The Rugby School District has eyed nearly $6 million in interest-free bonds for extensive building improvements at Rugby Jr.-Sr. High as well as some work at Ely Elementary, but school officials know they have several steps to complete before submitting a formal application to access the Qualified School Construction Bonds as provided under the federal government’s stimulus plan and administered by the state Department of Public Instruction.

One of those steps is deciding just how much renovation the school board wants to complete as well as prioritizing that work. A Minot architectural firm has been contracted to draft a facilities improvement plan and the board is planning to meet with the architect early next month to review it.

Some of the immediate building upgrades include removing asbestos flooring and ceilings and replacing lighting, and heating and cooling systems in several classrooms in the 1957 wing of the Jr.-Sr. High. Other work is replacing windows and installing new heating and cooling systems in several rooms at Ely Elementary. A plan to build a new cafeteria in the courtyard just west of the gym commons area is also part of the architect’s initial plan. All totaled, the project’s estimated cost is just $6 million.

The board also wants to form as advisory committee made up of about 12 district residents to listen to the architect’s plans next month and give feedback to the board about the proposed improvements. This group would likely include business leaders parents, educators and other citizens.

David Anderson, board member, said they give a community’s perspective on this project, including whether citizens would support it, especially if it requires additional mills.

Jeff Lind, school superintendent, added this board would also be one of the ways to publicize the project. Chuck Volk, board member said it would be wise for the district to set up public information meetings in the to also bring to light the need for the work and the financial benefits of proceeding now with access to the zero-interest bonds.

At its October 13 meeting, the school board met with Scott Wegner, of Cook, Wegner and Wike, who specialize bond sales.

Wegner reviewed the Qualified School Construction Bond program. There is approximately $50 million available to state schools over a two-year period. The district has inquired to DPI about the availability of the bonds and has been given initial approval for up to $6 million. Some of those funds would come from the remaining allocation this year and the remainder will out of next year’s allocation.

Wegner explained what makes the interest-free bonds appealing to buyers is they receive a tax credit and that offsets the need for interest to be placed on the bonds to the borrowers. Through a sinking principal plan, district will actually be able to generate earnings from the interest gained on the bonds. As a result the district won’t actually have to pay off 100 percent of the principal, but likely 95 percent.

The bonds would have to be sold by the end of next year, Wegner understands, but the district would have up to three years to actually begin construction.

There are a few options in levying mills to cover the sale of bonds. The district could call for a general obligation bond that would need 60 percent approval, or a supermajority, by district voters.

Another is tapping into the district’s established building fund levy which is five mills and amounts to about $60,000. The district could consider raising that levy to as high as 20 mills, but that would also require district voter approval.

Another source Wegner pointed out is levying up to 15 additional mills, which is allowed by the state DPI, to remove hazardous materials, including asbestos, and improve air quality in school by replacing heating and cooling systems. The district would not need a vote to levy the 15 mills which could be in place for 15 years. It would only take a board resolution.

Since much of the planned renovation includes asbestos removal and improving air quality in classrooms, this option seems very favorable to board members.

Between the district’s building levy and the 15 mills that could be levied to remove asbestos and replace heating and cooling systems, the district potentially has 20 mills it can set aside for the project without having to go to voters.

Making all the suggested building improvements at a price tag of just under $6 million it estimated to require 52 additional mills each year, according school officials. As a result, the district would need to go to voters, to approve levying more mills.

However, before the board looks ahead to a potential vote to help fund what would be the largest school renovation in the district’s history, deciding the scope of the project and getting input from an advisory committee is first on their minds.