DAKOTA CITY — A series of building upgrades and construction projects for the Humboldt Community School District are one step closer to breaking ground.

The HCSD School Board approved the sale of $9,730,000 sales, services and use tax revenue bonds for the projects on Tuesday night.

The revenue bonds will not be repaid using property tax revenue, but instead use funds from the state penny sales tax, which does not require voter approval.

Matthew Gillaspie, managing director of Piper Sandler & Co. of Des Moines, gave the board an overview of the bond issuing process and repayment schedule on Tuesday.

The bonds will be purchased by a local bank, Bank Iowa, of Humboldt, rather than being offered in an open sale.

By going through a local bank for the bonds, the district is saving more than $200,000 in various fees usually incurred by the public sale of a revenue bond, according to Gillaspie.

Bank Iowa is offering a 20-year, 3.35% fixed-rate loan for the bonds.

“That rate will not change for the entire 20 years, unless the school board decides to refinance the bond sometime in the future,” Gillaspie said.

In recent years, similar school bonds have been sold at lower interest rates, but interest rates are on the rise, he said.

“Overall, this is a really very desirable outcome for the district,” Gillaspie said.

The projects the bonds will pay for are a new athletic training facility at the high school, two new classrooms and a gym at Taft Elementary School, a new secure front entrance at Humboldt High School, and four new classrooms at Humboldt Middle School.

In addition to the $9.7 million in revenue bonds, the projects will also be funded with $341,317 donations already received.

“I’m incredibly excited for us to be a part of this,” board president Tate Satern said.

The board also approved the 2022-2023 budget. The district will bring in $30,124,267 in funding sources, and expects to have $23,995,791 in expenses.

The property tax rate will be $12.31 per $1,000 taxable value, slightly down from this year’s rate of $12.35.