The Octorara Area School Board is considering taking advantage of current low interest rates and federal stimulus funds to borrow between $8 and $10 million to finish its $38 million high school renovation project.
The issue will be discussed when the school board meets at 7:30 p.m. Monday, Oct. 18 in the middle school multipurpose room.
"The major areas remaining include the classroom wing, auditorium and gym," said Business Manager Dan Carsley, explaining that the additional borrowing is needed to cover asbestos removal as contractors renovate the old classroom wing.
The board originally borrowed $67 million in 2006 to cover recent intermediate school and high school renovations. Approximately $27 million has been paid to date and the district has refinanced twice to take advantage of falling interest rates.
Kent Phillips of RBC Capital Markets recently told the school board that it may be able to take advantage of Build America bonds or other federal programs. The high school should be done next summer.
According to Phillips, the school district's debt is $120,509,973, which it plans to finance through 2031. Some of that may be reimbursed by state and local funds.
With 1 mill of tax currently generating $866,000 in revenue, the district's budget is carrying 5.38 mills to cover borrowing in 2010, and will carry between 5.63 and 6.46 mills per year after that, until 2030, when the figure will be 4.58 mills.
The current projected millage for debt will be 4.58 in 2030, 0.64 mills in 2031 and zero thereafter.
Of those mills, either 0.25 or 0.21 of a mill per year (a total of 1.59 mills) go toward funding capital projects such as the intermediate and high school renovations. These will be paid for in 2014.
"The board took advantage of good markets over the last two years," Phillips said. "Interest rates remain very attractive and stimulus money is in the news."
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