Bond ‘Refunding’ To Save WSSD At Least $700,000

 By Katie Crawford

In a meeting whose special focus area was school financing, the Wallingford-Swarthmore School Board unanimously approved the “advance refunding” opportunity put forth by Kenneth Phillips of RBC Capital Markets, LLC. This will allow the district to refinance up to $35,495,000 in bonds under more favorable terms. The bonds will be reissued in increments of just under ten million dollars, a “golden number” that deems the amount “bank qualified” allowing for the additional option of refinancing at a private bank as opposed to only looking at the bond market. This will produce an initial savings of $700,000 for the district, with the potential for more savings as more “chunks” are refinanced. The board chose to take these initial savings up front. The district will receive the money in installments over the next four years, providing a degree of budget relief.

The board also approved the redeeming of a 2006 bond issue which the district is currently paying about $12,000 a year in interest. Paying off this debt will result in approximately $80,000 in savings over time. The funds to pay off this debt are coming from the district’s cash reserves. According to Dr. Richard Sonntag, board president, the decision to refinance these bonds at this time was not made due to strains on the current budget, but rather just made good financial sense given the state of the bond market and the common understanding that the Federal Reserve will most likely raise interest rates in the near future.

‘Clouds Hover’

Despite such positive news, Dr. Pladus noted “one cloud that continues to hover.” There is still no budget from Harrisburg, forcing some districts to borrow in order to get through to the end of the year and some districts to contemplate shutting down. Given our healthy fund balance, Dr. Pladus expressed confidence that WSSD will have sufficient funds on hand to complete the year without having to borrow.

The lack of state budget and the unpredictability of imposed Public School Employees’ Retirement System (PSERS) costs continues to produce ramifications on many levels. Board member Paul Schregel noted the 6.9% increase in Delaware County Area Technical School’s budget. While Schregel supported the board’s approval of this budget resolution, he found the increase shocking and indicative of the tech school facing the same challenge of funding PSERS while also dealing with state budget uncertainty.

In addition, the increase in funding for the Delaware County Intermediate Unit was noted by board member Dr. Robert Reiger, questioning what we pay per capita for DCIU’s services compared to other districts. (These numbers were not immediately available.) Dr. Sonntag noted that DCIU exists in a competitive market, and that the district was not under obligation to use their services.

Among WSSD’s Future Stars

Interim Superintendent Michael Pladus, having recently seen Rent at SHHS, Tarzan at SHMS, and having also attended NPE’s Got Talent, contemplated his potential future as a Hollywood agent, given the abundance of talent in our district. Dr. Pladus also announced that Strath Haven High School is only one of 13 public or private schools to be invited to complete the 18-page application for recognition as a Blue Ribbon school. He commended six SHHS students who will travel to the National Speech and Debate Association Championship in Salt Lake City in June. Nine students also qualified for the National Championship Debate tournament sponsored by the National Catholic Forensic League that will be held in Sacramento. The speech and debate advisor for the high school is Jeff Kahn. Dr. Pladus attended the recent Arts4Smarts event, which once again proved to be a great night and a very successful fundraiser.

When to Hire a New Teacher

Dr. Allison Karpyn, having attended a recent WES PTO meeting regarding class size, questioned when the district makes the decision to hire another teacher. Director of Human Resources, Ferguson Abbott, responded that the decision at the kindergarten level is made earlier than for other grades, based on registration numbers and the need to work out morning and afternoon classes. In terms of the other grades, the decision is made later in the summer when the district has a stronger sense of “real” numbers, since there is often lots of movement during the summer not reflected in the initial registration.

Boy Scout Closes Meeting

Earl Kufer of Boy Scout Troop 277 of Wallingford, as part of fulfilling the citizenship and communication requirements of the merit badge, began the board meeting by leading the board in the Pledge of Allegiance and later closing the meeting with two quick raps of the gavel.

Leave a Reply