The Altoona Area School Board authorized the district’s administrators to enter into a borrowing agreement with First National Bank for up to $40 million at an interest rate of about 3.5%.

Board President Val Mignogna, reading from Monday’s meeting agenda, said the agreement would be necessary to maintain payroll and operational expenses if the state budget impasse continues into 2026.

Business manager Sue Franks said the district can meet its operational expenses through December. But if the impasse continues into the New Year, Altoona Area will have to tap into its line of credit, she said.

Mignogna said the agreement stipulates that interest payments will be deferred until the corresponding state funding is received. The agreement’s anticipated expiration date is June 30, 2026.

“Hopefully we don’t need it,” Superintendent Brad Hatch said after the meeting, adding he hopes the state budget impasse will be resolved prior to January.

If it does, Franks said the district will need to borrow about $10 million per month to make ends meet.

Year to date, the district has already lost about $300,000 in interest payments from using investments to pay its bills, Franks said at the meeting.

Outgoing board member David Francis said he’s surprised more people aren’t outraged by the losses.

“I’m surprised our taxpayers aren’t up in arms. I’m upset,” Francis said. “I just think it’s ridiculous that we have to pay interest. We’re losing money and the taxpayers are just sitting there. I don’t hear anybody complain.”

Francis said he’s “completely baffled” by how state legislators have been unable to pass a budget within the past 130 days.

“They should be ashamed of themselves,” Francis said of state officials.

Hatch said the district has spoken with local legislators who have indicated that an agreement to pass the state budget is pending and could be voted on as early as before Thanksgiving.

“But again, until that happens, we need to be in a position, which is why we’re asking that in the event that there is an impasse that we are in a position to remain operational,” Hatch said.

During the meeting, Hatch and other board members recognized Francis for his years of service on the board.

“We talk about wearing the ‘A.’ You will always wear the ‘A,'” Hatch said to Francis, who commended the other board members for “caring about kids.”

Francis said he’s going to miss being a board member. But the district is in good hands, he said.

“Good luck to everybody. I’m going to miss you, and if you ever need anything, just give me a call,” Francis said.

“Be careful of what you offer. We may be reaching out sooner rather than later,” Hatch jokingly replied.

In other business, the board accepted a bid from J.S. Orr & Son to replace Logan Elementary School’s doors and windows next year. The total project cost is not to exceed $1.31 million.

Hatch said the district has been replacing all of its storefronts and Logan Elementary is next on the priority list. The district has been committing funds for the project to its capital reserve for the last couple years, he said.

The work will likely begin next summer and be completed before the start of the 2026-27 school year, Hatch said, adding the district is currently finishing roof work at Logan Elementary.

“Once the roofing is done and the door and window project is done, it will be a full refresh on the building,” he said.

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