With interest rates at record lows, officials are considering taking out a $5 million loan to use for building and ground projects around the district over the next three years.
“It’s a great time to borrow if you need the money,” said district bond counsel Robert Aumer, of Janney Montgomery Scott LLC.
At Monday’s school board meeting, Aumer presented officials with preliminary information for taking out the 12-year bond issue for $5 million. Interest rates are currently between just below 1 percent to 2.5 percent, he said.
The money would be used repair or replace a number of elderly district structures, including the roof at the and boilers at three of the elementary schools.
Officials emphasized the loan would be used for preventative maintenance—and not to expand or add on to any school buildings.
“This is very necessary repair and replacement and maintenance,” said school board member Jim Nickel.
Linda Andreassi, district director of communications, said the projects would be parceled out in three tentative phases that would take place during the summer months over the next several years.
The Project Costs
The first phase would cost about $2.2 million and consist of replacing the 18-year-old roof at the senior high school as well as the early 1990s-era cooling systems at the senior and intermediate high schools. Robert Cook, Seneca Valley’s director of buildings, grounds and security, noted the 10-year warranty on the senior high school’s roof expired in 2004.
“In my opinion, our buildings are beautiful. They’re fantastic buildings,” he said. “But unfortunately, they do have components that are getting very old on them and we have to replace them.”
At a cost of about $1.1 million, the second phase would include replacing the rooftops at Connoquenessing Valley,, and schools and at, Andreassi said.
Costing about $2.7 million, the third phase of the project would replace the boilers at Connoquenessing, Evans City and Rowan elementary schools. It also includes electric service upgrades at the senior and and at Connoquenessing Valley, plus lighting upgrades to the intermediate high school.
The total cost for the projects is about $6 million, or $1 million more than the district is considering borrowing. However, district business manager Lynn Burtner said Seneca Valley has about $1 million left from bond money it received in 2010 for capital improvement projects.
Of the $4 million borrowed in 2010, Burtner has said $3 million was used to pay for the district’s share of the Butler County Vocation Technical School’s $11 million renovation project.
The remaining million originally was earmarked for a new press box at NexTier Stadium.
Those plans were Burtner said what’s left of the bond money may only be used for capital improvements. It cannot be used to augment the district's operating budget.
The same goes for the $5 million the district is considering borrowing for the buildings and grounds projects. Superintendent Dr. Tracy Vitale said school districts are not permitted to use the money for staff salaries or benefits, which make up the majority of the Seneca Valley’s budgeting expenditures.
Under repayment terms for the loan, Burtner said Seneca Valley would pay about $130,000 per year for the next 10 years. The remaining principal of the loan would be due in the last two years of the bond issue, she said.
Aumer added there is potential to refinance a bond issue from 2003 later in the 2012-13 school year that could save the district about $300,000 in the next five years. The money saved could be used to repay the $5 million loan, he said.
The board will decide on whether approve to Janney Montgomery Scott LLC to proceed with the financing the bond at its next meeting at 8 p.m. Monday, Sept. 17.
New Band Uniforms, School Marquee a Possibility
There also was talk Monday of using the financing to help buy new uniforms for the marching band. The band’s current uniforms are 12 years old and often need mending, Vitale said.
“We have people trying to patch them together at the beginning of the year, and as the enrollment keeps increasing with our marching bands, those uniforms aren’t going to last you more than a year or two out if you’re lucky,” she said. “We’re struggling at this point.”
Vitale said new uniforms would cost about $118,000. She said the district has spoken to the marching band's boosters organization as well as the band’s foundation about fundraising to help defray the costs of the uniforms.
The board also discussed the possibility of adding an electronic marquee sign outside the school, possibly along Interstate 79 or Route 68, that would promote school accolades and events—as well as mark the entrance to the school’s secondary campus in Jackson Township.
“That is a communications, public relations, marketing piece that you need to consider,” Vitale said. “I can’t tell you how many times people have called and said, ‘I don’t know where the campus is.’”
While Nickel already has said he sees a marquee as a “nice to have” instead of a “need to have,” school board member Jeanette Lahm was in favor of the electronic board as a marketing tool.
School board Vice-President Eric Gordon questioned if the sign could be used to generate revenue for the district through advertising on the board. Vitale also said she also would solicit donations for a marquee.
The board is expected to discuss the possibility of the marquee and band uniforms being rolled into the financing in more detail at their next meeting.