Southmoreland School Board directors had differences of opinion at a recent meeting when they were asked to consider approving bond counsel to look into refinancing some of their bonds.
Director Ken Alt said he was not in favor of refinancing the district’s 2012 and 2013 bonds at this point because he couldn’t get answers from Solicitor David Petonic or Business Manager James Marnell on how much the district would look to refinance and what the savings would be.
“I don’t understand the hurry,” he said. “The rates can go down as much as they can go up.
“Also, in 60 short days, there will be several new board members, and I think when we’re talking about millions of dollars, I think it’s the new board that should be addressing this issue.,” Alt added.
With board members Charles Frye, Gail Rhodes and Heather Smith absent, a motion did not pass to hire Dinsmore & Shohl LLP Bond Counsel at a rate of $18,000 for a single bond issue or $14,000 per bond issue for more than one.
Alt and Director James Beistel voted against the motion giving just four votes — those of Jason Pawlikowski, Aimee Love, James Carson and William Porter — in favor of the motion.
There must be at least five votes in favor of a motion in order for the motion to pass.
Beistel also expressed his views that this was a decision that the new school board members, who will take their seats after the November election, should have the opportunity to discuss.
However, a motion did pass to invite PFM Financial Advisors LLC to a special meeting scheduled for 7 p.m. Oct. 24 to present their qualifications, responses, plans and information as to why they should be hired by the district to facilitate any decisions to move forward with bond refinancing.
Alt verified that having them address the board was for informational purposes only and would not cost the district anything unless they decide at a later time to hire them as financial advisors.
Currently, the board owes over $9 million on the 2012 bond and over $9 million on the 2013 bond.
In a proposal by PFM Financial Advisors LLC, Petonic said according to the interest rates in the market at the time they wrote up the proposal, the board could see an estimated gross savings of over $313,000 on the refinancing of the 2012 bond and an estimated gross savings of nearly $110,000 on the 2013 bond.
Porter questioned Petonic on whether or not those were the total savings after all of the overhead costs associated with the refinancing were deducted and Petonic said that was his understanding.
Currently the board is set to pay off the 2012 bond issue in 2027 and the 2013 bond issue in 2029.
Members are considering refinancing the bonds because there is an $88,000 increase per year in repayment of the bond issues beginning in 2022/23.
In other business, Marnell passed out a the final budget numbers for the end of the 2018-19 fiscal year. As of June 30 of this year, the projected ending fund balance was $3,332,659.
“This is a good sign that we’re not in fiscal distress and that we’re moving forward,” he said.
Also in other district business, the board approved the following winter sports coaches: Frank Muccino, Boys Head Basketball Coach at $6,779; Tim Muccino, Varsity Assistant/JV, Boys Basketball Coach at $4,137; David Barclay, 8th Grade Head Boys Basketball Coach, $3,154; Brian Pritts, Girls Head Varisty Basketball Coach, $6,779; Barry Collins, Girls 1st Assistant Basketball Coach, $4,137; Amber Cernuto, Girls 8th Grade Head Basketball Coach, $3,062; Dan Boring, Head High School Wrestling Coach, $6,215 and Terry Quashnock, Wrestling Assistant High School Coach, $3,361.