Millington Community Schools was both borrowing and selling money this past month.
And it got a pretty good deal both ways.
The school district got a 1.89 percent rate on the $1.5 million it is borrowing to cover expenses until membership state aid begins to flow in late October.
Millington also got about the same rate for the sinking fund bonds it was selling to fund, among other things, the renovation of the former Meachum Junior High School.
The first rate, struck with Eastern Michigan Bank of Croswell, was a bit higher than the 1.83 percent offered by the Michigan Finance Authority, part of the state Department of Treasury. But last year, Superintendent Larry Kroswek said in a memo to board of education members, the MFA originally offered a rate of 2.66 percent, but raised it to 2.69 percent in the final papers.
The second rate, on the sinking fund bonds, means more money and less costs for the school district.
“It is really going to help us,” Kroswek said.
School officials just closed on the bonds, getting $5,256,311.40 in three wire transfers Thursday morning. That is well over the $5 million the district expected to get from the bond sale. The sale was handled by Hutchinson, Shockey, Erley and Co., a municipal bond services firm with offices in Chicago and Milwaukee.
“We are in much better shape right now than we originally anticipated,” Kroswek said. “Obviously, the result is more cash on hand.”
School officials are in no hurry to spend this windfall because while the financial markets are favorable, the construction market is not.
“I have talked to our architect (Design Forum Inc. of Grand Rapids) and other architects in the business and they are advising people to wait until early fall to go out for bids,” Kroswek said.
So while school officials would like to get some work started so the community can see positive results from all of their support, Kroswek said they do not want to pay the high dollar.
“I just do not want to pay $350 per square foot for any new construction,” he said in a memo to board members, “when we could get it for less than $200 if the timing is right.”
He said many contractors and vendors are so busy they are pricing themselves out of work. Instead of just saying no, they will give estimates way above the price range and let the potential customer tell them no.
“Sometimes vendors and contractors cannot even get workers to the site,” Kroswek said, “because they have overextended themselves.”
That doesn’t mean things are not being done. School officials met with management leader Chip Hendrick, of R.C. Hendrick and Son Construction of Saginaw, and architect Neale Bauman to fine tune the plans for Meachum.
“The original designs were all of the wishes,” Kroswek said. “So now we are scaling it down to what we want and what we truly need. It will mean cost savings, but it still will be a brand-new building, or so.”
In some cases, the choices are clear. Rather than create a new library, the workers simply will renovate and update the school’s original library. Instead of creating an office for each Tuscola Intermediate School District itinerant staff, the workers will create one space they all can share.
“We would like to complete the Meachum project for around $4.5 or $4.7 million,” Kroswek said in the memo to board members. “We think we can get there.”
The sinking fund approved in the May election will raise $7.32 million the district will use to upgrade and renovate Meachum Junior High School, built in 1949, to house grades K-5. Those students will move from Kirk Elementary School, where the older, two-story section will be demolished. Those using space at Meachum – the district office, Head Start, early childhood special education, preschool , Mott Early College – then will move to the one-floor area of the Kirk building, which has the 12 newest classrooms, with the Kirk library turned into a school board meeting room.
The sinking fund also will raise money for other capital projects in the district.
Mark Haney is a staff writer for The Advertiser. He can be reached at email@example.com.