Montgomery-Lonsdale School District residents have a $10.5-million decision to make on Tuesday.

That’s when the district is hosting a special election for its $29.7 million bond proposal; a proposal that would provide for much-needed structural repairs at the district’s combined middle and high school, and is bolstered by two cost-saving, stimulus-funded loan programs that could save taxpayers millions.

But timing is critical.

If voters reject Tuesday’s referendum, the district will likely lose its opportunity to participate in both loan programs.

“We’re concerned and cautious because we know this isn’t the best time to raise taxes,” said Supt. Corey Lunn. “But there are thousands of dollars at stake for every taxpayer.”

In 2008, a district facility taskforce — made up of administrators, school staff, community members and municipal leaders — determined that the secondary facility was in need of significant structural repair. At the same time, the taskforce also determined that building a new secondary school would not be financially responsible.

Then 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.

“We’ve tried to find that balance to get the best deal,” Lunn said.

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

School officials have also conducted dozens of tours inside the district’s combined middle and high school, the core of which was built in 1936. Inside, visitors could see the deteriorating walls, ceiling leaks, outdated boilers and unsafe ventilation systems for themselves.

“We’ve taken the approach of leaving no rock unturned,” Lunn said. “There were a lot of efforts to get people the information they need.”

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

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

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

Polls are open for the election from 7 a.m. to 8 p.m. Rice County residents will vote at the Lonsdale City Hall. Le Sueur County residents will vote at the Montgomery City Hall.