Southern Tioga School board of directors heard from their financial advisor, Jamie Doyle, of PFM, Harrisburg, Monday.

Doye told the board during their Monday, Sept. 9 meeting that the best thing they can do in light of a facilities study by Quad 3 Architectural Firm about the district’s building maintenance needs would be to keep their debt low, using fund balance funds to begin any project before taking on more debt.

She told the board that if they were going to go into debt for $9.5 million for the projects, with the most, $2 million, needed for Liberty Elementary, they should proceed with “due diligence.”

“There are several ways to fund a project: pay as you go, save up, use cash reserves, issue debt, apply for grants, ask for donations and do fundraisers,” she said.

According to Doyle, the district’s credit rating is A+, which is the highest she said she has seen of any school district in the state.

“You have a nice, short, well-managed debt portfolio that gives you flexibility that most school districts don’t have. You do have a borrowing capacity cap of 225% of your last debt service,” she added.

Using their tax exempt status as a school district is “the most effective way to fund something,” Doyle said.

She also advised the board to “start putting money in place and take into consideration the Act 1 limits in how much they can tax property owners in the district.”

“The base is 2.6% for the upcoming fiscal year. The only exceptions available to you are for PSSRs and special education,” she said.

Southern Tioga will see a higher cap because of adjustments by the department of education, she added.

She advised the board to “consider a wraparound pay structure” for any new debt they take on.

“As old debt is paid off, those dollars are automatically applied to new debt,” she said.

“The taxes needed in millage would be 26 mills and that doesn’t include construction fund anomalies and soft costs,” she said.

Doyle said she was “being a little conservative in my estimates.”

“I would caution you that things change, and you have to have the discipline to do the project when you get there, because it would be very tempting to absorb that into your covering your normal operating expense issues,” she said.

“Would it make sense to refinance the 2015 debt. Your best bet is to do the 2016 bond,” she said.

“That new financing would add about eight years of debt,” said board member Jim Kreger.

Later during the meeting, the board agreed to move up to $1 million into its capital funds account to begin the process of addressing the needs.