The Quaker Valley School Board will borrow an additional $6 million to cover the excess cost of the . Funds will also be used to cover projected maintenance costs at other district buildings and for athletic fields.
The board unanimously approved a resolution to borrow the funds during a special meeting Aug. 18.
In July, the board and approved the $26.5 million middle school construction project. That amount includes $3 million more than the board expected to pay and finance.
The came even after the board scaled back on certain materials and designs. It also shelved plans to build a retaining wall on Route 65 and install new athletic field turf.
School officials now say that borrowing the $6 million in additional funds is the smarter solution because of low interest rates.
“Essentially we were able to borrow $6 million for the cost of $5 million,” board President Jack Norris said in a statement.
In a released statement, school officials said interest rates associated with purchasing the additional general obligation bonds dropped “significantly” from the time the board initially engaged district bond underwriter Janney Montgomery Scott for the purchase of additional bonds.
The additional $6 million will allow to complete the retaining wall and athletic field area as originally planned.
Moody’s assigned an Aa2 rating to the district’s bond purchase, which means the district doesn’t have to pay insurance to cover the debt, school officials said. Lower interest rates associated with the debt costs combined with Moody’s Aa2 rating also made the timing attractive, officials added.
John Sheline, director of finance, said the district must look at the needs of completing the middle school project as well as the capital expenses the district knows it will face during the next few years.
“Incurring the debt now at historically low rates will save the district from facing greater debt in a year or so,” Sheline said in a statement.
The was originally expected to begin in May, but started in late July after the came in $4.3 million higher than current costs. Despite the delay, officials say the project is scheduled to be finished in time for the 2012-13 school year.
Superintendent Joseph Clapper said earlier this week that the will be open for classes the day after Labor Day in 2012.