An upcoming bond refinancing could save Lehighton Area School District about $1 million over the course of the next 20 years.

Lehighton would be refinancing its Series A of 2015 Bonds, which have around $30 million outstanding and a current 5% average interest rate.

“This is a multi-year process we have been monitoring for the district and with the November 2023 call date upcoming, if long term borrowing rates stay low, it may be time to strike,” Zach Willard of Public Financial Management said during an LASD board workshop Tuesday. “If we did this today, it would be right around $1 million of savings and it does not extend the length of the debt.”

The board is set to vote in two weeks on several motions that will move the refinancing forward. Willard said the earliest possible interest-rate lock would be mid-July, with a settlement in mid-August.

“The financing team will only proceed if it produces at least $592,000 worth of savings for the district,” he said.

Lehighton is able to consider the refinancing because Moody’s reevaluated its credit rating and removed the negative outlook, Business Manager Ed Rarick said.

The district concluded fiscal year 2021 with $3.8 million operating surplus that brought its available fund balance to a four-year high of $4.7 million. The surplus was driven by increased state PlanCon reimbursements from prior building projects and an influx of federal funding related to the COVID-19 pandemic. Lehighton is expected to receive $6.9 million in COVID-19 aid through 2024.

“While the district’s current Baa1 Moody’s rating is below the state average, you can still get good long term interest rates,” Willard said.

PFM has also been monitoring Lehighton’s Series 2015 Bonds, which have almost $5 million remaining, an average 3.27% interest rate and a maturity date of Nov. 15, 2040.

“Given the current interest rate market, the 2015 refinancing does not produce positive savings, but PFM will continue to monitor the opportunity and update the board and district administration,” Willard said.