Palmerton district looks to save $300,000 on bonds
TERRY AHNER/TIMES NEWS Henry Sallusti of RBC Capital Markets discusses the potential refunding of a 2005 bond issue with Palmerton Area School Board members on Tuesday.
Palmerton Area School District could potentially save $300,000 through the refunding of several bond issues.
Henry Sallusti, managing director of RBC Capital Markets of Scranton, discussed with the school board on Tuesday the option to refund several bond issues.
Sallusti said the district has a 2005 bond out in the amount of $6 million that is scheduled to be paid off in 2016. He said the current interest rate is 2.8 to 3.5 percent on that bond.
That bond could be refunded in June, which could result in a $150,000 savings to the district in the 2010-11 school year, Sallusti said.
"October 1, 2010, is the call date, and the earliest it can close is 90 days prior to that, or July 1," he said. "Then, go 30 days back from there to June 1, which is the sale date, and hope that between now and June 1, the rates stay the same or get better."
Sallusti said the district also has a 2006 bond in the amount of $5.4 million that is scheduled to be paid off in 2026; and a 2007 bond in the amount of $1,545,000 scheduled to be paid off in 2018.
"You're eligible for the refunding of three outstanding bond issues," Sallusti said. "If the rates were to stay the same, you could pick up about $300,000 over the three issues."
No action was taken by the board on the matter.
Superintendent Carol Boyce in January suggested the board many want to refinance the series of bonds to help afford future big ticket projects.
One of the more costly items Boyce said the district is faced with is the high school stadium roof, which has holes in it and is beyond repair. Repairs are needed to the bleachers as well, she said.
Boyce previously said the roof could cost $133,077, based on an earlier estimate from Tremco. In addition, the cost to restore the high school building roof could approach $500,000, she said.
The district would also like to pave its parking lots, Boyce said. The cost to pave the senior high school parking lot would be about $54,000, the junior high school, $20,000, Towamensing Elementary, $5,500, S.S. Palmer, $10,000, and the high school tennis courts, $25,000, she said.
Other projects Boyce previously said the district may want to consider are the replacement of the high school stage; the high school gymnasium floor; the pole building/bleachers; the junior high gymnasium bleachers; a crack in the wall at the junior high school; the exterior and interior doors at the high school; and an old pump.
Also on Tuesday, the board unanimously approved its portion of the 2010-11 Lehigh Carbon Community budget.
The total sponsor allocation of the $6,297,132 budget will increase by 2.9 percent. Of that, Palmerton's share of the capital debt service and lease budget will increase to $62,834, up 5.7 percent from the $59,459 figure in 2009-10.
However, the district's share of the operating budget is expected to be reduced to $143,227 in 2010-11, which represents a 2.9 percent decrease from the $147,577 figure in 2009-10.
In other budgetary matters, the board unanimously approved its portion of the 2010-11 Operations and Programs Services Budget of the Carbon Lehigh Intermediate Unit for the fiscal year July 1, 2010 to June 30, 2011.
The district will see a near 3-percent, or $551 increase in its portion of the over $80 million budget.
The district will pay $19,571 in 2010-11, up from the $19,020 figure in 2009-10.