The Panther Valley School Board on Wednesday moved forward with a $13.8 million loan with First National Bank as part of a financial strategy laid out by Raymond James Public Finance earlier this year.

The district is borrowing the funds at 4.5% ahead of undertaking capital projects and will hold the funds at a guaranteed rate that is higher than the interest on the loan, Jesse Walck, business manager, said.

The loan is repayable at any time with no penalty, he said. The district opened an account with FNB Bank last month for the borrowing proceeds at that higher rate of return, which was expected to be 5.5%.

The district can use the interest earned on the loan capital to fund matches on grants, or for capital projects, a managing director at Raymond James had explained to the board in May.

Should the guaranteed interest rates drop for some reason, the district can immediately repay the entire loan without penalty, Walck said.

The district will also move money from its Cafeteria and General funds into accounts with FNB Bank at the higher interest rate, Walck said. The board also acted on opening those accounts last month.

The district applied for three Public School Facility Grants through the state Department of Community and Economic Development. The grants, up to $5 million each, are competitive and require a 25% match.

The district sought $5 million toward the construction of a new elementary school, another $5 million for repairs and upgrades at the high school, and $1.06 million for work at the intermediate school.

The district would need to come up with $2.75 million in matching funds, should all three school facility grants be funded.

A feasibility study earlier this year recommended that the district replace its aging elementary school. A new school was estimated to cost $67.5 million.

School board members said they would not raise taxes to fund a new school, instead seeking grants, such as this one, and additional funding sources.

Walck said the district would use these matching grants to replace hot water storage tanks and windows at the intermediate school.

At the high school, the district would use the grant to replace the rooftop HVAC units, which services the entire building except the gym, auditorium, kitchen and seventh-eighth grade wing.

The high school gym HVAC units, which served the gym and lockers, would also be replaced. Electrical switch gears and a transformer would be replaced, as would high school breaker panels and a hot water storage tank.

Both schools would see roof upgrades, if the grants come through.