Northampton Weighs $30 Million Credit Line as School Construction Costs Top $108 Million

Northampton County Supervisors are considering establishing a line of credit of roughly $30 million to make sure enough money is available to finish the county’s middle and high school construction program and proposed career and technical education project.

No decision was made following Tuesday night’s presentation to the Board of Supervisors. County Administrator Matt Spuck said the county has enough construction money available to continue paying expenses until approximately March 2027.

“No one’s asking for a decision tonight,” Spuck told supervisors. “You guys can poke at this for the next three months and really be comfortable with the decision you make.”

The school project was authorized in 2022, with construction beginning in spring 2024. School Superintendent Dr. Lisa Martin reported Tuesday night the project has been delayed again to October 2027, as the current best-case completion date for the middle and high school project, about six months later than the previous April 2027 target.

The projected all-in cost of the middle and high school modernization and CTE work is approximately $108.6 million.

Spuck and Martin identified a current financial need of $19.3 million. That includes $4 million to restore the construction contingency, $6.8 million for the local share of the CTE project, $7.5 million that was unfunded from the outset and a $1 million allowance for additional consulting.

The county and school division have already set aside another $10.5 million for school capital needs, $8 million from the county and $2.5 million from the school division.

“The only reason that we would need the full $30 million is if Davenport comes back and shows you a compelling reason to borrow the money that you have in your savings account,” Spuck said.

Davenport nevertheless recommended establishing a line of credit for roughly the full $30 million. Establishing the credit line would not require Northampton to permanently borrow all $30 million.

Courtney Rogers of Davenport compared the proposal to a home equity line of credit. Northampton could draw money only as it is needed and generally pay interest only on the amount used. Once the projects are complete or nearing completion, the county could decide how much of the balance to pay with cash and how much to convert to long-term debt.

“Essentially, it’s there if you need it,” Rogers said. “Hopefully, you won’t have to use all of it.”

Rogers said the strategy would allow supervisors to postpone a permanent borrowing decision until they have a clearer picture of final construction costs.

“Once the capital projects are either completed or near completion, then we can determine what is the optimal split between the cash we want to use and permanent financing,” she said.

Rogers modeled several possibilities, from using substantial cash reserves to permanently financing nearly the full amount. The eventual annual budget impact was estimated at roughly $900,000 to $2.5 million, depending largely on how much cash Northampton ultimately uses. That represents roughly 2.5 to 6.75 cents on the real estate tax rate under Davenport’s scenarios.

A separate county staff example showed that financing $19.3 million for 20 years at 5 percent would require annual payments of about $1.55 million, equivalent under that presentation’s assumptions to roughly $41 a year for each $100,000 of assessed real estate value.

Using more cash would reduce future debt payments but also reduce Northampton’s financial cushion. Davenport reported that the county’s unassigned fund balance stood at approximately 19 percent of operating expenditures in 2025, compared with a 21 percent median among comparable localities. Northampton’s minimum fund-balance policy is 10 percent.

The proposed CTE renovation represents about $10 million of the overall capital plan. Approximately $3.2 million in grant funding has been identified, leaving a projected local share of about $6.8 million.

Superintendent Martin said the roughly 50-year-old building no longer meets the needs of modern career and technical education programs.

“It is not up to design standards of the 21st century,” she said. “We’re not where we need to be for our students there.”

Officials cautioned that the $10 million CTE estimate could change once bids are received.

The CTE building was part of the original school plans but was removed when construction costs exceeded the available budget. The decision was made jointly by the Board of Supervisors and School Board through the school enhancement committee.

Northampton also already carries about $5.3 million a year in existing debt service, a figure Davenport expects to remain relatively flat for the next six to seven years. Additional permanent borrowing would therefore likely require new revenue or reductions elsewhere in the county budget.

Supervisors asked Davenport to provide additional information showing how the different financing options could affect the county’s ability to respond to an emergency or finance future capital projects.

Currently, revenues from bond sales are set to be depleted on March 27.