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Cheltenham SD proposes two‑step $30 million borrowing for Glenside, Cedarbrook projects
Summary
District finance staff and PFM outlined a two‑step bond plan totaling about $30 million to fund Glenside and Cedarbrook, with a $50 million maximum parameters resolution (including a possible 2019 refunding) to be considered Oct. 14; staff estimated roughly a 1% tax increase tied to early debt service.
Cheltenham School District finance staff and Benjamin, a financial advisor with PFM, presented a two‑step borrowing plan on Oct. 7 to fund the Glenside and Cedarbrook projects that would total about $30,000,000 and use a maximum parameters resolution up to $50,000,000.
Benjamin, financial advisor with PFM, summarized the proposal: “So if you total those 2 projects, you come up with about $30,000,000.” He described a two‑step approach to phase in debt service so the district would not incur the full interest burden at once.
The plan calls for a bank‑qualified first issuance of about $9,750,000 that would settle Dec. 1, 2025, followed by a larger non‑bank‑qualified second borrowing in 2026 of roughly $20,250,000 once final project costs are known. Both borrowings are illustrated on a 25‑year level amortization schedule. Benjamin explained the purpose of a maximum parameters resolution: it sets upper limits so the district can “time the market” and avoid having to price the bonds only on scheduled board meeting dates.
The parameters schedule presented to the board totals $50,000,000; the package includes the two new issuances and an option to refinance callable series from 2019 if market conditions make that economically advantageous. Benjamin said amounts included for the parameters resolution are typically higher than the actual borrowing and that “whatever you don't end up borrowing gets written off by bond counsel.”
Josh, a district staff member, reviewed projected budget effects and said the first year of the plan would not affect the current fiscal 2025‑26 bottom line but would add debt service in later years. “So, in essence, it's roughly 1% tax increase to absorb this this first, year's bond issuance for the 06/03/2027, school year,” Josh said, estimating roughly $900,000 in additional local effort in the first year after full phasing-in. Another participant later cited an additional $1,213,000 the following year if all borrowings occur as modeled.
Key timeline items Benjamin and staff identified: the board would consider a maximum parameters resolution at the Oct. 14 meeting; if approved, the sale would be priced in mid‑November (or when market conditions are favorable); and the first issuance would close in December 2025, with a settlement date shown as Dec. 1, 2025. Bond counsel was expected to attend the Oct. 14 meeting to present the parameters resolution for formal vote.
Board members and staff asked clarifying questions about bank‑qualified status (issuances below $10,000,000 in a calendar year), the district’s outstanding callable issues from 2019, and how new local effort would be reflected in future budget documents. Benjamin noted the district already monitors outstanding callable bonds and would only act on refundings if present value savings were meaningful.
Next steps: the district intends to place the parameters resolution on the Oct. 14 agenda for formal consideration and to post the presentation in BoardDocs. The resolution would authorize the financing parameters and allow advisors and bond counsel to time the sale to market conditions.
