Lakeville Schools Just Sold $20.6 Million in Bonds
TLDR
The Lakeville school board approved a $20.6 million bond sale for long-term building maintenance (LTFM) projects.
TD Financial won the bid at a 3.5% tax-exempt interest rate. Seven bidders competed.
Moody’s affirmed the district’s A1 credit rating.
The 11-year bond will cost about $8.3 million in total interest. Part of it can be refinanced in 2033.
Lakeville Area Schools locked in $20.6 million for building maintenance on March 24, and the market cooperated — mostly.
The bond sale drew seven bids, which is a healthy turnout given how choppy financial markets have been lately. TD Financial out of New York won with the lowest bid at a 3.5% interest rate. That’s a touch higher than the 3.09% the district was hoping for during pre-sale estimates, but it’s still a historically low rate for tax-exempt bonds.
What This Money Is For
This isn’t the $139.6 million referendum you’ve been hearing about. That’s a separate vote happening May 12 for middle school expansions.
This $20.6 million is for LTFM — long-term facilities maintenance. Think roofs, HVAC systems, plumbing, electrical — the behind-the-scenes stuff that keeps 37-year-old buildings running. The district spends about $18 million a year on building maintenance, and these bonds fund the capital-intensive projects that can’t be covered by the annual budget.
The Numbers
The bond has an 11-year term, and the total interest cost comes to about $8.3 million. Director Thompson asked whether the board could reject the sale and try again later for a better rate. The financial advisor from Ehlers said yes technically — but warned it wouldn’t look great to the market and there’s no guarantee rates would improve.
Director Reichenberger, who previously worked at Ehlers, backed that up. Rates could just as easily go higher, and delaying could mean postponing maintenance projects that are already in the pipeline.
The district will have the option to refinance about $12 million of the bond starting in 2033 — potentially saving taxpayers money if rates drop by then.
Credit Rating Holds Steady
Moody’s affirmed the district’s A1 rating heading into the sale. They also noted that if the district’s fund balance ratio approaches 15%, that could trigger an upgrade. That’s a positive sign for Lakeville’s financial health.
The financial advisor confirmed that the bond sale’s tax impact still fits within what the district proposed to voters for the upcoming referendum — so there’s no double-dipping happening here.
The Bottom Line
This is the kind of boring-but-important school board action that keeps buildings from falling apart. The rate wasn’t as low as hoped, but seven bidders competing is a good sign, and 3.5% is still solid by historical standards.
If you’re a Lakeville taxpayer, the more consequential vote is coming May 12 with the $139.6 million referendum. This bond sale is a separate, routine part of maintaining existing facilities.
FAQ
Is this related to the $139.6 million referendum?
No. The LTFM bond is for maintaining existing buildings. The referendum is for expanding and renovating middle schools to handle enrollment growth. Two completely separate things.
How much will this cost me in taxes?
The financial advisor confirmed it fits within the existing tax impact projections. This isn’t adding a new tax — LTFM bonds are a regular part of the district’s capital plan.
Why didn’t they wait for a better rate?
The financial advisor and a board member with bond market experience both said timing the market is risky. Rates could go up, and delaying projects could cost more in the long run.
What’s an A1 rating mean?
It’s a credit rating from Moody’s that signals the district is a reliable borrower. A1 is strong — it helps the district get better interest rates when it borrows money.
Can the district refinance later?
Yes. Starting in 2033, the district can refinance about $12 million of this bond if interest rates have dropped. That could reduce the total cost to taxpayers.
