The Northampton Area School District is realizing a savings of more than $2.5 million in refinancing costs after restructuring bonds during an Internet auction.

"You did an excellent job in maintaining your excellent credit rating," Jamie L. Doyle, director, Public Financial Management Inc., NASD financial consultant, told administrators and school board members at the Feb. 11 meeting.

A total of 88 bids came from 10 underwriters. Janney Montgomery Scott LLC was the apparent bid winner with a 1.12-percent interest rate to refinance $22,110,000. The settlement occurred Feb. 15.

NASD will save $2,501,246 over the life of the bond, which extends to 2021. The previous interest rate was in the 4- to 5-percent range.

Because of NASD's excellent AA3 credit rating, bond insurance is not required, saving $54,000.

Doyle said the savings will eliminate the need for restructuring to reduce millage for the Northampton Area Middle School and Secondary Schools Campus Renovation Project.

Originally, 2.35 mills was projected, but now 1.83 mills will be needed.

"So, we're a safe bet?" asked Assistant Superintendent Jeanette Gilliland.

"Yes," Doyle replied.

At the Feb. 11 meeting, board members voted 8-0, with one member absent, to ratify and confirm the preliminary 2013-14 budget, which is now available for public review.

The 2013-14 general fund budget is $89,287,609, the athletic fund is $179,868 and the food service fund is $2,414,931.

The vote also authorized the administration to seek exceptions to increase the tax rate more than the index allowed NASD under Act 1.

As now proposed, taxes would increase 3.14 percent, which is 1.14 percent above the allowable 2.0-percent increase.

There are several mitigating factors concerning the proposed NASD 2013-14 budget – enrollment and class size, teacher retirements and education funding based on state Gov. Tom Corbett's proposed budget.

Based on the NASD average assessment of $57,376.49, property owners would see their school tax bill rise from $2,676.61 to $2,767.84. This represents an increase of $91.23, annually; $7.60, monthly, and $1.75, weekly.

The 2013-14 NASD general fund budget calls for expenditures of $89,287,609 and revenues of $84,974,699, with a deficit of $4,312,910.

To offset the deficit, NASD would use $1,430,000 in committed funds and $1,200,000 in unassigned funds, with the difference made up by the property tax increase.

Proposed is a 1.59-mill increase, from 46.65 to 48.24 mills.

To enact the 3.14-percent hike, NASD must file for an exception from the Pennsylvania Department of Education (PDE), which school administrators would have to do before the March 7 deadline. PDE rules on requests by March 27.

The school board also voted 8-0 to approved the 2011-12 audit report by Gorman & Associates, which reported NASD "to be totally in compliance."