The New Kensington-­Arnold School Board is considering another multimillion-­dollar bond issue for work on the district’s schools.

The board is entertaining borrowing $5 million. That money would be added to $8 million in federal covid relief funds to pay for the work.

Superintendent Chris Sefcheck said the money would be used to improve air quality in the district’s four schools.

“There are a number of improvements that the district needs done in addition to this, so the bond would enable us to pursue energy savings projects, air quality improvements and brick pointing,” Sefcheck said.

School board President Tim Beckes said air conditioning would not be added because of the expense.

The covid grant money is not enough to complete all the capital improvements that need to be done, Beckes said.

“All the vents on the buildings are past end of life. We’ve been keeping them running,” he said. “Unfortunately, our buildings are all 60-plus years old.”

The district last borrowed $4 million in 2020 for roof work and other capital projects. Most of the roof work is done, Beckes said.

Including refinancing of two prior bonds, the total taken out then was about $7.9 million, said Joe Muscatello, managing director of public finance for Boenning & Scattergood.

New Kensington-Arnold has about $29.3 million in debt, Muscatello said. It is currently scheduled to be paid off in 2033-34.

The total annual cost of the district’s debt is $3.67 million, which will drop gradually to $1.8 million in 2034.

After reimbursement from the state, the current cost to the district is about $2.7 million a year, Muscatello said.

The new $5 million borrowing would increase the district’s debt to $34.8 million, Muscatello said.

The school board did not vote on the proposed borrowing during its most recent regular monthly meeting on May 3, during which Muscatello gave a presentation on the district’s options.

Muscatello said the district has two ways of borrowing the money. One, known as a wraparound, would increase the district’s annual debt payments by about $209,000 and extend the payoff of district’s debt to 2036.

With that method, the district pays mostly interest and the bulk of the $5 million principal would not be paid until 2034-36.

The other option is a 20-year loan, or level debt. It would add $380,000 a year to the district’s debt payment and extend it to 2042. This method costs about $230,000 less in total interest, Muscatello said.

Muscatello said Standard & Poors has improved the school district’s rating from a negative outlook to stable. That could help with getting a lower interest rate and buyers for the bonds.

As for whether now is a good time for the district to be considering a bond issue, given economic conditions, “You don’t know what the future could hold. That’s the biggest problem,” Muscatello said.

“A project that needs to be done should be done now,” he said. “You don’t know where the rates could be or if the liquidity market starts to tighten up where are rates going to be. If I need the money and I need to do the project, let’s borrow the money.”

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