Waynesboro Area School Board looks to save by redoing its debt

April 10, 2012|By JENNIFER FITCH |

WAYNESBORO, Pa. — The Waynesboro Area School Board wants to refinance existing debt to create a one-time savings of at least $170,000.

On Tuesday, the school board instructed its financial adviser, Public Financial Management Inc., to issue bonds that will refinance $8.5 million debt from 2007.

The board agreed to only accept the results of that bond sale if it results in at least $170,000 savings for the district. It hopes to obtain lower interest rates than the current rates, which range from 3.625 percent to 4.2 percent.

Gregg McLanahan from Public Financial Management Inc. told board members they can handle the debt in two ways — pay interest first, then principal, or “wrap around” to extend the term of the current debt.


The more traditional form of financing would release some tax dollars in 2015-16 when the old debt is paid off.

That drop-off could free up money needed for anticipated increased contributions to the state pension system, board member Billie Finn said.

McLanahan told her and other board members traditional financing could work well for them.

“The rates are so low right now that going out 20 years is not a bad idea,” he said.

Bond interest rates hit an all-time low in January 2012, then spiked, McLanahan said. Those rates are now decreasing, he said.

Business Administrator Robert Walker said the school district hopes to obtain interest rates around 2 percent for the debt that was incurred as Waynesboro Area Senior High School was being renovated and expanded.

The board is preparing to finance new debt to improve facilities and use less energy. It will issue bonds for that work in coming months.

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