Board approves bond types to fund athletic facilities project

Published 10:00 pm Monday, June 18, 2018

It was something old, something new and something borrowed at Monday’s school board meeting as Albert Lea Area Schools edges closer to updates on Hammer Complex, Halverson Elementary School and Albert Lea High School.

Upon recommendation from Springsted, a public sector adviser based out of St. Paul, the school board approved the sale of two types of bonds to fund their voter-approved $24.615 million project, which will update district athletic facilities at Hammer Complex, increase the gym at Halverson Elementary School to full-size and change its office location, and complete locker rooms and add an HVAC system to the gym at Albert Lea High School.

Springsted President Kathleen Aho said a Minnesota statute permits the addition of less than 2 percent to account for the cost of underwriting the bond, so the district could actually issue over $25.1 million in bonds. However, Aho said said the district has the potential to accomplish the same thing by issuing bonds in the neighborhood of $23.66 million because of their ability to reduce capitalized interest.

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“Well, it’s definitely good to see the numbers are lower,” school board Chairman Ken Petersen said.

Aho recommended using a combination of capital appreciation bonds and serial bonds to fund the project. She said Springsted chose this route for the district because of its promise to the voters about a net zero tax increase for voters.

“What can we do for the district to enable you to keep faith with those voters, get the money that you need for the project and not have to increase the level?” Aho said.

The answer Albert Lea Area Schools chose was to use some of the CAB bonds to pay interest on the serial bonds until the district’s existing debt drops off in three years, and at year four, to start chipping away at the bond’s principal. Aho said the move helps reduce the necessary number of bonds to sell.

She called the move a structural technique used so the district could keep its commitment to not increase taxes for voters.

“It’s not something that we use frequently because these type of bonds are a little bit higher in interest rate, but it’s something that other districts have done … so it’s not like you’re out with an experimental type of financing,” Aho said.

According to district Superintendent Mike Funk, planners have met with community members and district staff about track and field, boys and girls soccer, baseball, softball and football needs. Now in the designing and planning stage, Funk expects the project to be out for bids in November. It will be an open bid process, open to all qualified contractors, he said.

“Can local bid on this?” Funk said. “Absolutely. If they’re qualified for the project, they’re able to do it.”

Tentative construction dates for Halverson Elementary School run from April through October 2019. The high school’s changes will take place on a similar timeline. Funk said the tentative pieces for Hammer Complex include a field house demolition upon conclusion of this fall’s sports season, with construction April through October 2019 and a game-ready stadium for August. Practice and sub-varsity fields will likely not be ready for use by August, he said.

About Sarah Kocher

Sarah covers education and arts and culture for the Tribune.

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