Penn-Trafford considers borrowing while interest rates are low
Low interest rates are tempting the Penn-Trafford School Board to consider borrowing some money before the end of the year to help prepare for a possible building project.
The school board is expected to consider a nonbinding resolution at its Oct. 8 meeting for administrators to research bond rates.
Penn-Trafford has about $9 million remaining in debt from two previous bonds, which will be paid off in May 2015.
Administrators said they will give the board options for possible borrowing that would be no more expensive than the $2.7 million the district is paying for debt service in this year's budget. No payments on any new borrowing would be required until the current debt is paid off, said Brett Lago, the district's director of financial planning and business affairs.
Interest rates for a $10-million bond could be less than 2 percent, Lago said.
Depending on possible reimbursement from the state, the district might be available to borrow as much as $60 million while maintaining the current property-tax rates, officials said.
“It may make sense to start borrowing some money before the end of this year to take advantage of the bank-qualified rate, and then we can do another borrowing next year if we're really intent on moving forward,” Lago said.
Penn-Trafford's schools have an average age of nearly 60 years, with the high school – built in 1972 – being the newest. The oldest are McCullough Elementary, which is 88 years old and Penn Middle School, which was built in 1937. The last series of renovations in the district was in 1995.
“If we're going to move forward, everyone has to recognize the fact that we're sitting in buildings that are deteriorating and need work,” said school board member Dallas Leonard, chairman of the building and grounds committee.
A consulting architect for the district has filed an outline of a potential construction project with the state as a placeholder for state reimbursement, which has been frozen.
Superintendent Tom Butler said he will give a detailed report on his vision for the district's buildings during a November meeting. Even if the board approves research for bond rates, the district isn't committed to a project, he said.
Chris Foreman is a staff writer for Trib Total Media. He can be reached at 412-856-7400 ext. 8671 or firstname.lastname@example.org.