Kiski Area School District hopes to cash in on bond refinancing
The Kiski Area School Board is moving ahead with a bond refinancing that is expected to result in a major savings for the district.
The board has agreed to issue just under $33 million in general obligation bonds. The purpose is to refinance bonds issued in 2010.
Peggy Gillespie, the district’s business manager, said, “The (overall) savings to the district will range from $3 million to $5.5 million.”
The 2010 bond issue was floated to finance the transformation of North Washington Elementary School into what is now the Kiski Area Upper Elementary School. The school now houses all of the district’s fifth- and sixth-graders.
Also included in that 2010 borrowing was money for the renovation of two other elementary buildings: the former Allegheny-Hyde Park Elementary School in Allegheny Township, which was made into the Kiski Area North Elementary School, and the former Vandergrift Elementary School in Vandergrift, which is now the Kiski Area East Elementary School.
Gillespie said district officials have been considering a refinancing of that bond issue.
“We were looking to refinance in March of 2020, but the rates are just crazy now,” she said.
When the old issue was launched, Gillespie said the rates were 5.5% to 6.25%. Now, she said, they range from 3% to just over 4%.
The lower rates and the potential savings should be welcome news in the district, where Gillespie has been cautioning the board and district residents about an increasingly tighter financial situation.
For the 2018-19 school year, the district budget ran into a $1.3 million deficit. For the current school year, Gillespie predicted in June that it likely will face another deficit of about $1.7 million.
Depending on what interest rate the district will be able to lock in with the new bond issue, Gillespie said the district would be looking at a savings of anywhere from $230,000 to $490,000 per year.
She said the new bonds likely will be marketed sometime in October or November.