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School bond sale planned as interest rate drops

South Washington County Schools is moving ahead with its middle school finance and construction plan.

As a citizen fight against the $96 million bond measure draws to a close, the District 833 School Board has authorized a bond sale to finance construction of a new Oltman Middle School in northwest Cottage Grove. The funding, narrowly approved by voters in the November election, also will pay for renovations to the existing Oltman building in St. Paul Park and improvements to Lake, Woodbury and Cottage Grove middle schools.

Board members authorized the sale of $94.07 million in general obligation school building bonds at their Jan. 7 meeting. The bond sale is scheduled for Feb. 4 but cannot take place until legal issues related to the election are resolved.

“Nothing will happen until we know that an appeal is definitely not taking place,” Superintendent Keith Jacobus said.

The district missed a bond sale opportunity in January due to the court challenge over the vote, but Joel Sutter of financial advisory firm Ehlers said interest rates have dropped to very low levels.

“We are optimistic that if we proceed with a bond sale now, the ultimate cost will be significantly less than what was estimated prior to the election,” Sutter said. Ehlers is facilitating the bond sale.

The district’s property tax impact estimates before the election were based on an interest rate of about 4.2 percent, District 833 Finance Director Dan Pyan said. Now it appears the bonds could be sold with an interest rate of about 3.6 percent.

The result is a drop from $104 to $82 annually in the property tax increase on a home valued at $250,000.

“Things are coming in lower than we talked about, which is great,” board member Michelle Witte said.

In addition to preparing a bond sale, the district continues to negotiate the purchase of 54 acres of Bailey Nurseries property along 65th Street in Cottage Grove for the new middle school. The district also will be preparing a final timeline for the various school projects, Jacobus said.

Scott Wente

Scott Wente has been editor at the South Washington County Bulletin since 2011. He worked as a reporter at other Forum Communications newspapers from 2003 to 2011.

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