Manheim Township School Board hears Raymond James plan for up to $75 million in borrowing; $1M moved to capital reserve

Manheim Township School District board members heard a detailed presentation from financial advisors Raymond James on the mechanics and implications of borrowing for planned campus projects, including a hypothetical plan to issue roughly $75 million in bonds over the next three years.

The presentation, given by the Raymond James team, explained why districts borrow, federal tax rules that require an expectation to spend 85% of bond proceeds within three years and to incur a binding obligation for at least 5% within six months, and how bond sizing and timing respond to actual project bids. "This gets into the weeds a little bit on how we're going to potentially finance approximately $75,000,000 of capital needs," the advisor said, adding the district will likely use a mix of cash and bond proceeds and build interest-rate contingencies into the models.

The firm noted Manheim Township's strong credit position — a Moody's rating of AA2 — and that the district has budgeted debt service just shy of $14 million, which provides some capacity to add new debt without an immediate, large millage increase. Raymond James presented an illustrative scenario that spreads the new debt service across six years and estimated a modest tax effect in that model (about a 0.3% equivalent tax increase spread across the period, roughly $250,000 annually in the example), while stressing the actual impact will depend on bid results and final bond structuring.

Board members pressed on timing and compliance with IRS spending tests. One member raised concern that if proceeds were received in May 2026 the district would need to obligate at least 5% by November 2026; staff replied that planned campus master plan work and near-term bidding for the maintenance building would provide eligible obligations to satisfy the rule. Multiple trustees emphasized prudence, noting that the board previously authorized parameter authority up to $100 million (adopted in March 2025) but does not intend to spend the full authorization without project-by-project approvals.

Alongside the presentation, the board approved several related actions in the consent agenda. Members voted to transfer $1,000,000 from the general fund into the capital reserve fund and authorized the district to seek bids to modernize the high school public address system. The board also approved acceptance of audited financial statements and ratified a multiyear plan that will guide specification development for upcoming 2026 projects.

Raymond James recommended beginning with an initial tranche while market conditions remain favorable and proceeding through standard credit-rating and legal-document processes in the early months of the year, followed by a bond sale and a May closing. Administration and the finance team will return to the board with more refined proposals after bids and further project scoping.

The board did not take any final borrowing action tonight; members and staff framed the presentation as informational and a planning step that will require discrete approvals before any bonds are sold.