Lakeville schools awarded federal construction bonds
Last year, board decided to combine two years of maintenance projects to save tax dollars
by Derrick Williams
Thisweek Newspapers
On March 29, Lakeville Area Public School District officials received the news they had been waiting to hear.
The district was awarded $8.8 million in federal construction bonds that will pay for a wide array of maintenance projects to the district’s buildings.
Mark Klett, the Lakeville school district’s director of business services, said the Minnesota Department of Education notified the district on Monday.
The bonds, called Qualified School Construction Bonds, are part of the federal stimulus bill, or American Recovery and Reinvestment Act, that was approved in 2009.
The QSCB program will allow for the Lakeville school district to sell bonds at zero, or lower than normal interest rates, with bondholders receiving an income tax credit instead of the interest the district would normally pay.
The result is lower associated costs for taxpayers, said School Board member Bob Erickson.
“It’s an exciting day for us to learn about this,” he said.
Erickson said a multifaceted cost-savings plan, which included the use of QSCB, was initiated last year when the board decided to combine the district’s 2010 and 2011 maintenance projects into one bidding cycle.
By receiving the $8.8 million in QSCBs, Erickson said the district can now save significant tax dollars for the community with both the low interest on the federal bonds and the low bids for work spurred by the recession.
“We wanted to take advantage of the favorable bidding climate, and, hopefully, the bonds,” Erickson said. “It’s exciting because the process is working.”
Normally, the School Board would levy for the funds necessary to maintain the district’s buildings by way of a program called the Alternative Facilities levy.
But last May, the School Board took the maintenance projects slated for Alternative Facilities in both 2010 and 2011 and combined them into one year.
The projects will include roof replacements for Lakeville North High School, and Cherry View and Crystal Lake elementary schools. Also slated for work is the replacement of some mechanical units and piping at McGuire Middle School’s pool as well as HVAC upgrades, parking lot repairs and carpet replacement for buildings around the district.
Erickson also said Wold Architects, the district’s architectural firm, agreed to reduce its fees from 7.5 to 6.5 percent.
Klett said it’s too early to know if the district will see zero percent on the QSCBs it sells, but did say they will save interest dollars for the taxpayers.
The Minnesota Department of Education was given more than $80 million in funds for the bonds and Lakeville was one of 10 districts to receive bond money.
Erickson said the bonds and building projects will go out for bids shortly.
“It’s a win-win, I think,” Erickson said. “Not only am I confident we’ll get favorable bids, but local trades persons who are unemployed will be helped, too.”
According to the U.S. Treasury, the QSCB program provides $11 billion in tax-free bonds in both fiscal years 2009 and 2010 to help fund school construction, rehabilitation, repair, and land acquisition for schools around the nation.
Officials with Lakeville schools applied in 2009 for bonds through the program, but were unsuccessful.
E-mail Derrick Williams at:
lakeville.thisweek@ecm-inc.com
