Northern Lehigh School District has agreed to borrow an additional $10 million to help afford a $21.5 million renovation project to Slatington Elementary.

The school board unanimously agreed on Monday to approve the bond resolution as presented by bond council to authorize the issuance of general obligations debt services of 2011 in that amount.That action came after the board heard a presentation on the resolution from Les Bear, the district's financial consultant.Bear said that as per the resolution, the dates payments are due is March 1 and Sept. 1. The call date is Sept. 1, 2016, he said.The interest rate on the bond will be .95 percent in 2012, and 3.8-percent in the year 2022, rates Bear said the district should be proud of."The district's debt service is incredibly short compared to most other districts," Bear said. "You've saved just an absolute ton of money by doing it this way."Bear told the board the net impact the bond will have in the 2011-12 budget is 1.24 mills."That's lower than our estimate," he said. "We're very pleased to report that to the board."In addition, Bear said another half-mill will be needed in the 2012-13 budget to phase in the $2.78 million debt service levels.On a side note, Bear informed the board that there is a remaining capacity for debt service as part of a parameters resolution the district has had in place since 2004.Director Mathias Green asked how the interest rate on this bond compares to that of the previous $11 million bond the district agreed to borrow for the renovation project.Baer said the interest rates this time around are "slightly better, just a little bit lower."Director Gregory Williams thanked Bear, business Manager Jeremy Melber, and the district's administration for their diligence.Melber said the effect of the $10 million bond has already been factored into the 2011-12 budget as a result of a spikeLast month, the board agreed to authorize administration to proceed with advertising and document preparation for the $10 million bond to complete the financing of various capital projects.In July, the district broke ground on the $21.5 million project, which calls for a new, 110,000-square-foot building that will contain 24 classrooms, three computer labs, cafeteria space to seat 225 people, and an expanded gymnasium to seat 675 people.In December, Greg Derr, director of support services and transportation, told the board that the project was behind schedule because asbestos was discovered in the rear pod that was under construction.However, Derr said no students or staff were in that area, and noted that Sargent Enterprises of Jim Thorpe removed the asbestos from the building. He said testing was conducted, and that there was no abatement while anyone was in the area.Derr said at that time the district would incur additional expenses as a result of the asbestos.In November, the board agreed to wait until the 2011-12 school year to borrow for the second phase of the project.At that time, Melber recommended to the board that it should wait to borrow the $10 million bank qualified and use the district's fund balance.Melber said at that time the district still had to come up with $10.5 million to afford the project. The district has over $9 million in its fund balance; $2 million of which is set aside in long range maintenance, he said.In October, Melber presented two options for the board to consider: borrow $10.5 million this year, in which the district would have had to have the bond qualified by Dec. 31 and need an additional 1.29 mills to pay off the debt service, or bond $10 million and use $500,000 from the district's fund balance in the event the district would borrow $10 million or less, as it would be .93 mills next year and .07 mills the year after.In June, the board, on a 7-0 vote during a special meeting, awarded contracts for the project, pending review and approval of bonds and insurances by the district solicitor.Also at that time, the board entered into an agreement with H.T. Lyons Company, of Allentown, to perform the HVAC testing, adjusting and balancing services during the additions and renovations to the school. It will perform work on a time and expense basis for a not-to-exceed cost of $36,700, with a contingency amount of $13,500 in the event any duct cleanliness testing or any additional TAB/Commissioning work is requested during the construction phase.The board also at that time entered into an agreement with Advantage Engineers, of Lansdale, Montgomery County, to perform the construction testing services during the additions and renovations to the school. They will perform work on a time and expense basis for a not-to-exceed cost of $52,235, with a contingency amount of $2,364 in the event any further testing may be needed during the construction phase.However, Melber said at that time the district must come up with an additional $400,000 to afford the project.In May, the board approved a bond resolution to authorize the issuance of general obligations debt series of 2010 for $11 million to help afford the project. Also at that time, the board approved the submission of PlanCon F to the Pennsylvania Department of Education for the additions and alterations to Slatington Elementary.Last January, the board agreed to adopt the Act 34 resolution, which calls for a total project cost of $20,432,466. The board approved the resolution after it heard a presentation from Bear, who said the resolution was part of a parameters resolution the district has had in place since 2004. Bear said that as of Sept. 1, 2015, the board will have the opportunity to refund the issue.The bond will be taken out of the 2010-11 budget, whereby the district will use .95 mills of its tax base to this year's budget, .7 mills to next year's, and a one-third mill the following year. It is estimated the state will reimburse the district $5,095,000 for the project.The school will maintain its grade 3-6 configuration, and also add six classrooms to address space concerns. Also, the plan will reconfigure open concept classrooms into individual classrooms, and construct an addition to house the third grade. In addition, the gymnasium will remain in its current location; a movable partition will be added for program flexibility; the existing locker area will be modified to increase gym seating capacity; and secure community access will be provided.The plan will also allow for the elementary offices to be relocated to the first floor entrance; a new two-story complex to be built at the front of the building to house the district's administration offices; former modular offices to be removed; and direct public access to be provided to district administration offices without requiring access to the school.The district believes the plan will maintain the desired grade configuration; the location of the elementary offices to the front entrance will be improved; the removal of district administration offices from the school will improve security for both by avoiding the mixing of the public and students; and will combine the district administration offices into one facility to improve operating efficiencies.Based upon enrollment projections that predict steady enrollment to slightly declining enrollment over the next 10 years, the project isn't required to increase overall district capacity. The enrollment projections were evaluated through PDE data, as well as Pennsylvania Economy League data. Also, the consolidation of the district administration offices from temporary modular construction could allow PDE reimbursement in the amount of 25 to 33 percent on a yearly basis over the course of the next 15 years.Constructed in 1971, the school is the only one of four buildings in the district never to have undergone any renovation work.Construction is expected to last about 20 months.