The Plum School District has flexibility as it begins a three-step process to borrow $30 million for a building project.

The school board last week authorized district administration to work with financial advisers, bond counsel, an underwriter and the district’s solicitor to prepare for borrowing nearly $10 million for the work at O’Block Elementary and the district’s middle school.

The district would not be committed to the borrowing until late September, board member Mark Stropkaj said.

“We’re not signing today,” he said.

The plan would see the district borrow another $10 million in 2025 and the final $10 million in 2026. This approach gets the district the lowest interest rate possible, and those future amounts could be changed as needed, Business Manager Ryan Manzer said.

If interest rates decrease, the district would be able to refinance every five years, he said.

“I’m really confident in this plan, that this is the best recommendation we could possibly put forth,” Manzer said.

Superintendent Rick Walsh said a lot of work and discussions have taken place over the district’s facilities needs, what it can afford to do and how to pay for it.

Scaling back work at O’Block has freed up more money for the middle school, where work may start first, he said.

“We believe this recommendation, with the expansion at O’Block and updating the infrastructure at Plum Middle School, and also looking at the football field so that the end zone is not on the track, would not only be an update for our students but for the community also,” he said.

Board President Angela Anderson said agreeing to borrow $10 million would not be easy, but she had to remember what she saw and felt on walk-throughs of those buildings.

“It’s easier not to spend the money. I’d rather not spend the money, but I have to remember what that means for our students and our teachers day in and day out in those buildings,” she said.

Board member Michelle Stepnick voted against the resolution because, she said, the district does not have a plan for how the money will be spent.

“We don’t have a project with details of what we’re doing to present to the community, but we’re going to borrow $10 million,” she said. “I’m not voting for this until I see a plan.”

The school board in June accepted a proposal from HDG Architects of Pittsburgh for design and engineering services for the schematic design phase at the schools.

Walsh said HDG will give an update to the school board at its September meeting. It was not clear if that presentation would be at the board’s discussion meeting Sept. 10 or its voting meeting Sept. 24.

Jamie Doyle, managing director of PFM Financial Advisors, said interest rates and market conditions are favorable to the district. She said the district would be able to earn meaningful interest, around 5.4%, while the rates for borrowing are below historic averages.

“That comes as a surprise to many people because you hear all the doom and gloom of the economic news,” she said. “But as a tax-exempt borrower, it’s a very, very attractive environment. You can lock in rates in the low 4 percents and then invest in almost the mid-5 percents.”

The three-step borrowing plan will preserve debt dropoffs for future projects beginning in 2032, Doyle said.

“We’re preserving some flexibility for your future capital needs,” she said.

The district’s existing debt totals about $115.7 million, with about $104.5 million being borne locally. For the current year, the local cost of the debt is about $7.4 million.

The first $10 million of borrowing is structured so the payments start off smaller, under $300,000, until that existing debt is paid off, increasing to over $1 million in the 2039-40 fiscal year.

When all $30 million is borrowed, the local debt payment cost would rise from the current $7.4 million to just over $9 million at the highest.

Copyright ©2025— Trib Total Media, LLC (TribLIVE.com)