Knoch High School and Knoch Athletic Stadium are one step closer to their upgrades.

The South Butler County School District on Wednesday night heard a presentation on options for securing bond financing for an upcoming renovation project at the high school and throughout the district and installation of turf and track repair at the stadium.

Alisha Reese Henry, of PNC Capital Markets, told the board she has worked furiously for the past month to prepare for the bond deal, so the district can take advantage of historically low interest rates now available.

She said Wednesday that rates have risen slightly since January, but still are extremely low.

Henry asked the board for guidance on how much it wants to borrow for the large project and offered some financial options.

She said at the January rates, the annual payment to borrow $33 million would be $1.7 million; borrowing $34 million would cost $1.8 million per year; borrowing nearly $36 million will cost about $1.9 million per year; and borrowing $37 million would cost the district $2 million per year.

Henry said the amounts borrowed would be slightly lower in the current market due to slightly higher interest rates.

The board members and superintendent had a lengthy discussion on giving Henry guidance on which amount to prepare documents for.

Board member Dale Fennell suggested borrowing the maximum amount because the district previously paid $2 million per year in bond payments with no problems.

Two other board members advocated for a payment of $1.8 million.

Board member Rebecca Boyd suggested the district pay the fees charged for issuing the bond up front using part of the district’s $11 million fund balance, which would decrease the district’s interest rate.

“I think we would be smart in paying these costs up front, so we know our bond funds will go toward the project,” Boyd said.

Superintendent David Foley reminded the board that the amount borrowed would have to pass the annual audit and that general district expenses go up each year.

Foley also said the fund balance should not be drawn down too far, as any change orders that crop up as the project is completed will come from that fund.

He said he would feel safest at an annual payment of $1.7 million or $1.8 million.

Closing intermediate school

A brief discussion followed regarding the potential closure of the intermediate elementary school due to issues with the roof and electrical system, plus declining enrollment.

Foley said the electrical issue is manageable for now.

“I don’t know what our long-term goal is with that,” Foley said.

He added that administrators are meeting with the project architect Feb. 18 to discuss which projects in the district will be completed in the upgrade.

“We need to get going and we need to make a decision,” Foley said of the bond deal.

Henry said in the interest of expediency, she could draw up documents in an amount not to exceed the funds to be attained if the district had a $2 million annual payment, which in January equaled $37 million.

The board agreed to that action, and is expected to choose a set amount at its March 2 meeting.

Henry said the district could have the funds in hand by mid-April.

The main focus of the construction project is to improve academic spaces and make upgrades at the district’s aging high school.