ITEM NUMBER: 7.C.
School Board Regular Meeting
- Meeting Date:
- 02/22/2022
- Prepared By:
- Tom Sager
Item Type:
Subject:
Approval Relating to General Obligation Facilities Maintenance Bonds for Phase 2 of Indoor Air Quality Projects
Background:
Each July, the District presents its annual Long Term Facilities Maintenance plan. This plan includes anticipated revenues and expenses related to the District's LTFM projects. The School Board’s review and approval of this plan allows the District to include the anticipated revenue associated to fund these projects in the annual property tax levy certification process. The Minnesota Department of Education has also approved the allowance of the District to increase its LTFM levy authority to pay the debt service incurred to finance these projects. In July 2020, and again in July 2021, roughly $60 million of Indoor Air Quality Projects were identified throughout several buildings within the District.
These projects were divided into three phases. To finance Phase 1, the District sold General Obligation Facilities Maintenance Bonds in September 2020. Phase 1 is now in the final stages of completion. Continuing to move forward with the overall plan’s implementation, the District solicited construction bids for Phase 2 in October 2021, and awarded these bids to the lowest and most responsible contractor(s). The School Board received and accepted these bids at the December 7, 2021 board meeting.
Similar to Phase 1, Phase 2 is now in position to procure the funds required for this work. Also similar to Phase 1, the District plans to sell General Obligation Facilities Maintenance Bonds. The work will be done primarily at Lincoln Community Center and Roosevelt Elementary School starting this spring. Again, this new debt will be serviced through the District's LTFM revenue. Amending the District's LTFM revenue and expense plan to reflect Phase 2’s LTFM revenue will require board and MDE approval.
With rising expenses due to inflation, in order to secure favorable rates on the cost of borrowing and construction, it is very important the District secures this funding and adheres to the accepted bids as expeditiously as possible. The District will continue to work with its Municipal Advisor, PMA, on the bond sale and with ICS Facilities Management, on project design and construction.
Tonight’s recommendation for approval is the first part of a two-part process. Tonight, administration will recommend the board approve the parameters set in the attached resolution for the bond sale, and authorize the Superintendent/Director of Business Services and a Board Officer to execute a Bond Purchase Agreement for the stated purposes. The second part of the process will occur at a future school board meeting when the board will ratify the resolution for the award of the sale, anticipated to occur in April 2022. This resolution will approve the updated long term facilities maintenance 10-year plan, state the Board’s intention of borrowing funds up to $19,750,000, authorize application to the state credit enhancement program, and define parameters for the sale of the bonds.
These projects were divided into three phases. To finance Phase 1, the District sold General Obligation Facilities Maintenance Bonds in September 2020. Phase 1 is now in the final stages of completion. Continuing to move forward with the overall plan’s implementation, the District solicited construction bids for Phase 2 in October 2021, and awarded these bids to the lowest and most responsible contractor(s). The School Board received and accepted these bids at the December 7, 2021 board meeting.
Similar to Phase 1, Phase 2 is now in position to procure the funds required for this work. Also similar to Phase 1, the District plans to sell General Obligation Facilities Maintenance Bonds. The work will be done primarily at Lincoln Community Center and Roosevelt Elementary School starting this spring. Again, this new debt will be serviced through the District's LTFM revenue. Amending the District's LTFM revenue and expense plan to reflect Phase 2’s LTFM revenue will require board and MDE approval.
With rising expenses due to inflation, in order to secure favorable rates on the cost of borrowing and construction, it is very important the District secures this funding and adheres to the accepted bids as expeditiously as possible. The District will continue to work with its Municipal Advisor, PMA, on the bond sale and with ICS Facilities Management, on project design and construction.
Tonight’s recommendation for approval is the first part of a two-part process. Tonight, administration will recommend the board approve the parameters set in the attached resolution for the bond sale, and authorize the Superintendent/Director of Business Services and a Board Officer to execute a Bond Purchase Agreement for the stated purposes. The second part of the process will occur at a future school board meeting when the board will ratify the resolution for the award of the sale, anticipated to occur in April 2022. This resolution will approve the updated long term facilities maintenance 10-year plan, state the Board’s intention of borrowing funds up to $19,750,000, authorize application to the state credit enhancement program, and define parameters for the sale of the bonds.
Recommended Action:
The administration recommends that the School Board approve the attached resolution authorizing the Superintendent/Director of Business Services and Board Officer to execute a Bond Purchase Agreement within defined parameters, the updated LTFM 10 year plan, and application to the state credit enhancement program.