Woodbury's Math and Science Academy looking to expandWoodbury City Council approved a preliminary request by Math and Science Academy (MSA) to borrow $11.5 million through lease-revenue bonds to build a new gym in a second building adjacent to the current one.
By: Riham Feshir, Woodbury Bulletin
A Woodbury charter school plans to expand and continue growing, but before the final designs are in place, financing has to be in order.
Woodbury City Council approved a preliminary request by Math and Science Academy (MSA) to borrow $11.5 million through lease-revenue bonds to build a new gym in a second building adjacent to the current one.
The preliminary request was presented at the council meeting Wednesday, Aug. 8, where Community Development Director Dwight Picha explained that it’s not a general obligation bond to be paid by the city.
He said the city has issued similar bonds in the past for education facilities like St. Ambrose of Woodbury Catholic School and New Life Academy.
“We have done this and it’s consistent with the city’s policy,” Picha said.
Additionally, Ben Johnson of Kennedy and Graven, the city’s bond counsel, said it’s a fairly standard mechanism for nonprofits to access bonds through local government in order to borrow tax-exempt.
“There is no financial risk to the city … it’s kind of what the city does for nonprofits,” he added.
MSA used conduit bonds when it opened in 1999. The school refinanced in 2002 to get a lower interest rate, said Cyndi Bluhm, treasurer of the MSA Building Company, which owns the school.
The school wanted to take advantage of even lower interest rates this year by borrowing the estimated $11.5 million for the expansion, she added.
A portion of those funds will cover old bonds the school will then pay off, combining it all into one bond with the lower interest rate.
The school is planning to add a second building to house 10 additional classrooms and a gym totaling 28,000 square feet of space.
MSA currently leases a five-classroom building separate from the main one to house extra students.
By the time the school is done building the new site, which will sit on one acre, the lease for the current secondary building will be up in the fall of 2013, Bluhm said.
The main reason for the expansion is student growth and to provide an in-house gym so students will no longer have to walk to the YMCA, she said.
“We have been growing on purpose, we’ve added quite a bit of students the last three years,” she said, adding, “The school started at somewhere around 275, but that was 13 years ago. So we’ve grown about an average of 30 kids the last few years.”
The school’s enrollment for the coming school year is sitting at about 420 students, including approximately 35 who will participate in full-time post-secondary education, she said.
Bluhm said that funding from the state has been flat over the last few years and additional fundraising options have been limited.
“The best way for us to increase revenue is to increase kids,” she said.
MSA doesn’t have the ability to request a tax increase either, she added.
“In a charter school, we can’t do a referendum,” she said. “And we don’t have as many options as traditional schools.”
But Bluhm also emphasized that the expansion will allow more students on the waiting list to enroll.
The space will provide additional elective courses to MSA students as well, she said.
However, the school will continue to operate as a small charter school with an emphasis on math and sciences, said Bluhm, who’s also a parent of two MSA students.
“We do like being a small school,” she added.
Although the council accepted MSA’s proposal and preliminary request last week, the Planning Commission will still need to approve a conditional-use permit before the school can start building.
“I think it’s great to see schools expanding in our community,” Council Member Paul Rebholz said at the meeting.
MSA officials will work with an architect and construction manager to get a final cost and send over final documentation to the Minnesota Department of Education for review.