BUTLER TWP — The Butler School District and the union representing its 508 teachers have an agreement on a new contract.

The school board Monday night approved the three-year contract with the Butler Education Association. The board voted 7-2, with Bill Halle and Jim Keffalas voting no.

Superintendent Dale Lumley said the contract, which is retroactive to July 1 and expires June 30, 2018 — includes 3 percent pay increases each year for the 2015-16, 2016-17 and 2017-18 school years.

The current average salary for teachers is $59,829. In the final year of the contract, the average salary will be $65,382.

The contract also has teachers paying more for health care, with the monthly premium increasing by $20 per month, deductibles increasing over the life of the contract and increased co-pays for specialists and emergency room treatment.

Board member Neil Convery asked how the district will be able to pay for the new contract.

Business manager Debbie Brandstetter said the district will save $1 million in health care costs and $700,000 in retirement cost over three years.

Additionally, she said the district is expecting a 1 percent increase in basic education subsidies — generating $853,000 — and is expecting $467,000 in property taxes when the VA Butler Healthcare facility in the district goes on the tax rolls in 2017.

Teachers have been working without a contract since July 1. From July 1, 2014, to June 30, teachers worked under a one-year extension from its last contract, which expired June 30, 2014.