Lehighton Area School District’s finance committee heard an option for short-term budget relief Monday resulting from debt restructuring.

Lehighton’s net debt service payments are estimated to be about $2.92 million in each of the next two years, but with a restructuring, the district could see a net budgetary savings of around $1.3 million per year.

The district is currently facing a nearly $2 million budget deficit for 2020-21 and, to help offset it, is discussing cutting nonmandated bus service, middle school athletics and some extracurricular programs.

“Looking at the interest rates right now, it could be advantageous to get geared up so we’re in a position to react quickly in the future,” Zach Williard of Public Financial Management told the committee. “It could give you some short-term budget relief in the next few years.”

It would, however, add to debt service payments down the road and end up costing the district an extra $1.97 million over the life of the payments if it did not do any further refinancing.

An opportunity is there for 2015 bonds to be refinanced in a few years, which would result in some type of interest savings.

Rates were hitting all-time lows six months ago, but in March, the municipal rate went sky high and the markets were out of sync. Williard said things are now getting closer to the norm.

“It is kicking the can down the road, but it can get you some immediate relief,” Williard said. “This is a shot in the arm and gives you some budget cash relief. A lot of districts have used this technique for that purpose.”

Williard encouraged the district, if it is interested in debt restructuring, to approve a parameters resolution at a future board meeting, which would allow PFM to strike while the iron is hot in the district’s behalf.

“We can move in a moment’s notice,” he said, “by having a resolution in place that gives parameters because the markets move at a rapid pace.”