Neshaminy board hears plan to borrow up to $55 million to fund high school addition and refinance prior bonds

Neshaminy School District trustees on Monday heard a presentation from RBC Capital Markets outlining a proposal to finance about $50 million in capital projects and to restructure portions of the district's outstanding debt.

"We're looking at refinancing principal payments for the 2021Bs and the 2023Bs and spreading those principal payments over the next 10 years," Michael Lillis, managing director at RBC Capital Markets, told the board. Lillis said the proposed package contemplates issuing about $55 million in bonds overall — including soft costs — while financing approximately $50 million for new capital projects.

Under RBC's plan, the district would refinance roughly $4.88 million of principal payments now scheduled for fiscal year 2026–27 and spread those obligations over a longer schedule. The presentation projected a reduction in net debt service of about $4.7 million in fiscal 2027; Lillis said the district expects smaller increases in debt service in subsequent years as the capital projects are paid for.

Board members asked about the structure and timing of the transactions, including the district's ability to remain "bank qualified" (a designation that can lower borrowing costs) by keeping individual issues at or below $10 million to $15 million in a calendar year. "The idea is to spread the budget impact over several years rather than financing it all at once," Lillis said, adding that staggered bond issues are a common strategy for school districts.

Consultants outlined a near-term schedule: if the board directs staff to proceed, it would consider adopting a parameters debt resolution on June 23 that authorizes the financing team to select a specific sale date; RBC indicated a possible bond sale the week of July 13 with settlement in mid-August. Shrader Group will lead design work, with roughly one year of design followed by two years of construction for a 16-classroom addition intended to open for the 2029 school year.

District officials said savings from the restructuring would be used to replenish reserves before the capital-project debt service increases take effect in later years. RBC and members of the financing team also noted the presence of PFM on the advising team and that Brian Bradley and other firm representatives had participated in prior meetings.

The board did not vote on the financing plan Monday; the next procedural step is the June 23 consideration of the parameters resolution, which would authorize the financing plan to move into market timing and sale.

Provenance: Presentation begins with Michael Lillis (SEG 156) and the project timeline discussion continues through SEG 501.