USD-373 provides breakdown of bond issue

By Adam Strunk
USD-373 held the first in a series of open houses to answer questions about an $8.4 million bond issue to rebuild Lindley Hall and make repairs to Santa Fe Middle School.
According to information at the open house, the issue would upgrade and extend the lifespans of both buildings by at least 30 years. The project would also allow students to have on-site physical education classes, something that’s currently not taking place.
Lindley Hall, which functioned as a gym for Santa Fe 5/6 Center, is closed after a storm tore off part of the building’s facade and a structural study found the gym unsafe to be occupied.

The get
The majority of the costs associated with the bond issue, $6.03 million would repair and upgrade Lindley Hall.
That includes structure and envelope repair-$2.37 million, Americans with Disabilities Act improvements – $416,000, and demolition and renovation of the southwest and southwest corner of the building to renovate flexible education space – $644,000.
The work on Lindley Hall would also include roofing, plumbing, electrical, heating, venting and air conditioning, and pavement improvements.
Vince Haines of Gravity Works- the architect for the project – said that the cost of building a new gym would have been similar.
Haines said that the advantage of renovating Lindley Hall was that a historic building would be preserved and children would be able to use it sooner than if a new gym was built.
Past estimates provided by the school district put the cost of building a new gym, about 3,000 square feet smaller, between $7.3 and $8.1 million. That includes the cost of razing Lindley Hall.
Repair on Santa Fe would account for $1.69 million in construction costs and mostly involve material work such as the tuck-point, seal and stabilization of walls account for $1.2 million of repair costs.
The costs of both sets of repairs include another 5 percent contingency buffer, in case the project runs over budget. 15 percent of the total project costs, $861,000 are for designated for design and third party work.
The total cost of the bond also pays for interest rates and assumes a 4-5 percent interest rate over the 15-year duration of the bond.

The financial impact

The bond issue will not increase the amount of taxes property owners currently pay the school district. The district currently levies 11.74 mills to afford its existing bond debt.
District bond counsel Steve Shogren, of Stifel Institutional, said that property valuations have increased enough for the district to maintain the amount it levies for bond and interest payments to stay the same while affording the additional payments on that project.
He said otherwise those additional revenues could be applied to the existing bond debt to pay it off earlier.
The payments that the district will make on the bond issue represent three mills of taxing authority on average, he said.
In 2026, the district’s existing bond debt is set to expire. Once it does, the district will continue to have to levy 2.86 mills to make payments on the proposed bond until 2037, should it pass.

The future
The current bond doesn’t address most of the other facility issues facing the school district at the high school and other buildings and a larger bond issue will likely be created in the future to address those needs.
Whether the proposed bond passes or not, with Santa Fe Middle School lacking a gym, at some point it seems likely the district would have to spend money to address the issue.
Shogren noted that costs were likely to rise in the coming years.
The U.S. Federal Reserve has been increasing interest rates to try to slow down the current growth in inflation.
Shogren was asked what a larger bond issue would cost in the future using current numbers. He said that using current numbers a $64 million bond issue would require a levy of about 20 mills to support. That’s roughly 8 mills more than the existing levy for bond debt.
The proposed bond will go to a vote at the general election on Nov. 8.

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