Pennsbury School Board approves short-term BANs, amends bond parameters to bridge high school financing

The Pennsbury School Board on July 9 approved two resolutions authorizing short-term bond anticipation notes (BANs) and an amendment to previously adopted bond parameters to bridge financing for a planned high school project.

Zach Willard, the district nd PFM dviser, told the board the BANs would serve as a temporary bridge "until we have a completed audit, which we can then provide to Moody's." The board voted by roll call with seven members present and none recorded opposing; the Chair announced the motions passed.

Why it matters: The district is moving ahead with short-term financing because an updated audit was not yet delivered to Moody's, delaying a credit opinion that would allow typical long-term market borrowing. Willard and presenters described two BAN options: a public BAN sold in the market or a private BAN purchased and held by a bank, to be outstanding for no more than about 12 months before being refinanced into long-term debt.

Numbers and projection details: Willard said new debt service tied specifically to the high school borrowings (column 18 in the board handout) is estimated as roughly $613 million in principal and interest over the project's 30-plus-year repayment horizon, while a $891 million figure shown elsewhere reflects existing district debt plus the new project. He also highlighted estimated new annual debt service of about $13.5 million and said the district may use tools such as capitalized interest or cash reserves to phase in mills; the handout shows about $9 million of capitalized interest or cash could be used to smooth earlier years.

Interest-rate context: Willard said long-term 30-year fixed rates for school bonds depend on credit but currently sit roughly in the mid‑4% range, while BAN rates are short‑term and likely higher; the materials set a maximum parameter for BAN interest at 7% as a ceiling in the resolution, though presenters said they do not expect rates anywhere near that maximum.

Public reaction: Two residents spoke during public comment. Anthony Shimp of Yardley Borough asked whether a far-right column in the board materials meant the project would cost "$882,000,000" as printed; Willard clarified that part of the handout aggregates existing district debt plus the new project. Andrew Dell of Falls Township said his current school tax bill was $10,900 and said he feared the project nd related borrowings—ould sharply increase local taxes; board members and staff replied that the board has intentionally phased borrowings to avoid one-time spikes and that the district will track contract payments monthly.

Board discussion and next steps: Trustees pressed presenters on draw schedules, contractor obligations and contingency plans if bids or material costs change. Willard and district staff said contractors are held to bid prices, the district will pursue change-order and bond remedies if necessary, and the project will be closely tracked with periodic updates. Board members also said they expect the audit to be completed and presented to financial partners by late August (with some staff noting timing could extend into the fall depending on auditor availability). Once the audit and a rating are available, the district intends to take the BANs out with a long-term bond issuance.

The vote and outcome: The board moved and seconded each item and approved (roll-call recorded yes votes from members present). The motions covered: (1) adopting the BAN resolutions to enable short-term bridge borrowings, and (2) amending the May 21 bond-parameters resolution to allow a BAN and subsequent long-term takeout. The board closed by reiterating oversight commitments and adjourning for the night.

What happens next: District staff and advisors said they will continue to refine the draw schedule, bring updated millage and rate analyses to future meetings, and present the completed audit to Moody's when available so the district can proceed to long-term financing.