Lewisburg Area School District borrows for $35.7 million for new high school

Feb. 28--LEWISBURG -- With a stroke of a pen, Lewisburg Area School District directors Thursday night signed a bond resolution to borrow $35.7 million for a new campus in Kelly Township.

Board members approved the move by an 8-1 vote, and construction of a 182,481-square-foot high school on the Newman Farm property is expected to begin in September.

A surging financial market enabled the district to borrow less money, said Brad Remig, managing director of PFM Group of Harrisburg, financial manager for the district on the project. The new interest rate of 3.8 percent -- making for a $35,750,000 project -- allows Lewisburg to save $290,000, he said.

With the resolution passed, the district is locked into the 3.8 percent rate over the 25-year term of the bonds. This also lowered the annual debt payment to $2.6 million per year from an expected $2.7 million.

"We did extraordinarily well in the market (Wednesday)," Remig told the school board. A drop in interest rates since Jan. 1 made "the timing quite nice for pricing bonds."

Moody's also confirmed a Double-A credit rating for the school district, so Lewisburg won't need bond insurance, saving as much as $60,000, Remig said. Refinancing the 2005 bond also saved about $270,000, he said.

Director Mary Howe was the dissenting vote on both the bond resolution and approving the Act 34 handbook and resolution. Howe asked about a pre-payment penalty on the bonds.

Remig answered that Lewisburg will have an eight-year call; essentially the bonds will exist at least eight years and payments will be on principal and interest.

With the approval and subsequent signatures, all funds become available to the district by March 31, Remig said. PFM Group is an independent financial consultant the school board approved hiring in December to manage finances throughout the project's duration. PFM will be paid $19,500, which Remig said in December is a one-time fee paid out of loan proceeds.

PFM was particularly careful with getting the best rates and offers, Remig said, because of the intensity surrounding the high school project. While recent school board meetings have been packed and marked with tension, including a police presence at some, Thursday's meeting was peaceful.

Lewisburg resident Stacy Richards addressed the board and opposed the project, saying she thought there was a rush to make decisions on construction while the board didn't appear to have complete information, including a complete traffic study.

The board also voted 8-1 to approve the Act 34 handbook, which outlines the finances and high school project time line from beginning to end.

With the approval, Crabtree, Rohrbaugh & Associates architects will send the booklet to the Pennsylvania Department of Education, project manager Chris Barnett said, anticipating the agency's approval by March 14.

Once approved, the school district will advertise the Act 34 public hearing, planned for April 10, and make a copy of the booklet available at administration offices during normal business hours.

Site plans and floor plans have been updated, and a traffic study will finish by March 31, Barnett said. A new HVAC system also was approved.

Also at the meeting:

The board approved ending a lease with Union County for the Simon House at North Second Street in Lewisburg. The school district had leased it for $1 per year for special-needs students' programs. However, Superintendent Mark DiRocco said the district hasn't used the building in some time, and the especially harsh winter has proven maintaining it too hard to keep. The lease on Simon House expires Dec. 31.

The board will review its budget contribution to SUN Area Technical Institute in New Berlin. The school's budget for next year is projected at $6.2 million, Director Mary Brouse said.

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