Hazleton Area and Crestwood school districts expect to save more than $2.5 million by refinancing debt while bond rates remain low.

In Hazleton, the school board OK’d a refinancing package two months ago that business Manager Robert Krizansky expects will save $2,244,000 and will close Friday.

On Thursday, Crestwood’s board can authorize a deal to save $339,000 by refinancing $6.1 million left on bonds floated six years ago.

Since then, the average rate has fallen to 1.39% from 2.73%. Crestwood can still pay off the balance as scheduled in 2030, financial adviser Michael Vind said during a committee meeting with the board Thursday.

The pandemic slowed the economy and depressed rates, but Vind noticed a change recently.

“Rates have started moving back up as the vaccine is rolled out and some positive economic news starts filtering through the markets,” he said.

Rising rates might influence other municipalities, like Hazleton, that are considering refinancing. Twice last year, Hazleton City Council discussed borrowing $3 million for fire apparatus and refinancing $8 million, but so far the council hasn’t acted.

If Crestwood’s board agrees to refinance, the district will reap most of the savings in 2023, but payments will drop some in 2022, too, Vind said.

For Hazleton Area, most of the savings will happen next year, but Krizansky said incremental savings will continue in the following two years as well.

Hazleton Area is refinancing funds borrowed in 2012 for projects that included two school conversions. The district remade a commercial building into Hazleton Area Academy of Sciences in Butler Twp. and refashioned Bishop Hafey High School into Maple Manor Elementary/Middle School in Hazle Twp.

Hazleton Area’s recent audit said $28.4 million remains outstanding from 2012 bonds. Krizansky said the refinancing also includes $9.4 million of bonds from 2016.

The audit, for the school year ending June 30, 2020, said the district owed $120,631,369 on all bonds. After that, Hazleton Area borrowed $4.59 million to convert libraries into classrooms in November 2020.

Last year, the district paid about $14 million in debt service. Payments will range between $13.2 million and $14.4 million through 2028. After that, debt service drops to $10.2 million in 2029 and $3.5 million the following year.

Moody’s Investors Service gives Hazleton Area a bond rating of A2, which is the sixth highest of the agency’s 16 ratings.



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