Frazier may borrow $3M more for new school
Frazier School Board is considering borrowing an additional $3 million to help finance the construction of a $21.4 million middle/elementary school.
The school board recently floated an estimated $20 million bond for the project but could decide to borrow an additional $3 million instead of depleting $2 million from its capital reserve fund.
Alisha Phillips of Janney Montgomery presented the school board with options for financing the project at Thursday night's meeting.
“I understand that the school board opened the bids for the projects and you may need to borrow an additional $3 million for the project,” Phillips said.
“I think you should consider whether it's time to deplete the $2 million in the capital reserve fund when you have no idea how much money you will be receiving from the state in the future,” she said. “We're not assuming that you will receive any additional money from the state.”
Phillips said it is also unclear if or even when the school district will receive state reimbursement for construction projects through the Pennsylvania Department of Education, which has occurred in the past.
“There are stacks of requests and paperwork for school construction projects waiting to be approved by the state right now,” she said.
If the school board decides to borrow $3 million at the beginning of 2014, Phillips said the payments will be about $180,000 a year.
Business manager Kevin Mildren said one mill generates about $265,000 for the school district. The payment would amount to an estimated .68 mills, he said.
“As long as the school district doesn't close on the bond until January, the first payment will not be due until the 2014-2015 school year,” Phillips said.
Phillips said a principal wrap-around payment, which will require the school district to pay a larger amount, will not come due until 2033-2034.
Cindy Ekas is a contributing writer.