South Winneshiek School Board Finalizes $10 Million Bond Sale for High School Expansion

The stories of Decorah matter. Help us cover them. CALMAR — The South Winneshiek Community School District Board of Directors voted 4-0 Wednesday, Oct. 14, to approve the sale of $10 million in general obligation school bonds, marking a significant step toward a planned $23.5 million renovation and expansion of the district's high school. The board awarded the bond sale to Robert W. Baird & Co. Inc., which submitted the winning bid with a true interest rate of 4.7063%. The sale represents the first major issuance from the $13 million bond referendum approved by district voters in November 2025. The proceeds will help finance improvements to the Calmar campus as the district prepares to transition seventh- and eighth-grade students to Calmar and convert the Ossian campus into a preschool through sixth-grade facility. Board President Wendy Mihm-Herold participated in the meeting via Zoom, providing the fourth member needed for a quorum. Board member Mitch Holthaus was absent because of illness. Competitive Bidding and Bond Insurance Matt Gillaspie, the district's municipal adviser with Piper Sandler, presented the results of five competitive bids received for the bond sale. In addition to Baird, bids were submitted by BOK Financial Securities, Northland Securities, Stifel Nicolaus & Co. and HilltopSecurities. Gillaspie described the five bids as a strong response from the municipal bond market. South Winneshiek received an underlying A- credit rating from S&P Global Ratings. However, Baird elected to purchase bond insurance, raising the insured rating to AA and helping secure a more favorable interest rate for the district. The sale also generated a premium of $143,787.90, bringing the total proceeds to $10,143,787.90. Gillaspie said the approximately 4.7% interest rate was near historical averages, although borrowing costs remain subject to broader economic conditions and uncertainty in financial markets. "This is all having to do with oil prices, for the most part, and Iran, and unknown things happening out there because of what's happening in Washington," Gillaspie said. How the Bond Proceeds Will Be Used Of the approximately $10.14 million generated by the sale, $9,783,806.65 will be available for capital improvement projects. The remaining proceeds will cover costs associated with issuing and selling the bonds. The financial breakdown includes: Capital improvements: $9,783,806.65 for construction and related project expenses. Underwriter's discount: $220,381.25 for underwriting and marketing the bonds, including $38,400 for bond insurance. Issuance costs: $139,600 for legal, financial advisory, credit rating and administrative services.Professional services associated with the issuance include Ahlers & Cooney, S&P Global Ratings, Piper Sandler and Missouri Bank. Major Renovations Planned for Calmar Campus The bond proceeds will support a substantial portion of the district's planned 81,610-square-foot renovation and expansion project. The improvements are intended to modernize aging facilities, expand educational opportunities and accommodate the district's planned grade-level reconfiguration. The project includes demolition of portions of the high school's east wing, which dates to the 1930s, along with renovations to create modern science, technology, engineering, arts and mathematics, or STEAM, laboratories and special education classrooms. Athletic improvements include a new competition gymnasium with seating for more than 1,000 spectators, an elevated walking track, a dedicated wrestling room with space for two mats and an expanded weight room. Other planned improvements include a secure main entrance, centralized administrative offices, a new library and learning center, collaborative learning spaces, four additional classrooms and a new kitchen and cafeteria commons area. The changes will support the district's plan to bring seventh- and eighth-grade students to the Calmar campus beginning with the 2028-29 school year, creating a seventh- through 12th-grade facility. District Plans Additional Bond Sales Gillaspie said the district structured its principal payments to remain within the voter-approved debt service levy limit of $2.70 per $1,000 of taxable property valuation. The district has already included $888,300 in its fiscal year 2027 budget to cover initial debt payments. Additional funding will be needed to complete the $23.5 million project. The district anticipates issuing approximately $6.63 million in sales tax bonds in February 2027, supported by revenues from the statewide Secure an Advanced Vision for Education, or SAVE, program and the district's physical plant and equipment levy, or PPEL. The remaining $3 million in voter-approved general obligation bonds is tentatively scheduled for issuance in spring 2028. Gillaspie said issuing the final $3 million will likely depend on growth in local property valuations over the next two years to ensure the district remains within the $2.70 debt service levy limit. However, stronger-than-anticipated valuation growth could allow the district to issue the remaining bonds sooner, potentially as early as summer 2027. Future Property Valuations Could Reduce Levy Rate Gillaspie also discussed how growth in taxable property valuations could affect the district's debt service levy over the 20-year repayment period. Because the bond payments are fixed, increases in the district's taxable valuation could allow the tax rate needed to meet those payments to fall below $2.70 per $1,000. If that occurs, future school boards could consider using a surplus levy to collect additional revenue within the authorized debt service levy limit and pay down outstanding bonds ahead of schedule. Gillaspie said some Iowa school districts have used similar strategies to shorten repayment schedules, potentially reducing long-term interest costs for taxpayers. He noted that accelerated repayment would depend on future property valuations and decisions made by the school board. The Oct. 14 approval allows the district to move forward with the initial bond issuance as it prepares for the next phases of construction and its planned transition to a seventh- through 12th-grade campus in Calmar. Don't miss what's happening around Decorah. Get the news in your inbox.