School board approves sale of $3.57M in bonds for maintenance at schools this summer

Published 4:14 pm Wednesday, February 21, 2024

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The Albert Lea school board on Tuesday awarded the sale of $3.57 million in general obligation facilities maintenance bonds to complete work this summer on mechanical systems at three schools in the district.

That includes the steam boiler system at Southwest Middle School, the hot water boiler system at Lakeview Elementary School and the pool heater and air handler replacement at Albert Lea High School.

Jeff Seeley with Ehlers, Inc., the firm the district works with for long-term maintenance projects, said they received five bids in the sale with the lowest coming from Baird of Milwaukee at true interest cost of 3.18%. The bid also includes a net premium of an extra $270,000 for project costs.

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Albert Lea Director of Finance and Operations Jennifer Walsh said offering a premium is common when companies bid to buy bonds to make the bid more attractive.

The board in December approved the intent to sell bonds for $4.07 million, but because the project bids came in lower than expected, the bond sale was reduced by $500,000. They also initially estimated the interest at 4.04%.

The payback will be over 15 years using funds from the district’s long-term maintenance fund. There will be no new tax impact on taxpayers.

Seeley said the district will use about 25% of its long-term maintenance funds for the project. Funds will be transferred to debt service to make that payment.

He said with the sale the district was assigned an A1 credit rating through Moody’s Investors Service. He referenced the district’s solid economic base, its recently renewed operating levy and modest debt burden with no near-term borrowing plans as the district’s credit strengths.

Regarding credit challenges, he referenced narrow operating reserves, significant reliance on state aid for operations and a declining enrollment trend.

In other action, the board:

• Approved a two-year master agreement for the Albert Lea Schools Directors/Coordinators Association.

Regarding changes in the agreement, the district issued the following statement:

“The Directors/Coordinators Association is a representative body for employees holding director and coordinator positions at multiple levels across the district. The recently approved 2023-2025 master agreement for the association includes two additional holidays, updated leave language, an increase in the salary schedule in each year and longevity language for years of dedicated service to Albert Lea Area Schools.”

• Recognized Amy Vogt and Cindi Petersen as December Employees of the Month.

• Heard a report from Superintendent Ron Wagner, who recognized the board members during what is School Board Recognition Week.

Wagner also thanked the community, including the city and other local businesses that came to aid after a sewer problem at Southwest Middle School forced the school to go to virtual learning for the day.

He gave a report on a national conference he attended called Here for the Kids sponsored by The School Superintendents Association. He said what he heard at the conference reaffirms that the district is heading in the right direction.

• Heard a report by board member Angie Hoffman that brought up the issue of school board control. She questioned whether the board controlled administration or if administration controlled the board.

She also referenced a policy that she would like to look at further that she says allows the superintendent to decide whether the board will consider a change to a policy that is proposed by a member of the board.