By Logan Wells, News Director | Logan@kymnradio.net
Last week, the Northfield School Board heard an update on the High School renovation project, mainly focusing on the project’s costs. The project which is expected to cost approximately $120 million and consists of renovations, expansions, and demolitions of parts of the high school. The school district will use bonds to fund the project, to reduce the cost of interest on the bonds, and the district will stagger when the bonds are sold. The first sale of the bonds will be this spring, with a second round of sales expected in the spring of 2027. By staggering the bond sale, the district will save having to pay the interest on the bonds for several years.
“And so again, that is an intentional strategy so that we don’t have a large pool of money earning interest unnecessarily because there’s arbitrage calculations and things that we aren’t allowed to exceed a certain amount, and it results in less interest being paid on the bonds over the life of that term.” – Northfield Public Schools Director of Finance Val Mertesdorf at the 11/25/2024 School Board Meeting
Superintendent of Schools Dr. Matt Hillmann also stated at the meeting that this timeline was a projection, and the district could alter when to sell the bonds if interest rates improved.
Also discussed at the meeting was the impact of Carleton College’s pledge of $2 million to be given to the project. The donation from Carleton will also be split up over the two bond sales, reducing the amount borrowed by $1 million at both sales. By staggering the cost this way the district is again saving money on the bonds:
Our original plan was to bond for $40 million and we’re actually just bonding for $39 (million) instead, and then we’re coordinating with Carlton to get the $1 million in the spring. Once we have that construction fund, that account open, and we can deposit it directly into that. And then, the same thing will happen May of 2027. We’ll take another million off of the the amount we’re bonding and the calculation Ellers did taking $2 million off their projection was about a $4 million overall savings. – Northfield Public Schools Director of Finance Val Mertesdorf at the 11/25/2024 School Board Meeting
Mertesdorf also noted the tax increase would only be reflected in property owner’s tax statements once the bonds were sold. This means the increases will be staggered over several years. At the December 9th school board meeting, more information about the exact amount levied will be reported to the board.
