District to use bond to fund lights
Board approves issuance for school athletic field project
WORCESTER — In a 7-2 vote, the Methacton school board Tuesday approved the issuance of a $5.5 million bond to fund the district’s capital campaign projects, primarily the athletic field turf and lights project at the high school.
The approval was granted following a presentation explaining the details of the potential bonds by Glen Williard, managing director of Public Financial Management Inc., and attorney Jonathan Cox of Rhoads and Sinon LLP, two financial consultants.
The district has the option to issue a fixedrate or variable rate bond, according to Williard. Using current market estimates Williard indicated the district could borrow the variable rate bond at less than 1.5 percent interest, or a fixed rate bond at between 3 percent and 4 percent.
Williard recommended the variable bond,
because, he said, it offers the district the ability to prepay the bond if bids for the construction costs come in low or if the district finds unanticipated revenue in the future.
The approval to issue the bond came after much discussion by the board on issues that included not only rates, but also the financial feasibility of borrowing such a large amount of money before bids for construction are received.
Board member Mark O’Neill, citing his background in finance, expressed reservations about borrowing the money before the cost of the project is known.
“I am fully in support of the project but I think we jumped out of sequence here,” O‘Neill said. “I just don’t think now is the time to approve this.”
O’Neill said the magnitude of $5.5 million price tag and the fact that the bond would put the taxpayers “on the hook” for 15 years means the board should take time to discuss more fully the details of the bond and construction options, which would in turn allow the community more time to review the numbers.
Board member Cathleen Barone echoed O’Neill’s concerns and asked about the ramifications of delaying the approval until the next board meeting.
In reply, Superintendent David Zerbe cited the need to give as much time as possible for each entity involved in financing and constructing the project.
“If we wait until the end of February or March we shorten the window available to put certain contingencies in place,” Zerbe said.
Earlier in the meeting, Zerbe presented the board with a time line for financing and constructing the turf project. Bids are due Feb. 19, a contract will be awarded in March, and construction will start in early April and will finish by Sept. 9, he said.
“If we put it off for 30 days it doesn’t give the administration time to do the due diligence and to get it all done in time,” Zerbe said, citing the athletic department’s need to schedule around construction and the need to establish a fundraising committee with enough time to augment financing the project. “My fear is that we will only have half a complex. My recommendation is that we make a full commitment to our students today.”
Herbert Rothe, the school board vice president, agreed with Zerbe’s recommendation to borrow now.
“I think it’s very advantageous to borrow the money now. We have to keep the wheels turning on this,” Rothe said.
Rothe identified the potential for low bids and future capital projects as reasons for moving forward with borrowing. The board has time down the road to discuss additions and deductions for the project that will then give better estimates of how much of the bond will be used for the athletic fields, he said. Rothe also referred to a presentation Zerbe gave that outlined an estimated $4 million in other capital campaign projects for each of the district’s schools, such as facilities repairs and updates. Zerbe and Rothe both indicated that if the athletic field construction costs are lower than estimated, the rest of the bond money can begin to fund those other projects.
Board member Jim Phillips weighed in on the need to keep the project moving along, saying the district has been talking about updating its athletic facilities since the 1970s.
“When the bids come in we’ll have that lively debate,” Phillips said. “Once we come up with that plan and that number, then we are going to be able to determine in our budget if we need to hold back money for future capital projects.”
Board member Brenda Hackett said having the money available before the bidding process concludes might help with those negotiations.
“I think it will let the administration bargain from a position of strength,” Hackett said.
At the Jan. 15 meeting of the Worcester Township Board of Supervisors, Methacton was given preliminary final approval for land development at the high school athletic field complex.
On Feb. 4, the township supervisors will continue the conditional use hearing on the lights planned on the two turf fields covered by the project.