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School board mulls borrowing up to $50 million

August 11, 2004|by RICHARD F. BELISLE

waynesboro@herald-mail.com

WAYNESBORO, Pa. - It was said to be more of a home-equity line of credit than an outright loan, but members of the Waynesboro Area School Board on Tuesday considered borrowing as much as $50 million for renovations needed at three district school buildings.

While the projects have been under architectural study for more than three years, a new state law, Act 72 of 2004, is adding pressure on school districts to authorize borrowing for major construction projects before Sept. 2.

The crux of the new law is to use proceeds from slot machines to lower property taxes for homeowners across the state. It also changes the way school districts budget and borrow money for construction projects, according to Superintendent of Schools Barry Dallara.

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In Waynesboro, the school board has to pass a resolution authorizing a specific amount to renovate the high school, middle school and Summitview Elementary School by Sept. 2 in order to be grandfathered in under pre-Act 72 rules, said Gregg McLanahan, the board's financial adviser.

If it acts after Sept. 3, but before July 1, 2005, the school board would have to meet tougher restrictions under the new law. If it acts after July 1, 2005, school construction bond issues would be subject to voter referendums, McLanahan said.

After hearing details about the new law from Dallara, McLanahan and an architect, most board members Tuesday appeared ready to pass a resolution authorizing their financial advisors to incur the debt.

The resolution would mean that the board is reserving its options, Dallara said.

Architect Mark Barnhardt of EI Associates, the firm studying local school building needs, had updated reports showing that $30 million is needed to modernize the high school building, $8.4 million is needed for the middle school renovations and about $5 million is needed to upgrade Summitview Elementary School.

The board has borrowing capacity of up to $60 million, officials said.

Board Member K. Marilyn Smith recommend that $40 million be authorized to cover the high school renovations and provide money for the other two projects.

"What difference does it make," she said. The board doesn't have to use all of the money if it's not needed, she said.

Member Anna Bostwick-Foley argued for $50 million, saying all three projects should be funded.

Member Todd Rock asked his board colleagues to "slow down" and take more time to consider the action. Voting so fast on such a high amount is "irresponsible. Once a line of credit is established it will be spent," he said.

The board members agreed to come up with a figure at the board's meeting next Tuesday and vote on a resolution at a special meeting scheduled for Aug. 24.

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