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Park Rapids Schools award bond sale at 2.24%

The low bid exceeded the expectations of school district staff and financial advisors.

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Baird of Red Bank, N.J. offered an unexpectedly low interest rate for the $30 million general obligation school building awarded Jan. 19, 2022 by the Park Rapids Area School Board.
Infographic by Park Rapids Enterprise staff

The Park Rapids School Board on Tuesday awarded the sale of general obligation school building bonds.

Jodie Zesbaugh, a senior municipal advisor with Ehlers Inc., announced the results of the sale of bond series 2022A with a total principal of $30 million – phase 1 of a $51.65 million bond issue that voters approved on Nov. 2, 2021.

Out of seven bids, the lowest bidder was Baird of Red Bank, N.J. with an interest rate of 2.2382%. This was well below the 2.42% percent Ehlers projected at the school board’s Dec. 20 meeting and the 2.5% estimate used in the district’s campaign literature for the bonding election.

Zesbaugh credited Superintendent Lance Bagstad and Business Manager Kent Fritze for performing well during the district’s bond rating interview with Standard and Poor’s Global Ratings. They reported relief and elation at the unexpected results of the sale, including the number of bids as well as Baird’s low offer.

Other bids came from Piper Sandler & Co., UBS Financial Services, RBC Capital Market, Wells Fargo Bank, J.P. Morgan Securities and Bank of America-Merrill Lynch, which submitted the highest bid at 2.4575%.

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The Baird bid included a reoffering premium of over $1.4 million on top of the $30 million bond principal. Accounting for investment earnings, discount bidding and legal/fiscal costs, this provides a net $31,087,317 deposited to the construction fund.

Zesbaugh said these premium dollars can be used to buy down project costs the district had planned to fund from other sources with a tax impact, such as the Long Term Facility Maintenance (LTFM) or capital facilities bonds.

School board member Dennis Dodge made a motion to award the sale to Baird, and the motion passed 5-0, absent board member Dana Kocka.

In two separate motions, the school board also designated TD Ameritrade as an official depository for investing school district funds through Ehlers, and declared the district’s intent to reimburse project expenses from bond proceeds.

“If you do end up issuing bonds under the LTFM program or the capital facilities program, and you incur some of those costs before we close on those bonds, then this covers you to be able to reimburse yourself from those bond proceeds,” Zesbaugh explained.

At a glance

In consent items and general business, the school board:

  • Heard High School Principal Jeff Johnson report that his school will start trying to sell the house being built by students in the building trades program earlier this year. He said the idea is to give buyers time to make plans to move the house during the summer.
  • Heard Johnson report that teachers made productive use of parent-teacher conference time to reach out to students’ families via phone and email, while less than 25% of parents attended in person.
  • Heard Middle School Principal Shawn Andress report that Upward Bound personnel from Bemidji State University will begin meeting with Century eighth graders on Jan. 25, part of a program that Andress said has led to many students entering and graduating from college in the past 15 years.
  • Heard Andress report that the area’s first Special Olympics unified teams are forming for basketball and bowling.
  • Heard Community Education Director Jill Dickinson report that 17 students have signed up for a new coding club.
  • Approved teacher lane changes for Brianna Anderson, Rachael Andersen, Meghan Eidsmoe, Stephen Funk, Shane Graham, Danielle Perry, Patrick Richard, Alexa Skajewski and Autumn Sturtz.
  • Acknowledged an enrollment review showing K-12 enrollment declined by a total of nine students from 1,603 to 1,594 between Dec. 16 and Jan. 11. Meanwhile, total district enrollment (including preschool, virtual academy and Alternative Learning Center students) decreased by 17 students from 1,757 to 1,740.
  • Approved an annual resolution directing administration to recommend curriculum, program and staffing adjustments for 2022-23.
  • Acknowledged donations totaling $7,450, including $1,200 in scholarships from the high school class of 1963. Also, the Wolf Lake Wolf Pack baseball club donated $2,500 to Century Elementary second and third grade staff, $1,000 each to the high school band and the boys and girls youth basketball programs, and $500 to the Century Middle School student council. 
  • Approved a quarterly report on the student activities accounts, showing receipts totaling $44,874 and expenses totaling $36,334.
  • Approved payments presented for January, totaling $1,290,081.

The school board’s next meeting is scheduled for 6 p.m. Monday, Feb. 7 at the Frank White Education Center.

Robin Fish is a staff reporter at the Park Rapids Enterprise. Contact him at rfish@parkrapidsenterprise.com or 218-252-3053.
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