Hempfield Area School Board members are working closely with banking officials as they prepare to begin a million-dollar high school renovation project next year.
School directors met with PNC bankers this week to discuss current market conditions and the possibility of issuing another bond near the end of the project, which was first discussed in April when the board moved forward with a bond covering $110. million in additional money will be used to cover additional fees and costs of other projects.
“We always knew we were going to need some kind of additional funding to finish the project,” said Director of Schools Jerry Redbaugh. “Not only because it was $110 million for the school, but then we also had asset protection. So, we knew we had to take another small amount, not knowing what it was until the project was complete.
Given market conditions – the Federal Reserve has raised interest rates to combat rising consumer prices and inflation – board members wanted open communication about when would be the best time to issue another bond.
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“We just want to make sure we’re doing it at the right time,” Radebaugh said. “We wanted to have a proper conversation with them that we’re looking at closer to the end of the project, but if any time between now and then presents itself as a good opportunity to have a conversation with us please get in touch and let us know. “
In March, school directors voted to move forward with the project, which would have involved retrofitting the high school into its infrastructure and rebuilding everything.
It is estimated to be worth between $97 million and $110 million. Bids will be out in April. Officials are planning to break ground in June.
Board members are also considering projects at other school buildings. They voted last month to move forward with the first phase of those projects, which will focus on heating and air conditioning systems at Maxwell, West Hempfield and West Point elementary schools, as well as West Hempfield Middle School. That phase is estimated to cost $3.4 million.
“The information that I have in front of me is that according to your current breakdown schedule, the $110 million that you’re sitting on will still be right through April 2025,” said PNC managing director Alisha Henry. “I understand that this could change depending on how the bids come in. So if the project comes in a little bit higher, maybe this will be more aggressively spent.”
She noted that this issue would need to be read at every point along the project. They agreed to revisit the conversation once the bids were opened.
“I can’t by any means assure you that rates are going to come down in 18 months, but the law of economics is that you push inflation until it stops and then, once the government raises rates to a level where nobody can . Anything, everything falls apart and they have to reduce them again,” Henry said.
Director of Schools Mike Alferi noted, “When we started all of this, we kind of knew … we did $110 (million) knowing that it wasn’t enough. I think we’ve all agreed that the second Bond needs to go out somewhere in the mid-24s, early 25s. So it looks like we’re in a better position than most.”
“We’re good to go,” he said. “It’s not like we’re scrambling to get another bond because we don’t have the funding for the project. The plan has always been to put out whatever we need to complete the project.”