The Pottsville Area school board on Wednesday approved a resolution to refinance a $5 million bond, a debt it incurred in 2008 for roof repair, according to district Business Manager David J. Delenick.
"In 2008, it was originally $5 million. Now it might be around $4.3 million. It was a 20-year bond issue. So we're hoping to get lower interest rates so we can save money while paying it back," Delenick said.
The district is managing its bonds with the help of Rhoads & Sinon LLP, Harrisburg. The district's bond counsel, Jens H. Damgaard, Harrisburg, an attorney with the firm, spoke about the issue during the meeting.
Damgaard said the district could save up to $250,000 by refinancing the bonds.
"The rates were great in 2008. But, largely with the problems that have been going on with the economy, rates have even come down further. We've been breaking records over the last several months," Damgaard said.
The district was expecting to refinance the bond in 2013, five years after the bonds were issued. But Damgaard recommended the district move now.
"Rates have been bouncing around a little bit. But the target I've been told by your underwriter is about $250,000 in total debt service savings is achievable," Damgaard said.
The plan is to take money from the new bond issue and use it to buy U.S. Treasury securities, lending money to the federal government for a specified period of time, Damgaard said.
District solicitor Richard A. Thornburg recommended the district approve the resolution. RBC Capital Markets. Scranton, a broker, is the underwriter of the bond. The district makes payments on the bond twice a year to First National Bank of Minersville, Damgaard said.
In other financial matters, the school board formally approved H.A. Berkheimer Inc., Northampton County, as the earned income tax collector for the district.
On July 10, the Schuylkill County Tax Collection Committee, which represents the district along with the other school districts and municipalities in the county, unanimously voted to hire Berkheimer as the EIT collector for the county for a term to end Dec. 31, 2013.
In recent months, the committee became frustrated with its previous EIT collector, Centax Group, Allegheny County, since Centax was failing to process tax bills in a timely manner.
The school board also voted Wednesday to hire Berkheimer to collect its local services tax.
While the Schuylkill County TCC worked out the contract for EIT collection for municipalities and school districts, those entities approved their own contracts with tax collectors for the local services tax.
Pottsville Area had hired Centax to collect its LST, but in a unanimous vote Wednesday night the board decided to get out of that agreement and go with Berkheimer.
Delenick said the district, like other school districts and municipalities that had hired Centax to collect the LST, is working with the Schuylkill County TCC to close out their local service tax contracts with Centax.
In other matters Wednesday, the board took the following actions:
- Approved the following fall sports budgets for the 2012-13 school year: Football, $58,650; boys' soccer, $6,779; girls' soccer, $10,373; girls' volleyball, $11,170; water polo, $7,869.; cross country, $2,507.; golf, $6,089.; girls' tennis, $2,525, and medical budget, $9,506.
- Agreed to advertise bids for athletic equipment for the 2012-13 school year.