READING, Pa. - The Reading School Board voted Wednesday on the proposed $259.5 million budget for the 2017-18 school year.
The budget includes a $3.6 million deficit. The proposed budget uses the district’s fund balance and the restructuring of existing debt to close that gap, which would mean no real estate tax increase or cuts in staffing or programming.
Chief Financial Officer Wayne Gehris and Michael Setley from Concord Public Financial Advisors Inc. offered an alternative to fill part of the deficit -- a bond re-issuance.
"Working with Concord Financial, we developed a refinancing plan to potentially save the district approximately $3 million," Gehris said.
"What we're asking for is the board's approval to allow the administration the flexibility on the right day to do the refinancing and achieve approximately $2.6 million savings for the district," Setley said.
Because the volatile market could change, or even eliminate, the amount of savings, the approval would include a threshold of savings set by the board; if that threshold was not met, the bond would not be reissued, and the board could structure the amortization of the savings to save it over time or save it up front.
Setley said there's no way of knowing which direction interest rates will go, but said, "this [bond re-issuance] works for your budget. It's well within the parameters of what is acceptable within the municipal finance industry, and we hope to be able to grab it within the next six weeks."
Gehris said officials been looking at this for two years, watching trends, and periodically testing the potential savings, and the officials believes that those savings may not be available in the future.
"We just want to have the opportunity to pull the trigger if it is beneficial to the district," Gehris said.
The proposed budget can be viewed at on the school district's website. The school board will vote on the final proposed budget during its regular meeting on Wednesday, June 28.
Parents who have kids in the Governor Mifflin School District spoke out tonight at a community forum and town hall-style meeting, as the district looked to take the conversation off social media and bring it face-to-face with parents.Read More »
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