Elizabethtown Area SD consultants outline $160M borrowing cap, recommend 4.3% preliminary tax increase

At a district financial workshop, external advisors told the Elizabethtown Area School District that statutory borrowing capacity and multi‑year planning will determine how much of a proposed large building project the district can finance without seeking voter approval.

The district’s chief financial officer opened the meeting and laid out audited balances, saying, "As of the June '25, our general fund balance is at $5,200,000" and that the 2025–26 budget anticipates a $3.5 million fund balance. The board had previously received three proposals from RLPS for project options.

Alarm Stadel, one of three consultants introduced by the CFO, reviewed the district’s existing debt and financing mechanics and said the district currently carries about $52.2 million in outstanding principal. Brad Remick, another consultant, walked the board through the Commonwealth’s statutory non‑electoral debt calculation, which uses a 225% multiplier on averaged revenues. Remick said that calculation yields a near‑term limit of about $176 million in non‑electoral borrowing capacity, leaving roughly $126 million of unused capacity after accounting for existing debt.

The consultants modeled a phased financing approach, with layered bond issues across 2028–2031 to match architect draw schedules and avoid paying interest on unused proceeds. Under one example financing plan the district’s annual debt service would rise from roughly $4 million today to about $12–12.6 million once all issues were in place. Consultants described a "wrap‑around" structure that staggers principal and interest so the near‑term budget impacts are smaller than with a straight 25–30 year level amortization.

Consultants stressed that state plancon (PDE) subsidies for new projects have been largely suspended and advised the district to assume 100% of future debt service is local. "PDE reimbursement on this project will be 0. I can almost guarantee," Alarm Stadel said.

They also noted a gap between a high‑end $175 million new‑build estimate and a conservative $160 million borrowing case: "somewhere in the neighborhood of about $12,000,000 of district cash will also be needed," the consultants said, and recommended earmarking budget surpluses for capital to reduce final borrowing needs.

On funding options, the advisors said grants and capital campaigns are unlikely to cover a project of this scale. The consultants and the CFO recommended setting a higher preliminary tax increase to create operating room for future debt service: the CFO summarized the team’s advice that the board "go with the 4 3," i.e., a 4.3% preliminary tax increase this budget cycle to allow a roughly 2.5% annual set‑aside toward long‑term debt service.

They warned the board about credit implications: adding significant new debt could put "downward pressure on the credit rating," the consultants said, which would raise borrowing costs (they estimated roughly 15 basis points per rating notch). For that reason, they urged a clear multi‑year payment plan and steady reserve trends before seeking ratings.

The consultants recommended a short consultant engagement with RLPS before committing to a full architectural contract. They said an RLPS consulting contract will be placed on a February agenda so the district can begin a 30–45 day assessment to refine scope and timing. The CFO asked board members to forward additional questions to staff so answers can be presented publicly at future meetings.

The workshop produced no binding vote; consultants and staff framed the presentation as a planning step to inform the board’s budget decisions and potential future bond authorizations.