Bond refunding helps budget
Parkland School District Business Manager John Vignone reported, at a recent school board meeting, a bond refunding conducted in mid-February worked out well for the district.
“It was twice as good as we thought,” Vignone said. “We were projecting $250,000 and got $500,000.”
He explained the bond was refunded from a higher to a lower rate of interest, with market conditions working in Parkland’s favor.
“This $500,000 reduces our debt service payment over three years and gives us more money for other things in the General Fund,” Vignone stated.
He reported the district also borrowed $30 million in new money.
The financial scene was advantageous for Parkland with this transaction as well.
“We’ll be paying $1.2 million less in principal and interest over 20 years,” the business manager said.
He stated Parkland borrowed $2 million to help pay debt interest in a procedure called capitalized interest.
“We’ll pay this off in two years,” Vignone said.
He noted debt service offers challenges at this time due to construction of Veterans Memorial Elementary School in Upper Macungie Township.
“With our debt service plan, we can be ahead of the challenge,” Vignone said. “The debt service management fund will provide flexibility so we can hire teachers, keep our programs in place, and do capital improvements.”