Northampton Area School District stands to save about $1.1 million in refinancing, the board of education has learned.

The savings would occur if school directors vote later this year to refinance some $9.97 million in district-issued bonds.

“Obviously, it’s a very good time to consider refinancing,” Chris Bamber, senior managing consultant, Public Financial Management Inc. (PFM), the NASD financial advisory firm, told school directors and administration officials at the Sept. 26 meeting.

Bamber, citing “interest rates near or at all-time lows,” said NASD could realize the savings by refinancing existing debt of 2011 bonds.

The savings, expected to amount to about $233,000 alone in 2017, would be contributed to the district fund balance, which at the end of the 2015-16 fiscal year totaled about $15 million.

Bamber said “interest rates do remain volatile” because of Brexit (the vote of the United Kingdom to exit the European Union) and the United States Federal Reserve short-term interest rate.

NASD Board of Education President David Gogel, referring to the Sept. 26 board meeting agenda item titled Board Refunding Opportunities, said, “That’s opportunities for saving money.”

“It’s a very advantageous opportunity,” Bamber said in agreement.

The net savings of refinancing 2011 bonds would be about $736,000. The net savings of refinancing Series A 2011 bonds is about $400,000, for a total savings of about $1.1 million.

“That’s not $1.1 million coming back this year,” NASD Superintendent of Schools Joseph S. Kovalchik said.

It’s estimated NASD would realize a savings of $233,165 in the 2016-17 school year. The total savings would be realized over about six years.

Bamber’s Sept. 26 presentation was informational. A vote to give Bamber “the head-nod to let us send out the RFP,” i.e., advertise for Requests For Proposals from banks for the refinancing, is expected to be on the agenda of the next school board meeting, 6:30 p.m. Oct. 10 in the NASD Administration Building, 2014 Laubach Ave.

PFM would proceed with a “dual-track approach” for the refinancing, according to Bamber. This would allow the district to choose to refinance on the bond market or the bank market, depending on the most advantageous interest rate.

The all-time low interest rate is 1.29 percent and the rate is now 1.55 percent, Bamber said.

The plan is for school directors to vote in late November or December on accepting one of the proposals. The settlement date for the refinancing is Jan. 5, 2017.

School Director Charles Longacre asked Bamber, “So, the savings could be greater?”

“It could be greater,” Bamber responded.

“That sounds good if it comes across; that’s for sure,” said Gogel.

Noting the additional $400,000 that NASD is receiving from the Pennsylvania Department of Education for 2016-17 and the approximate $200,000 in refinancing savings, Kovalchik said, “That’s $600,000 we’re hoping goes back into the fund balance.”

There would be an approximate $200,000 savings per year as a result of the refinancing over about six years.

After the Sept. 26 meeting, Business Administrator Terry A. Leh told a reporter for Northampton Press that NASD is “looking at both options,” bond or bank refinancing.

Joining the discussion, Gogel said, “Whatever option gives us the most savings” will be the one chosen by the board.

According to its website, PFM is an independent municipal financial advisory firm, serving local, state and regional government and nonprofit clients in their dealings with the capital markets.