With millions of dollars in savings at stake, residents of the Montgomery-Lonsdale School District approved a $29.7 million bond proposal during a special election on Tuesday.

Taxpayers approved the measure with 1,106 votes in favor and 702 against — a 61 percent majority.

The proposal, which calls for much-needed structural and maintenance upgrades at the district’s combined middle and high school, was bolstered by a pair of loan programs that drastically softened its tax impact.

In August, Montgomery-Lonsdale was one of a dozen Minnesota school districts to be awarded school construction bonds at low- or no-interest for 16 years through a stimulus-funded tax credit to the institutions who finance the bonds. The state allowed the district to use the no-interest bonds for up to $10.7 million of its construction proposal.

The remaining loan amount will be issued in so-called Building America Bonds, which entitle the district to a rebate equal to 35 percent of its interest payments on the bonds for 25 years.

According to calculations by district financial consultants, the savings through reduced and rebated interest payments will amount to $10.5 million.

The yearly tax increase for the owner of a $175,000 home will be approximately $253; the increase on a $250,000 commercial property will amount to $614 per year.

In preparation for the election, district officials carried out an exhaustive public information campaign that included public meetings, presentations for community groups and several district-wide mailers.

District officials also conducted dozens of tours inside the secondary school, the core of which was built in 1936.

Construction will require tearing down two older sections of the high school. In the meantime, high school students will move to an expanded elementary school while middle school students will utilize the remaining high school.

The renovated facility is slated to open in the fall of 2012.

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