Municipal advisor outlines three financing scenarios and refinancing plan for Chambersburg Area SD school projects

John Fry, the district's municipal advisor, told the Chambersburg Area School District board on Feb. 24 that the district can finance three major projects under multiple scenarios and is likely to be able to refinance existing short‑term bonds to reduce overall interest costs.

Fry walked the board through three options. Option 1 would finance all three projects — an intermediate school (~$139 million), Green Village (~$37 million) and Camp South (~$117 million) — producing about $277 million in net proceeds under the presentation’s assumptions. Option 2 removes the Green Village project and reduces borrowing to roughly $242 million. Option 3 also omits Green Village but applies about $25.3 million of district cash to lower the borrowing requirement and shorten the number of years the board would need to step up annual debt‑service budgeting.

“The municipal bond market has been nice and stable over the last several months,” Fry said, noting that many of the district’s shorter‑term outstanding bonds have coupons at around 4 percent or less and could be candidates for refinancing as rates trend lower. “It remains an attractive time to borrow,” he added.

Fry showed the board a 25‑year, level‑payment debt‑service construct and warned that, under the largest scenario, annual debt service to bondholders could reach about $31.1 million in peak years, compared with current debt service near $11.6–$12.0 million. He emphasized the plan includes a routine refinancing component when the district issues its ‘new money’ borrowings to capture savings on eligible older issues.

Board members pressed Fry and district staff on how the presentation’s millage and percentage‑increase columns were calculated and where prior numbers — such as an April 2025 5.5‑mill estimate — originated. Administrators explained the district budgeted an increased debt‑service amount this year (notably a one‑time transfer discussed in the meeting) and that the presentation backs into millage equivalents from those budgeted dollars.

Finance staff and the board repeatedly referenced state 'adequacy' funding as a critical offset in the financing plan. Administration said the current fiscal‑year budget includes roughly $5 million of adequacy funding and that the presentation assumes ongoing adequacy receipts would materially reduce or avoid millage increases for debt service. Fry and staff cautioned that PlanCon (state debt‑service reimbursement) is not assumed — “PlanCon was reimbursement on debt service,” Fry said — because the program is effectively moribund for new projects.

Board discussion also addressed the district’s statutory or practical additional bond capacity (discussed in the meeting around $275 million of additional principal capacity based on current budget figures), the potential benefits of directing district cash toward later phases of projects to improve credit‑rating flexibility, and the need to test several forecasting scenarios (including a “worst‑case” projection) in the coming weeks.

The board did not make any commitment to proceed at the meeting; members asked staff to return with refined draw schedules, explicit assumptions for the three‑year budget, and alternatives that show the operational impact of different capital‑reserve or millage choices. The presentation was presented as step one of three in the board’s capital‑financing review process; board members said they expect to revisit the numbers and assumptions at the next meetings.