The Altoona Area School District’s liquid assets — about $25 million — will last through the end of November, at which point, if the state budget remains unpassed, the district will have to either borrow money to make ends meet or liquidate other assets, Superintendent Brad Hatch said.

During the school board’s committee of the whole meeting Monday, a time when school officials would normally plan a budget for the next school year, officials voiced concerns about not having enough funding to cover the current year.

Hatch said district officials would rather not liquidate other assets because they would be sacrificing “significant interests” and paying penalties. On the other hand, any interest paid on a loan would be unrecoverable, he said, noting district officials are “very concerned” about the ongoing state budget impasse.

“We’re coming up on almost six or seven months of not having a budget,” Hatch said, adding the district is “fortunate” to be fiscally responsible and has a reserve fund that officials are able to utilize temporarily.

“However, it comes to an end at some point,” Hatch said. “Essentially we’re T minus seven weeks to where we’re at critical stages and we’ll have to plan for that as if that’s a real possibility.”

Hatch noted many neighboring districts in the Appalachia Intermediate Unit 8 are already at the point of borrowing millions of dollars to make payroll and keep the lights on in schools. He said the district and other members of the IU8 will continue to lobby local legislators to pass the budget.

“It’s a matter of getting two very polar sides together to find common ground and that’s just not indicative of our country right now, and I’m hoping we can get to more of that point,” Hatch said.

Board member David Francis said state legislators are “not going to listen to us” and are acting “totally irresponsible” by not passing the budget.

“What if we ran a school district like we did the state,” Francis asked during the meeting.

Francis, 77, said he’s “on the backburner of life” and feels sorry for the next generation because of the country’s political divide.

“In the Middle East, hatred is based on religion, and in this country, hatred is based on politics and that’s a shame. It really is,” he said.

During the meeting, Mike McCaig of Raymond James Financial addressed the board about possibly refinancing a portion of the district’s loans.

With interest rates coming down, it’s possible the district’s bond refinancing would be substantial enough that it would make sense to refund a portion of its higher-rate loans, he said.

If the district had the potential to lock in rates today, it would save about $1.3 million over the lifespan of its 2018 bond issue, or about $100,000 annually, Hatch said.

“That’s a significant amount and it would be worth getting a credit rating,” Hatch said. “Market conditions are favorable right now for us to recall loans that can be recalled that were secured at a higher interest rate. It makes sense for us right now.”

The school board is expected to vote on a minimal threshold target savings number at the next regular session meeting, Monday, Oct. 20.

While speaking of a hypothetical timeline, McCaig said the bond would be sold in November, at which point, Raymond James would seek an approval from the state Department of Community and Economic Development before the sale is closed, he said.

The bond cannot be called officially until Dec. 1, according to McCaig.

Hatch said the district would essentially sell the loans and rebuy them at a lower interest rate, generating a savings of about 9%, which would be locked in for at least seven years before those loans could be recalled again.

Mirror Staff Writer Matt Churella is at 814-946-7520.