South Fayette approves parameters resolution to sell bonds for school construction

The South Fayette Township School District board on Tuesday approved a parameters resolution that authorizes the district to issue general obligation bonds not to exceed $25 million to fund additions to the intermediate school, relocation of the bus depot and the design of a new elementary school.

The resolution gives the district flexibility to enter the market on the most favorable day and allows staff to finalize pricing and sizing within the set parameters. Bond counsel Anthony Ditka of Dinsmore and Scholl told the board the measure “authorizes the issuance of your 2025 general obligation bonds and pledges your full faith, credit, and tax, and power to the repayment of those bonds.”

The action follows a financing presentation by Jamie Doyle of PFM Financial Advisors, who described a five-step plan driven by an updated construction draw schedule from the district’s architect. Doyle said the board is likely to issue $20 million in bond proceeds in this step of the plan and that the updated draw schedule reduced the size of the current offering compared with earlier estimates.

Doyle also reviewed federal tax rules the district must meet for tax-exempt borrowings, including the “reasonable expectations” tests and the 24-month spending benchmarks that require the district to spend specified percentages of proceeds within 6, 12, 18 and 24 months to take advantage of spend-down exceptions. She warned that missing any of those benchmarks could require rebate of positive arbitrage to the Internal Revenue Service.

Ditka said a parameters resolution essentially creates a box large enough to guarantee the eventual bond sale fits the district’s serial maturity schedule. “We build that box just to make sure that we can fit inside,” he said. He also noted the procedural next step: a filing with the state Department of Community and Economic Development under the Local Government Unit Debt Act, which requires proofs of publication and a 20-day review period.

Doyle presented updated borrowing-base projections showing the district would retain borrowing capacity after the $20 million issue but will see a “pinch point” on July 1, 2026, if subsequent planned borrowings proceed as projected. In the presentation she showed remaining borrowing capacity of about $57.6 million immediately after the $20 million issue, declining to roughly $1.3 million after the planned borrowing in July 2026 under the current assumptions.

Board members voted 8-0 to adopt the parameters resolution. Ditka and Doyle said, if approved, closing was likely around June 24 subject to market conditions and the state review. Ditka also reported the district’s credit rating had been finalized that day at AA2, which he said reflected positively on the district’s credit profile.

The parameters resolution allows district officers to complete all closing steps without an additional board meeting once market pricing and final sale documents are prepared. The state filing required by the Local Government Unit Debt Act remains a procedural review and does not alter the district’s discretion over project decisions.

The approval clears the path for the district to enter the market under the terms presented and to proceed with the planned capital projects, subject to final bids, market conditions and state procedural approval.