State College

State College Area school board considers financing options for State High project

Big decisions with big money await the State College Area School District school board.

The board held a special meeting this week, in part to discuss financing plans for the $115 million State High project.

In May’s primary election, voters approved a referendum question that asked whether the district should borrow $85 million to finance the project’s construction. The final count of 11,121 to 3,975 gave the green light to proceed.

An additional $20 million will be funded by directing current district tax revenue to the project, and capital reserve funds will account for the remaining $10 million.

Randy Brown, the school district’s business administrator, said financial plans for the project have been discussed since last fall. He said 45 possible scenarios were on the table about a year ago with the school district’s former financial advisers at Financial Solutions.

Those talks have heated up as the school district’s projected scenarios narrow. The district’s new financial adviser, NW Financial, laid out eight possible financing scenarios Monday.

Brown said it is important to note that these are not the plans the school board will choose from, because factors — such as marketplace demand for bonds and interest rates — will shape how the school board decides to finance the project in different phases.

NW Financial Senior Vice President Tom Beckett said it is a good time for a school district to finance a project of this scale.

“Interest rates are at very low levels, which makes it an opportune time to finance this project,” Beckett said.

The board’s first set financing decisions likely will be made between January and March to determine how to finance construction in the first year.

The possible scenarios presented by NW Financial show financing plans of 20 to 30 years with total debt of up to about $180 million.

Brown, however, said it’s likely that the board would refinance the debt with lower interest rates. He also said all of the school district’s current debt has been refinanced.

NW Financial representatives will continue to discuss financing possibilities at future board meetings.