NEW CASTLE School district borrows money

School officials don't know yet if the new bond issue will require a tax increase.
By LAURE CIOFFI
VINDICATOR NEW CASTLE BUREAU
NEW CASTLE, Pa. -- City school officials borrowed $13 million to help pay for the junior high school addition and pay off an old debt.
Just under $10 million will be used for the junior high school.
The junior high school will be incorporated into the new senior high school already under construction. School officials intend to close the Ben Franklin Junior High School building on Cunningham Avenue once the project is completed.
The rest of the money will pay off the remaining amount of a bond issue the district initially sold in 1987 to pay for renovations to George Washington Middle School on West Euclid Avenue. That bond has been refinanced two other times since then.
Joseph Muscatello of JP Morgan, the district's bond underwriter, said the district can expect to get about $60,000 back from refinancing those old bonds after it pays its other costs.
School officials say they are unsure if the new bond issue will result in a tax increase.
Considering investing
School Solicitor Charles Sapienza said the district is looking into investing $6 million from a capital reserve fund in securities and using the profits to keep millage from increasing.
Another $6 million in the district's capital reserve fund is being used for the building project, he said. The total junior/senior high school project is expected to cost about $41 million.
Sapienza noted there should be savings when the district closes the current free-standing junior high school building and puts those pupils in the newly built junior/senior high school. That money could also offset a tax increase.
Savings can possibly be found in utility and maintenance costs in the new building. There may also be less staff needed in the new building, he said.
The district solicitor noted that there are about 50 teachers who will be eligible for retirement in the next four to five years and that may also bring a savings to the district.
"We're hopeful. It's not the intent of the board to raise taxes," he said.
cioffi@vindy.com