W-B Area Credit Rating Improves As District Plans To Borrow For New School
WILKES-BARRE — Credit ratings for the Wilkes-Barre Area School District have improved from negative to stable as the district plans to borrow up to $137.3 million to fund the construction of a new high school.
The improved credit ratings from Moody’s and Standard & Poor’s are due to a return to “structurally balanced operations,” Superintendent Brian Costello said at Tuesday’s school board meeting. The district wants to build a new consolidated high school on 78 acres in Plains Twp. and merge its three high schools — Meyers, GAR and Coughlin — during the 2021-22 school year.
The board voted Tuesday to advertise the solicitation of construction bids and approved another submission about the building project to the state. The board also approved two checks of more than $4.2 million to complete the purchase of the land for the new high school.
The district bought the property from subsidiaries of Pagnotti Enterprises. The construction plan will cost an average of $6.3 million a year in debt payments, but the increase to the district budget will only be $3.5 million a year, Costello has said.
Debt payments for the new school project are expected to cost the district $264 million and will end in March 2059. Annual payments for the new debt will be smaller in 2019 through 2037, while the district continues making payments on old debt.
The district budget for the 2018-19 fiscal year is nearly $122 million, and the tax rate is $18.0364 mills. A mill is $1 on every $1,000 in property assessment, and one mill generates roughly
$2.7 million in district revenue.
“The stable outlook reflects our opinion that the district will likely maintain structurally balanced operations and preserve or improve its current reserves in light of potential increased costs,” Costello said, reading a report from S&P. “We believe that this will likely be achieved due to the district’s track record of taking the necessary steps and budgetary adjustments that resulted in its restoration of balanced operations.”
In 2016, the school board began cutting costs by eliminating jobs for 37 employees with furloughs based on program cuts to library services, art, technology and family consumer sciences. Officials have said the high school consolidation will save more than $2 million a year by eliminating more than 20 teaching jobs.
Kim Borland, an attorney and member of the anti-consolidation group Save Our Schools, submitted an objection to the construction plan last week. District officials have failed to provide evidence “that a large, consolidated secondary school is preferable to neighborhood schools,” Borland wrote, adding the location of the new high school will be “remote from any neighborhood, and particularly remote from South Wilkes-Barre.”
School officials have said the district cannot afford to continue operating three high schools and also can’t afford repairing the Meyers and Coughlin buildings.
Also at Tuesday’s meeting, Mark Atherton was sworn in as the newest school board member. Atherton will finish Dino Galella’s term. Galella resigned from the board in October.
The board also voted to keep Joe Caffrey as board president and the Rev. Shawn Walker as board vice president.
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