Earth moving equipment will be at the site of the new Greene County High School next week and progress on site preparation will be obvious.
Meanwhile, the Greene County Schools board did important behind the scenes work at its regular meeting April 17. The board approved the sale of $5.5 million in general obligation bonds, the second of two bond issues for the project.
The low bidder was Robert W. Baird & Company of Milwaukee, WI, with a final interest rate of 2.37 percent. The district will pay $751,753 net interest if the entire 20-year repayment time is used.
Matt Gillaspie of Piper Jaffray led board members through pages of complex financial information. Including a premium (an incentive) paid up front by Baird, the bond sale is generating $5.8 million for the project. The funds will be paid to the district in June and will be held in interest bearing accounts until actual payments for construction are made.
The bonds will be callable June 1, 2025; at that time the district could pay them off early or refinance them, depending on the district’s financial situation and the bond market at the time.
Gillaspie explained projections based on increasing property valuations in the district and scenarios in which the board could levy less than the $2.70 (per thousand dollars of taxable valuation) approved by the voters a year ago, or continue levying the full amount and pay off the bond early. Paying the debt early would save money.
In August the board approved the sale of $16 million in bonds at an interest rate of 3.379 percent to Janney Montgomery Scott LLC of Philadelphia, PA. The net interest on those bonds was pegged at $7,165,000.
The board also received the good news that after value engineering (looking for alternatives to specs in the initial bid documents to reduce cost) construction costs have been reduced $600,928.
The project was estimated at $35,480,000. When bids came in, the total cost was $37,073,992. The board immediately took out wood veneer on the auditorium ceiling at a savings of $350,000, leaving the project $1,593,992 over budget.
The largest savings will come from changing the energy recovery system on some of the air handling units at a savings of $225,000. Another area identified for savings is screwing down the roof material on the gym rather than fully adhering it. Board member Sam
Harding explained a mechanically fastened roof sometimes creates a vibrating noise, but that won’t matter much in the gym. Savings there will be $50,000.
Harding said the contractor, Henkel Construction of Ames, “has been very honest and straight forward with all of it. It’s been a nice process.” He said many of Henkel’s subcontractors also found savings as they got more specific in their design.
Including the cost savings, $265,500 net premiums on the 2018 and 2019 bond sales, and projected interest income of $408,600, the project is over budget by only $318,968. That’s 0.8 percent of the total cost of the project.
Additionally, the budget includes $228,000 for “over excavation,” which may not be needed depending on soil conditions, and $934,000 for contingencies. Harding doesn’t expect much of the contingency fund will be used. He said that with a new building “there shouldn’t be any surprises that pop up. There might be some things we want to upgrade or do different, but we aren’t going to spend $1 million on it.”
“To me, it’s looking very positive,” Christensen said about the project budget.
