Bond refinancing efforts at Penn Hills School District moving forward

Efforts to refinance bonds for Penn Hills School District’s high school and elementary school, which largely contributed to its financial troubles, are moving forward.

District officials have selected the law firm of Wayne Gerhold as bond counsel, Buchanan, Ingersall & Rooney as disclosure counsel and Boenning & Scattergood as bond underwriter.

“I think they’re great because we’re saving millions of dollars,” board President Erin Vecchio said. “These interest rates are so low, we had to refinance.”

The board voted 8-0 at a special meeting Monday to authorize the aforementioned moves, which were recommended by Philadelphia-based Public Financial Management Co., a public financial advisory firm. Board member Cathy Mowry was absent.

Dan Matsook, the district’s state-appointed chief recovery officer, said the board also wanted to use companies not tied to state Auditor General Eugene DePasquale’s report or Allegheny County District Attorney Stephen Zappala’s grand jury report.

“The board was committed to bringing new faces to the table,” Matsook said.

Both reports were highly critical of district spending.

Penn Hills is about $172 million in debt with most of it from construction loans.

More than $100 million in bonds could be restructured to save Penn Hills millions.

Board members still have a big decision to make regarding the bonds, selecting a refinancing option.

One plan could save the district about $10 million. The other option would save less money in the long run, but create a reserve fund to help cash flow for other recovery initiatives.

PFM’s expected to work with Boenning & Scattergood to provide additional details about the two proposals.

The board will vote on a plan Oct. 30 .

Superintendent Nancy Hines said it may take a few months to finalize the refinancing.

“It is anticipated that the transactions will be complete by late December or early January,” Hines said. “Projected savings appear to be significant.”

The state Department of Education placed Penn Hills in financial recovery in January after being in financial watch since 2017.

Matsook, former Wilkinsburg superintendent, was appointed as the school district’s financial recovery officer in February.

District officials approved a financial recovery plan June 29. State Department of Education officials did the same in mid-July. It’s available for review on the district’s website, phsd.k12.pa.us.

District documents indicate the debt could be paid in full in 2042 as long as Penn Hills does not incur additional debt.