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Waynesboro Area School Board to refinance debt

expects less savings

August 18, 2013|By JENNIFER FITCH | waynesboro@herald-mail.com

WAYNESBORO, Pa. — The Waynesboro Area School Board will be refinancing debt, but it expects the savings realized from the effort will be less than in the past.

The district will refinance $8.6 million in principal in the coming months. The debt represents one of four bond issues done to obtain money for the $46 million expansion and renovation of Waynesboro Area Senior High School.

The school board already refinanced the other three bond issues, experiencing significant savings due to lower interest rates in recent years. For instance, the district realized about $1 million in savings from its effort in September 2012.

However, increased interest rates, which are partly related to the Federal Reserve’s quantitative easing, mean the savings will be tempered in this case, according to Gregg McLanahan from Public Financial Management, the district’s financial adviser.

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“This big spike is off an incredible low,” McLanahan said.

Public Financial Management sought and received permission from the school board to reissue the bonds on a day when the market seems most favorable. That is expected to be done prior to Nov. 15.

McLanahan said there will be costs for things like underwriters’ fees and bond insurers.

On Tuesday, the board authorized Public Financial Management to make the move at its discretion, as long as the potential savings are greater than $250,000.

The process mirrors the one done last year, school board President Chris Lind said.

“We’re not going to save as much money as before, but we’re still going to save a sizable amount for taxpayers one time,” he said.

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