Seneca Valley considers debt refinancing

March 6, 2012 5:19 am

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Record low interest rates have Seneca Valley school board members looking at refinancing nearly $5 million of the district's debt.

According to the district's bond counsel, Robert Aumer of Janney, Montgomery and Scott LC, Seneca Valley is projected to save about $300,000 in loan repayments over the next 10 years if school officials refinance bonds taken out in 2002, 2003 and 2004.

School Business Manager Lynn Burtner said yesterday that the bonds have interest rates varying from 3.4 to 5 percent. They could be refinanced at 2 percent or less, she said.

Ms. Burtner said refinancing those bonds should save the district about $30,000 each year in bond payments.

She added the district could save an additional $10,000 per year in its loan repayment if it pays for the $100,000 closing costs of the refinancing up front. Ms. Burtner said the district has about $1 million from a 2010 bond issue that has not been designated for any projects. They are permitted legally to use some of that money to refinance the older bonds, she said.

Ms. Burtner added that the district must designate a use for that 2010 bond issue before 2015 or the money will have to be paid back. It had been borrowed as part of a larger bond issue that included plans for a $900,000 press box at Nextier Stadium. School board members dropped plans for the press box a year ago after receiving negative feedback from the community.

Laure Cioffi, freelance writer:
First Published 2012-03-06 04:20:56

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