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Only 1 district school paid off

Debt attached to 13 buildings

The only building in the Butler School District that is paid off is the closed Meridian Elementary School. That means there is debt attached to 13 of the district’s 14 buildings.

The district has 10 buildings open: six elementary schools, an alternative education and emotional support school, the middle school and the intermediate and senior high schools.

Four elementary schools were closed last year in the district’s consolidation plan. Those buildings up for sale are: Broad Street, Clearfield and Oakland schools, with the board approving a sales agreement with 70E Solutions for Meridian Elementary School on March 14.

It is impossible for the district to identify how much debt is associated with each school, according to Deborah Brandstetter, the district’s director of business services.

Because money was borrowed for the remodeling of more than one school at once, the bonds are not organized by school, she said.

In total, the district owes $95.6 million on its buildings, according to Brandstetter.

That debt is with multiple banks, but the bulk of it is with the Bank of New York Mellon, she said.

Other than this debt, the district is responsible for nearly 40 percent of the Butler County Area Vocational-Technical School’s $7.7 million debt.

The state is legally obligated to reimburse some of the district’s payments for debt services on capital projects that meet certain criteria, Brandstetter said, but that only applies as long as the building is owned by the district or used for educational purposes.

With the four schools closed, the district will have a $4.6 million reduction in those reimbursements from the state, Brandstetter said.

However, that $4.6 million reduction will be spread out over 20 years, until mid-2035, she said.

This means that even though the district is no longer receiving those reimbursements from the state, the financial burden is not too significant.

For instance, by the end of June 2016, the district will have had a $441,000 reduction in reimbursement. By that month in 2017, there will be another projected $441,000 reduction, becoming a $13,000 reduction in reimbursement by June 2035.

When the district sells the closed schools, any money from those sales would be paid to the debt service for that school, according to Superintendent Dale Lumley.

However, there are savings that will be realized by closing four schools.

With the decreased use at the closed schools, the district has paid $62,000 in utility costs for the 2015-16 school year through January, she said.

This is savings of more than $47,000 because in the 2014-15 school year, the district had spent $110,000 for the four buildings through January 2015, according to Brandstetter.

The total utility cost for the four buildings in 2014-15 was $207,000, according to Brandstetter, which includes electric, gas, water and sewage payments.

There also will be a $6,400 annual reduction in waste disposal costs for the four buildings as well.

In closing those buildings, the long-term maintenance costs also decrease fairly substantially.

Numbers presented during the consolidation discussion in spring 2015 show that a 14-building district could amass more than $82 million in renovation costs in the next 20 years.

But with 10 buildings, that projected cost decreases to about $62 million.

For now, the district does not have any major remodeling or renovations planned, Brandstetter said. The only capital projects being discussed include roof maintenance and paving work, she said.

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