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Owatonna board hears presale report for tax-neutral bonds to fund indoor-air-quality projects and pool renovation
Summary
District financial advisor presented a presale report on bonds the board authorized last year; sale is planned for March 24 and levies for first-year payments have been certified.
The Owatonna Public School District on Feb. 24 received a presale report on a tax-neutral bond sale the board previously authorized to pay for indoor-air-quality (IAQ) improvements and a high school pool renovation.
The district’s financial advisor, Matt Hammer of Ehlers Public Finance, told the board the district plans to pursue bond rating work with Moody’s and take bids the morning of March 24, with award expected that evening. “We were estimating a 5% interest rate last summer. Right now our estimate in the presale report is 4.16%,” Hammer said.
The presale aligns with levy amounts the board approved as part of the district’s long-term facilities maintenance (LTFM) plan in July and certified in December. Hammer said the IAQ portion is restricted in use and that the district will wait for bid results for the IAQ contractor (Site Logic) before finalizing the financing. “Those dollars are restricted in their use,” Hammer said of the IAQ authorization.
Hammer said the bond proceeds will be issued as a bifurcated issue for efficiency: one series to cover the restricted IAQ component (authorized at $5.8 million) and the other to cover a remaining $1.9 million authority tied to the high school project, which will fund the pool component and has broader flexibility. He said bundling the sale into one market issue reduces issuance costs.
Superintendent Jeff Elstad confirmed legal counsel Andrew Hecke will work with district staff to finalize resolutions and sale documents so the board can act at the March meeting.
No formal action or vote on the bonds occurred at the Feb. 24 meeting; Hammer said he will return to report results after the March 24 sale.
Why it matters: The bond sale will raise dedicated funds for IAQ upgrades at specified schools and a pool renovation; the IAQ dollars are legally restricted in use and levies tied to the sale will appear on property tax statements this spring.
