The ball is continuing to move forward on possible debt refinancing and restructuring in Lehighton Area School District.

During a meeting Monday night, Lehighton’s finance committee recommended the board take action Aug. 24 on two parameters resolutions that would set the guidelines for those actions.

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, according to a presentation by Public Financial Management in June, in that short-term period.

A refinancing of 2015 and 2015A series bonds, however, could add around $1.97 million in interest over the life of the bond payments.

Both of those estimates could change depending on market conditions, Lehighton’s credit ratings and any changes to federal tax law.

“I think these options only make sense if you do them together,” business administrator Patricia Denicola told the finance committee on Monday. “You can’t do the restructuring if you’re not in a good position to take advantage of the refinancing. This only works if the board is committed to staying on track to getting the district back up to operating where revenues meets expenditures, and starting to build back up its reserve to what the market requires.”

Lehighton currently has a depleted fund balance leading to multiple cuts, including student transportation, administrative positions and several extracurricular programs in the wake of COVID-19, to get to a balanced budget in 2020-21.

“The debt restructuring is meant to be one aspect of the district’s multiyear recovery plan that includes future tax increases and rebuilding of reserve levels,” said Denicola, who is leaving Lehighton next month to take the same position at another district.

The resolutions to be considered Aug. 24 by the board would not tie the district to any refinancing or restructuring. Denicola said it would merely allow PFM to go out to market when the bonds become callable and to see if there is an opportunity for lower interest rates.

While finance committee members Nathan Foeller and Rita Spinelli recommended advancing the resolutions to the full board, not everyone was backing the decision. “This proposal will only cost the district more money and we should not be borrowing more money to fix mismanagement errors,” Director David Bradley said. “I think there are other options here other than what PFM is providing. The district has an obligation to look at those options.”

Denicola said she’s changed a lot of Lehighton’s business office procedures since coming on board in March 2019, including more public bidding and public contracts, tighter spending control and giving more information to the board.

When she arrived for example, Lehighton had an open-ended account with an office supplies provider, which she stopped within a month.

“I didn’t think it gave us strong enough controls on spending,” Denicola said. “I’ve said no more times here when it comes to buying things than I have said to my children. You have to maintain strong spending controls with contract negotiations and things like that. It comes down to spending on needs, not nice to haves.”

Speaking during public comment, however, resident Barb Bowes said she doesn’t have confidence in the current board of directors to hold to the stringent spending procedures Denicola put in place.

“I just don’t think adding around $2 million to the budget over the long haul is a great idea,” Bowes said.