Norwin considers $9.9 million bond issue to pay for projects

Norwin may borrow $10 million in January to pay for a variety of capital improvement projects throughout the school district.

If the school board approves a $9.98 million bond issue, Norwin would be able to take advantage of low interest rates, Jamie Doyle, managing director for PFM Financial Advisors LLC of Harrisburg, told the school board this week.

“The markets look great. The (interest) rates have fallen since November 2018,” Doyle said. She told the school board she anticipates the Federal Reserve will cut interest rates again by the end of this year. Norwin also has an A+ bond rating, which makes the bonds more attractive to investors..

Doyle presented the board with an option for borrowing the money over a 19-year period, which would cost Norwin about $7.1 million in interest. To maintain the tax-exempt interest for the borrowers, Doyle said Norwin must have at least five percent of the total bond issue earmarked for a project cost, and spend 85 percent of the bond issue within three years.

If the board on Oct. 21 votes to authorize PFM Financial Advisors to proceed with preparing for the bond issue, it could be settled as early as Jan. 2, Doyle said.

The discussion about issuing bonds to raise money for capital improvements comes as Norwin is seeking proposals for a district-wide facilities plan and the bond issue will give Norwin a means to pay for it, Viola said. The high school swimming pool has been identified by a Lancaster consultant as needing repairs so it can meet current standards.

“We certainly have a lot of capital needs in the future … and in the present,” said school board member Robert Perkins.

“The timing appears to be right. There’s probably only one way interest rates will go in the future — up,” said Ryan Kirsch, business affairs director.

The Oct. 21 board meeting is just a few weeks before the Nov. 5 election. Two school board members, Perkins and Dennis Rittenhouse, are not seeking re-election. Two other board members, Darlene Ciocca and Tracey Czajkowski, are running for re-election. William Essay, a court-appointed member, is running for a full term.

Viola said she saw no reason to delay the vote until after the election. The new school board will take office in December.

“We can’t have everything in limbo, waiting for the election,” Viola said.

The school board next year could consider borrowing another $9.95 million in July to refinance existing debt that carries a higher interest rate, Doyle said.