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Susquehanna Township board authorizes work on up to $15 million school borrowing
Summary
School board authorized staff to begin paperwork for a potential bond issue of up to $15 million to fund capital projects, with financial advisers recommending a "wraparound" structure to limit near-term budget impact and take advantage of small-issuer tax rules.
The Susquehanna Township School District board voted to authorize staff and its financing team to begin preparations for a potential general-obligation borrowing of up to $15,000,000 to fund planned capital projects.
Financial adviser Brad Remick of Raymond James told the board the district currently has multiple outstanding debt issues and that advisers recommend keeping the new issue at $15 million or less to qualify as a "small issue" under tax rules. That designation, Remick said, would allow the district to retain investment earnings on unspent bond proceeds for up to three years. Remick and a colleague summarized projected debt-service schedules and described a wraparound structure that keeps early-year payments lower and shifts larger payments to later years when other debt retires.
Remick and Lou (financial adviser) discussed current market conditions and timing. Lou said recent weak national jobs data pushed municipal interest rates lower and that advisers are preparing to lock rates possibly in mid-October if the board directs them to proceed. Both advisers said the process from paperwork start to closing typically takes about 60–90 days for the borrowing and that state review after pricing usually takes roughly 30 days.
Bond counsel Erica Weibel will prepare the required parameters resolution and the public advertisement the board must publish before the formal vote, the advisers said. Remick reiterated that the September 22 meeting would be the board’s opportunity to consider a parameters resolution and a not-to-exceed amount; the board would not be locking in a final interest rate that night.
At the board’s September meeting the motion to authorize the financing work was called and then approved on a roll call that recorded eight yes votes and one absence. The board did not take any action to sell or price bonds that night; it authorized staff to begin the financing process and prepare materials for future action.
Board President Dr. Moreno and district administration were listed by advisers as contacts to coordinate documents, and advisers said they will update the board if refinancing opportunities arise for outstanding debt.
