FAIRMONT – The Fairmont School Board covered two pieces of information received about the referendum process during its meeting on Tuesday.

The first was a review and comment from Minnesota’s Commissioner of Education Willie Jett II. The Fairmont School District submitted its $21.9 million referendum proposal, which includes $7.1 million for a High School Fine Arts addition, to the Minnesota Department of Education for consideration.

After looking it over, Commissioner Jett provided a positive review and comment for the proposal. Superintendent Andy Traetow said he has already started to receive good feedback from the community on the project.

“I did receive one question related to the definition of circulation areas here,” he said. “What that meant, and what it was accounted for is passing areas, wall structures, empty space between the walls for wiring, and all the things that go into building construction.”

Circulation areas take up over $2.7 million of the proposed $21.9 million total.

Following this, Ehlers Financial Advisor Shelby McQuay presented a pre-sale report on bonds for the project. The current projection for bond issuances would total $17.8 million, classified under health and safety and roofing.

“The pre-sale report just really lays out your responsibilities as a tax-exempt issuer,” she said. “The purpose of those bonds, the board authority granted to you by the legislature to issue those bonds, just by board approval, they’ll be issued for a term of 17 years and three months.”

The impact of the referendum would begin for the 2027 fiscal year, transitioning from a 10.69 percent tax rate in 2026 to 16.84 percent. From 2028 to 2039, the rate will hover around 15.76 percent. From 2040 to 2043, the rate will be at 14.61 percent, following which the bonds and project impact will be finished.

“We sell those bonds mid-October, and you’ll have the funds available in November so you can have those funds to start doing some work,” McQuay said.

Board Member Dan Brookens asked if there is a lot of interest and a competitive environment for bidding on these bonds. McQuay said there are several underwriters who are interested.

“Most of the national underwriters will bid on Minnesota school debt,” she said. “For the purposes of what it’s being used for, that’s not a huge factor. Minnesota debt, when they’re looking at investing in securities, they’re looking at the quality of the underlying rating itself. It’s our job as advisors to make sure that you’re not taking the full 30 year maturity schedule. That’s something that’s shorter.”

As it currently stands, the full bonds and debt would be finished in 17 years, from 2026 to 2043.

Board Member Mike Edman said both the school board and its financial advisors are thankful to avoid a 30-year debt.

“We’re not binding a future school board 20 years from now, with 10 years left of a 30-year debt service,” he said. “You would advise us not to do that, but we’re also not wanting to do that. It gives these things which will have a useful shelf life long beyond when they’re done to pay for.”

In addition to this, McQuay said they do have the ability to refinance at some points as well if they wish to restructure.

“There are limitations a little in how Minnesota allows you to access the levy to do that, but you have some flexibility within,” she said.

In other business at the meeting:

— Building and Grounds Director Tyler Garrison presented a full update on building projects done during the year. Garrison said this year consisted of several small projects, such as replacing two large areas of hallway flooring at the high school and painting. Garrison said in his time as Buildings Manager, he has seen costs rise tremendously in pretty much everything. He thanked his staff for everything they’ve been able to accomplish.