Memorial Middle School bonds sold at 4.76%

The city has sold $23-million worth of general obligation municipal bonds to fund the lion's share of the rebuilding of Memorial Middle School, City Manager Eileen Cabanel reported last night. The interest rate the city had to settle for was a little higher than originally projected but the city will still save as much as $6-million in long-term interest costs by selling the bonds now, as opposed to waiting until next year, as originally planned, Cabanel told City Council.

The bonds have a maturation date 30-years in the future.

Cabanel said the original forecast, provided by First Southwest Company, that the city could be expected to pay 4.32-interest turned out to be "more optimistic than it should have been" as the bonds were actually sold at 4.76-percent. The difference is the 2007-2008 city/school operating budgets just passed two weeks ago is now some $67,000 light in the principal and interest department and Cabanel said the additional funds will just have to found and transfered from elsewhere in the budget.

Councilor Henry Lipman (Ward 3), who chairs council's subcommittee on Finance, said the actual interest rate the city will pay is still a full point under the 5.75-percent rate that Southwest projected Laconia might well have been facing in mid 2008.

When the decision to sell the bonds now was made, it was estimated the city might save as much as $8-million in long-term carrying costs. "Now we'll only have $6-million in savings," Cabanel said with a smile.

Some site work has already been done on the expanded middle school campus, with actual construction work scheduled to begin in July. The razing of the current school and building of a new one on more-or-less the same site is being done in phases so classes can continue during the project. Completion is not expected until a little over two years from now.

The first phase of construction will be to build a new classroom wing in the Opechee Park space between the current school and Colby (Little League) Field. Once that building is complete the current (north) classroom wing will be torn down to make way for new core facilities, such as cafeteria, multi-purpose room and gym.

The current gym will be the last part of the old structure to be razed.

Harvey Construction Company of Bedford is the general contractor on the job.