This supplements today’s Sanatoga Post story, “Pottsgrove Aggressive In Promoting, Defending HS Plans”
POTTSTOWN PA – The following is the verbatim text of an e-mail distributed Feb. 2 (2014; Sunday) by the Pottsgrove School District in response to a Jan. 29 article by Pottstown Mercury reporter Evan Brandt about proposed financing of Pottsgrove High School renovations:
“The Pottsgrove School District wants to respond to a news story in the Pottsgrove Mercury on Friday, January 29, that we feel doesn’t take into consideration the basic tenants of sound, long-term financial planning for the health of a large organization like a school district.
The School District is about to embark on a $30 – 35 million expansion and renovation of Pottsgrove High School, a project that has been under discussion for several years. The district considered two options to finance the cost of the project. One was a straight borrowing of $35 million that would be paid back over the 20-year life of the loan. Another was to take what’s known as ‘wrap around’ debt financing where existing debt is retired and replaced with new borrowings at lower rates. With this option, the district is able to borrow more money while keeping the principal and interest payments roughly the same as they are today and repay the debt in 15 years. It’s essentially like refinancing your home mortgage at a lower rate so that you have enough money to renovate your kitchen while keeping your payments the same. This is the option that the Pottsgrove School Board chose.
Currently we have approximately $6 million dollars in a capital reserve fund to cover improvements at our other four school buildings. The Pottstown Mercury stated that a less expensive option would be to use a half million dollars of that reserve fund to reduce the loan amount for the high school. Short term, that would mean we’d borrow less money, but we’d leave the district at great risk for having insufficient funds to cover future repairs should a furnace, roof, driveways, etc. need to be replaced or fixed. If the district has to borrow money for those kinds of expenses at a later date, it would likely require an increase in property taxes – something the district and board would like to avoid whenever possible. Interest rates are currently near an historic low, and any smart financial planner would recommend borrowing funds at the lowest possible rate.
Pottsgrove has an AA bond rating because of its financial prudence. That bond rating allows us to get lower rates. One of the things that bond rating agencies evaluate is the amount of money set aside for emergency repairs.
The borrowing plan that Pottsgrove chose adds very little impact on the district’s tax rate. It’s a financially sound decision that protects the fiscal health of the district, and maintains a safe learning environment for our students.
If you have any questions about the district’s financial decisions, please don’t hesitate to contact Business Manager David Nester 610-327-2277 at firstname.lastname@example.org or Superintendent Shellie Feola at 610-327-2277 ext 1011. Additionally, you can contact the school board at email@example.com.”
Related (to Pottsgrove High reconstruction):
- Pottsgrove ‘Response’ To Press Makes Financing Case
- Zoning Testimony Prompts Later School Board Start
- Board Places A Bet On Winning Grant For High School
- Pottsgrove High Renovations Face Zoning Hearing
- Asbestos Testing, Removal Planned For Pottsgrove High
- ‘Grove Wants To, But Can’t, Block School Lane Access
- Architects: High School Project Needs Zoning Variances
- ‘Grove High Renovation Not Yet Ready For Plan Review
- Pottsgrove To Explore Lighting Its Proposed Turf Field
- Pottsgrove High Reconstruction Might Keep Feet Drier
- Planners Get First Look At Pottsgrove Reconstruction
- Initial Planning OK’d For Pottsgrove High School Work
- Contractor Bids Sought For Pottsgrove Sewer Repairs
- Roofing Replacements At Pottsgrove High Aren’t Far Off
- Pottsgrove Preferences: STEM, Security, And Engineering
- Post Poll: What’s Important To YOU At Pottsgrove High?
- Behind ‘Grove Gym Support: All In A Place, A Place For All
- Blast From ‘Grove’s Past: Look What $1.2 Million Bought
- A Field Here, A Gym There. Voilà! $34.5 Million In Costs
- Monday’s Crowd Supported Pottsgrove Renovation Plan
- ‘Grove’s Smallest Renovation: What To Do With ‘Patio?’
- Pottsgrove Not Alone In Looking At STEM; College Is Too
- Monday Forum Seeks Input On Pottsgrove High Plans
- First Looks Offered For Renovations At Pottsgrove High
- Pottsgrove Now Plans 2 Meetings On High School Project
- Tick-Tock! Contractors Met Timetable At Pottsgrove HS
- Pottsgrove High Classes Unaffected By Smoking Heater
- Search Starts For Feasibility Study Vendor At Pottsgrove
- Upgrades Could Enhance STEM Education At Pottsgrove
- Pottsgrove Seeks Study On High School Project Wish List
- Board OKs Air Repairs As Start Of Fixes At High School
- Pottsgrove Hires Mechanicsburg Architect For HS Review
- Directors OK Engineering Study For High School Systems
- With Ringing Project Done, Pottsgrove Eyes HS Repairs
- Committee: Pottsgrove High Needs Work, Not Renovation
- Response Mixed To Pottsgrove Improvements
Photo from The Mercury