Taking on additional debt to get cash flow assistance in the next few years is again on the table in Lehighton Area School District.

Zach Williard of Public Financial Management presented a debt restructuring option to Lehighton’s finance committee Monday night. It would lower the district’s debt service payments in 2021-22 and 2022-23, generating an estimated savings of $1.88 million and $1.24 million respectively. Lehighton would generate that savings, however, by extending payoff dates out longer and adding around $2 million in debt over the life of the bonds, which fall off in 2045.

“I understand it’s a double-edged sword because we are pushing the debt out further,” director Rita Spinelli said. “It is, however, very important to get our bond rating back to where it needs to be for future savings opportunities, and this could help us do that.”

Williard said the restructuring is meant to be one piece of a multifaceted plan that gets the district back into a situation where it doesn’t have cash flow crunches or have to borrow money until local, state or federal funding rolls in.

“It helps get you back on good footing and helps build back your fund balance,” Williard said.

According to a budget presentation Monday night by LASD Business Administrator Edward Rarick, Lehighton ended 2019-20 with just under $1 million in its fund balance. That is down, however, from 2012-13, when the district ended the year with $13.86 million in the fund balance.

Not everyone was on board with the restructuring plan, which has yet to go before the full board.

“Can’t we just spend less than we take in for a few years to get cash flow relief?” Director David Bradley asked during the finance meeting. “Adding $2 million in debt to a district that already borrowed too much is irresponsible. It’s kicking the can down the road.”

The 2014 TD Bank Note and 2015 Series A Bond are up for restructuring consideration. The 2014 note, however, is slated to be paid off in five years.

“I realize we have a cash flow issue, but it doesn’t seem to make any sense to extend that small amount of debt left on that one,” resident Barbara Bowes said.

This is the second year in a row Lehighton has considered restructuring the debt. Williard made a presentation to the district in 2020, but the idea never gained traction.

“We are restarting the process,” he said, “because we were not comfortable everyone was committed to this last year, so we let the opportunity expire. There is a lot of work behind the scenes to get to a place where you can actually do something with regards to the restructuring.”

With the full board yet to discuss the idea, Williard said the district would likely need to lock an interest rate in by July or August to be able see savings in the 2021-22 school year.