Butler Area School District’s board will issue bonds and exit a previous bond swap in a move that could provide the district an additional $10 million for capital projects.

Superintendent Brian White said at board’s Monday, Feb. 23, community engagement meeting that the district had identified roughly $12 to 14 million in potential future capital projects. With uncertainty over whether the district could land enough grants to fund such projects down the road, the district decided to take advantage of an opportunity to find additional funds.

“Interest rates are currently at a level that may make terminating the swap financially feasible. The board authorized similar action in 2023. However, market conditions shifted before we were able to execute the termination. Given the current environment, we believe it is prudent to revisit the opportunity,” White said before the meeting.

It has not been legal for years now in Pennsylvania for school districts to invest in swaps. White said efforts to get out of the swaps predate his time at Butler, and finally doing so will help Butler financially.

New bonds to be issued will terminate the swaps and restructure some existing debt.

“It’s considered a riskier investment than a traditional bond, so we’ve been trying to get out of all of our swaps for years now,” White said.

According to the official language, the board motion passed Monday approves issuing general obligation bonds for the purpose of funding capital projects, and refinancing certain school revenue bonds previously issued by the Butler County General Authority on behalf of the school district.

Butler Area School District has about $46.09 million in outstanding balances from existing bonds, with varying maturity dates and average interest rates.

Alisha Henry, a PNC Bank managing director working with the district, said the district’s debt to revenue ratio is maybe the lowest she has seen from any district of similar size. She said Butler’s debt service is roughly $5.7 million per year over the next 10 years, lower than the percentage of funding going toward paying off debt she sees at other schools.

The district had a general fund budget of around $117 million for the 2025-26 school year.

“Your debt service budget is outstanding,” Henry said. “But that also probably means you have capital needs. But I want you to know we can address those capital needs and not push anywhere near those upper percentages.”

The district will have to prepare its budget for next school year in the coming months.