The Oelwein School Board will hold a public hearing on the proposed issuance of up to $12.75 million school infrastructure sales tax revenue bonds to finance plans to renovate to Wings Park Elementary and Oelwein High School.
The hearing will be at the board meeting on Monday, Dec. 21. The time was moved up to 5 p.m. to avoid conflicting with the 7 p.m. scheduled high school vocal concert.
Additionally, Piper Sandler was approved as bonding agent and Ahlers and Cooney PC as bonding counsel.
“Once you set the hearing date and the amount you’re asking for, that is now your ceiling, so you can’t go above that, so (we) worked with Matt (Gillaspie) and Piper Sandler to set that limit to what we consider the absolute max,” Superintendent Josh Ehn told the school board Monday. “Doesn’t mean we have to borrow that, it’s like setting the credit limit kind of.
I don’t think we need to go that high but that’s what they recommend setting it at.”
There will be “no new taxes” to pay for the two renovation projects, according to Ehn. “We are projecting 14 years (bond payback) and plan to pay principal down early when revenues exceed projections.”
Ehn described how the process will work for the Daily Register.
“We go to the open market to bid for loans (bonds),” he said. “We maximize our borrowing capital by setting the ceiling, telling the public in a meeting ‘we are going to borrow money, it won’t exceed X.’ Then we will collect bids and also prep construction bids so we borrow what we need.
“We will pay cash on hand for many of the portions and are still projecting to borrow around $10 million with the option of alternate items that could push the bonds up,” Ehn said. “This is why we set the ceiling.”
Gillaspie, a managing director in public education finance at Piper Sandler, presented to the school board in May a model to pay back a $10 million bond over 10 years using SAVE statewide penny sales tax, assuming sales tax revenue did not dip below $800,000.
Repaying it over 14 years should give the district a slightly lower monthly rate, compared to 10 years.
Mark Pfister of Boyd Jones, the district-contracted construction management firm, told the board once the drawings are finished he will create bid packages for all of them. He anticipates having some 18 bid packages on the Wings Park renovation, including the main “general trades” package no. 10, which covers most of the work, and for the high school to have four bid packages including the general trades package.
Pfister reported the company is seeing “plenty of interest” in jobs: “We’re going to do everything we can as far as making sure you have good coverage on it.”
The construction superintendent and project engineer will locate on site and will control the scheduling and update the daily tracking on a document in the construction trailer. Pfister will also track where they are related to the schedule, but remotely.
As to why they broke up the jobs, Pfister said, “We’re trying to give as many opportunities as we can to spread out the work or combine it.” Contractors could choose to bid on one, or both projects, or on types of craftsmanship in which they specialize.
As of Oct. 21, construction costs are an estimated $9.961 million, plus itemized project costs of $1.308 million, that adds up to $11.269 million, without any bid alternate add-ons.
Without alternates or itemized costs, the Oct. 21 re-estimate for the Wings Park portion is $8.65 million, according to Boyd Jones construction management, and the high school base re-estimate plus a fire alarm system is $1.3 million.
According to the timeline presented in October, the construction managers had anticipated a bid date in January. Wings Park construction could start by April and work at the high school by June.