CLEARFIELD – During preliminary analysis Monday night, the Clearfield Area School District Board of Directors learned of financing options for its $1.965 million allocation from the Pennsylvania Department of Education (PDE) through the Qualified School Construction Bond program.
Jamie L. Doyle, senior managing consultant with Public Financial Management, Inc., of Harrisburg, indicated the district would use the allocated funding toward its high school re-roofing project. She said the re-roofing project is to be completed over the summer.
As a result, Doyle explained the district would initially pay for the project(s) from the general fund/capital reserve. She said the district would then reimburse the same once the financing is completed.
According to her, the State Public School Building Authority will be the conduit issuer. She said the district must spend 100 percent of the proceeds within a three-year period.
She said interim financings that are incurred after Feb. 21, 2010 can be reimbursed. She said bond proceeds will be held by a trustee-requisition process. She also said maximum maturity is set by the treasury for 14 – 17 years.
Doyle said the QSCB program offers bullet maturity with annual invested sinking fund deposits. However, she said sinking fund deposits can’t be made more quickly than equal annual deposits.
She said the board must determine if they want to proceed with a wrap-around or level authorization structure. She said they must do so within the next two to three weeks if they’re aiming for the first tranche of QSCB sale.
“And, I’d highly encourage it,” Doyle said. Between the two structures, she said the district had three options. She presented two, different “wrap” options as well as a level structure.
Under the first option, she said the district’s financing type would be tax-exempt bonds in a wrap structure for a five-year term. She said it would be the equivalent of 0.52 mills. She also noted that sinking fund earnings wouldn’t be applicable.
She said the district had a second option under the wrap-around structure. She said its financing type would be the QSCBs for a 17-year term.
If the board chose this option, she said it would have a millage equivalent of 0.17 percent. In addition, she said it came with $538,594 in sinking fund earnings.
Doyle also pitched a level structure with a financing type through the QSCBs. Like the previous option, she said it had a 17-year term. But she said it had a millage equivalent of 0.86 percent. She said it offered $493,739 in sinking fund earnings.
Doyle indicated she assumed the value of 1 mill equaled $118,000. She said preliminary application packets will be available June 25. She said a date is to be determined for the QSCBs sale for the first tranche.
Doyle said she anticipates that the first tranche of QSCBs will be settled in September or October of this year.
The district has applied for the QSCBs, a new tax credit bond program, which provides a virtual interest-free financing to school districts under the American Recovery and Reinvestment Act of 2009.