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Norwin School District refinances debt, saves about $400,000

Joe Napsha
| Tuesday, Oct. 17, 2017, 1:12 p.m.

The Norwin School District will refinance about $20.7 million in debt, saving an estimated $408,600 in payments over the life of the bond refinancing.

The school board approved the refinancing that will save the district about $21,000 in annual debt payments over the 15-year life of the refinancing. Annual debt payments will range from an estimated $29,300 in 2018 to $20,100 in 2032, according to PFM Financial Advisors LLC of Harrisburg, which is handling the bond refinancing.

Norwin is expected to pay $23.9 million on the existing debt, including $8.1 million in interest payments.

Interest rates on the bond issue will be locked in Thursday, Jamie Doyle, managing director for PFM Financial Advisors, told the school board this week. The refinancing will not provide Norwin with any new revenue, Doyle said.

The interest rates rose slightly since Sept. 11, when Doyle first made a presentation on refinancing to the board. They have fallen back to those same levels, she said.

Ryan Kirsch, Norwin's director of business affairs, said he expects interest rates to be below 3 percent.

While Norwin has an A1 bond rating, the outlook on that underlying bond rating remains negative because of the district's narrowing financial position, according to Moody's Investors Service, which provides credit ratings and risk analysis. Moody's says that limits Norwin's overall financing flexibility in the near term.

Moody's report, included in the PFM document, says Norwin's financial reserves are “narrow” and the trend has been negative for several years. Over the past five years, the use of the fund balance has been greater than budgeted, the report said.

“Its low reserves and trend of operating deficits leave it poorly positioned for an economic downturn or unexpected budget variance,” according to the report.

Moody's would like to see “a rebuilding of the (financial) reserves over the next few years,” Doyle said.

A Norwin spokesman said the administration believes the Moody's report accurately reflects the district's current position and outlook, which includes an A1 rating.

“Norwin School District faces financial challenges that are common to many other Pennsylvania school districts that have been assigned a similar outlook rating,” the spokesman said.

The report noted that “stronger managerial controls” were a positive factor, and strong growth in the assessed value of property in the district has driven real-estate tax revenue higher.

Norwin's credit strengths lie in the solid tax base with positive residential developments, stronger wealth and income levels compared to rated peer districts and limited pressure from charter schools, Moody's stated.

Joe Napsha is a Tribune-Review staff writer. Reach him at 724-836-5252 or

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