing strategies to engage stakeholders to create solutions that will address the rapid growth in the district.

At a Feb. 22 Education Committee meeting in Bismarck, the state’s school funding task force committee shared data collected during a survey of North Dakota schools to determine the extent of the needs.

Murphy said during this process he has looked at three other states using different funding models. Kansas uses a sliding scale to help districts with construction and renovation costs, allocating from 5-95% of the funds needed. In Wyoming, the state owns all the schools and is responsible for their maintenance and upkeep. Murphy doesn’t think the Wyoming model would work for North Dakota, where the emphasis is on local control. Minnesota’s program includes a look-back, which helps reimburse districts for certain infrastructure costs, another program Murphy’s not a fan of.

“In Grand Forks, we’re looking at building a

new school at the Air Force base

and that process taught me something important – you just can’t give people an open checkbook. A $45 million project is now approaching $90 million for about 350 children,” he told the committee. “We need to think about how we’re going to control costs. In Grand Forks, we’re good about referendums, which isn’t the case across the state.”

The first challenge the task force is addressing is determining the extent of the problem.

“We don’t know what that is yet,” Murphy told the Grand Forks Herald. “It could be somewhere around $1 billion. We have way too many schools and it’s not mismanagement, it’s not overpaid administrators. The tax base (of some districts) just doesn’t support a new school.

“A lot of our schools are very old. Times have changed and the state has changed. When it comes to the state Constitution, it’s clear – we have a responsibility to educate every child in a place that’s safe. This is what we deal with in the Legislature,” he said.

Another challenge: The value of mills varies from district to district. Data presented during the committee meeting shows the majority of school districts, 129, have mill values between $5,001 and $50,000. Bismarck has the highest value mill at $575,472 with an average daily membership (ADM) of 14,340 students. The lowest value mill (not including Grand Forks Air Force Base or Minot Air Force Base) is Twin Buttes, at $39, with a 50 ADM. Schools on Native American reservations also have access to other federal mechanisms for funding school construction.

“If the state needs to have a school construction program, how will school districts with a low value per mill ever possibly replace aging and, in many cases, dilapidated schools?” Murphy asked the task force.

“We’re going to be at a tipping point in the next few years. Building inspectors will condemn a school. How do you deal with that as a town?” Murphy asked.

Dr. Richard Faidley, superintendent at Williston Basin School District, asked the task force to analyze the upcoming referendum votes and look at funding sources.

“We have the need to build two elementary schools and the cost of construction now is astronomical in Williston. What’s $55 million today, four years ago was $32 million. The prices aren’t going to go down. We need to look at funding sources, have collaborative conversations together as a Legislature, and ask K-12 to come up with creative ways to deal with these challenges,” he said. “We’re not asking for pie in the sky. It’s a long-term situation we’re all faced with.

“There are a lot of differences in how districts receive their revenues that cause many challenges to school construction conversations. For those like West Fargo, there needs to be a solution and when it comes forward, it needs to make sure it takes care of all districts in the state. It’s a monumental task and will require additional in-depth analysis and conversations with our districts,” Faidley said.

The author of this story, Carrie McDermott, is editor of Prairie Business, a magazine published by the Grand Forks Herald. Digital subscriptions for Prairie Business are free and can be found on the Herald’s website.