For the fourth consecutive year, Parkland School District will be borrowing $10 million of general obligation bonds for capital expenses and various other specified items not covered in the general budget.

The new money may be used for additions and upgrades to school buildings and facilities; technology infrastructure upgrades, security systems and computer purchases; buses; energy audits; land acquisition; reimbursement to the school district’s general fund; and issuance costs and expenses.

At the Dec. 15 meeting, Business Manager John Vignone said $2 million may be applied to land acquisition for a new elementary school.

If a suitable site is not found, or if the district does not proceed with a new school, the amount will be applied to other capital projects.

Vignone said about $1.3 million will be needed to reimburse the general fund for payments previously used for capital purchases.

Issuance costs and expenses will be approximately $200,000.

The bond transaction issue will add about $400,000 a year in debt service for the district through 2029, Vignone said.

Total debt service for 2016-17 is listed at $15.6 million.

Vignone explained the bond money may not be used for salaries or benefits, which consume a large portion of the budget.

The projected cost for redistricting, $492,000, may not be taken from the borrowed funds because it is for salaries and benefits.

The anticipated cost of $2.7 million for full-day kindergarten will not be included in the loan except for capital items such as desks and equipment.

The board approved a parameters resolution to allow the administration and financial team to move at a moment’s notice to get the best financial deal for Parkland.

Scott Shearer, of Public Financial Management, commented on the district’s AA credit rating.

“Parkland is in a very good situation,” Shearer said. “You have a very good direction in the fiscal situation.”

Ken Phillips, of RBC Capital Markets, offered some thoughts on the absence of a state budget.

“Your credit rating is great, but you’re in Pennsylvania,” Phillips said. “If there’s any impact, it won’t be anything you have done.

“Pennsylvania is not in good favor with ratings agencies just now. We’re at the bottom of the bottom.

“We’ve had a great run with historically low rates the last seven years.”

Although federal officials talk about increasing interest rates, Phillips said in a presidential election year such as 2016, rates probably will not climb much.

If the state abolishes property tax funding for school districts, it will have a large impact on borrowing and on how Pennsylvania bonds are traded, explained Phillips.

Jens Damgaard, legal counsel for Rhoads and Sinon, said the state has a formula on how much a district may borrow.

“Parkland is not nearly at capacity,” Damgaard said.

The bond transaction is planned for the mid to latter part of January with the funds becoming available in February.