Off the passage of April’s Mend the Middle referendum supporting building-wide renovations to the St. Peter Middle School, the St. Peter School Board has authorized the sale of up to $34 million in general obligation bonds to enhance the school facilities and replace the building’s HVAC system.
The bond issuance approved by the School Board on June 17 combines the sale of up to $23.3 million in bonds financing the overhaul of the middle school’s HVAC system with up to $10.9 million in voter-approved bonds backing improvements to middle school classrooms and hallways and the construction of a new stairwell.
An advisor with Baird Financial told the St. Peter School Board that they combined the bonds after seeing an appetite from investors for larger transactions. In the current market environment, the advisor also anticipated the district could invest proceeds from the bond over the course of the construction season at a rate above what the district would be paying on its debt. By doing a single debt issuance now, he predicted the district would be $100,000 better off in its investment earnings.
With dollars from the bond issuance, St. Peter Public Schools plans to renovate the middle school in conjunction with a complete overhaul of the HVAC system over the summers of 2025 and 2026.
The School Board initially approved a $23.3 million investment into removing and replacing the middle school HVAC system in December, 2023 following increasing complaints from staff and students over wildly varying temperatures. While some classrooms face sweltering heat others are so cold that students would often wear their winter jackets at their desks.
The HVAC system is also prone to frequent malfunctions on account of its age. Since the middle school’s foundation in 1958, the boilers and ventilation have yet to be replaced. Not only has age worn down the building’s HVAC system, it has also made the system more difficult to repair as the necessary parts needed to fix it become more rare with time.
While the HVAC system is being replaced, the district plans to fully renovate the middle school classrooms with new paint and flooring, electrical outlets and storage space to accommodate the technological needs of a modern learning space.
The list of renovations covered by the referendum also includes refurbished hallways and lockers, equipment for the middle school art and science classrooms, the repair and replacement of windows, the construction of a new stairwell and a new ADA accessible layout for the bathrooms.
2024-2025 budget
After making millions of dollars in budget cuts and adjustments to shrink down a projected $2.2 million deficit, the St. Peter School Board approved a finalized budget for the 2024-2025 fiscal year which leaves the district’s fund balance in the green.
St. Peter Public Schools entered the budgetary season in a precarious financial position juggling rising costs from inflation and dwindling revenues stemming from a decline in student enrollment.
To offset the staggering $2.2 million debt, the School Board approved a budget plan last spring which eliminated several staff positions including a technology support specialist and an office support worker to cut costs. The plan also led the district to refrain from filling multiple vacancies on staff including a vacancy left by a retiring fifth-and sixth-grade band instructor at St. Peter Middle School. The cut has resulted in the fifth grade band program being eliminated while the 7-12 band program will be reorganized to include sixth graders.
Further reductions were made to the budget by cutting one of the two sections at the Rock Bend Alternative Learning Center. The cuts have the potential to reduce the program’s capacity by 13-15 students, but the district is also exploring different models of programming that would allow Rock Bend to retain its 25-student capacity with one teacher.
The finalized budget for the 2024-2025 school year anticipates the district running a slight deficit, spending around $27.15 million while making $27.13 million in revenues. To cover the difference, the district plans to pull nearly $177,000 from its unassigned fund balance.
“With our declining enrollment, what we’re doing is dipping into that savings and using some of that money — not all of it, but some of it — to keep us going,” said School Board member Drew Dixon. “And so that’s good because it’s a bit of a rainy day financially and we’ve got to do that. It’s the right thing to do, but you can’t do it forever.”
With the transfer of funds, the school’s fund balance is estimated to fall to $3.23 million, or about 43.5 days of operational expenses. That total falls short of the district’s goals to secure 60 days worth of savings, or $4.46 million.
But the St. Peter School District is likely to continue to dig into their coffers as they aim to roll out further budget adjustments next year to avert a predicted $2.7 million deficit over the next two fiscal years. Under a preliminary budget adjustment plan for fiscal year 2026, the general fund is expected to shrink to $1.7 million, or 22 days of operation, by 2027. The School Board has called for continued evaluation of the district’s budget to shore up the unassigned fund balance.
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