Marlington Local Board of Education ponders financing package

LEXINGTON TWP. Three Marlington Local elementary buildings would become collateral for Huntington National Bank under a proposed plan to finance capital upgrades.

Jill Murphy, a manger of municipal lending for Huntington National Bank, briefed school system officials Thursday during a Board of Education meeting on terms of a possible financing package.

The loan, or lease-purchase agreement, as it stands currently would be $4.7 million. It would be applied to upgrades at Washington, Lexington and Marlboro elementary school buildings.

Huntington National Bank's financing package would run for seven years on paper. However, in reality it would run for eight years because of closing costs.

"For the amount we are borrowing this seems like a lot of collateral," Board of Education President Carolyn Gabric said. "Are you required to take all three buildings?"

In response, Murphy said it is her understanding state law requires all three buildings be regarded as collateral if Marlington Local defaults on the payment schedule. That is because the proposed capital project involves each school.

If Marlington Local officials proceed otherwise, "I am guessing it is going to be a legal issue," Murphy said.

There was mention of finding a way to remove the planned upgrades at Marlboro Elementary School from this financing package. That is because there is comparatively little upgrade work to be done at Marlboro Elementary. At that school, the plan is to install new windows and doors.

"I think if we wanted to, the district could separate the Marlboro part," Superintendent Michael Shreffler said.

If Huntington National Bank finds itself exercising its collateral right, the financial institution would not put the elementary schools to its use.

But rather, "Huntington leases those school buildings back to the school district to use." Murphy said.

Marlington Local officials are expected to hear a similar financing proposal from Consumers National Bank at a subsequent Board of Education meeting.

Reach Malcolm at 330-580-8305 or malcolm.hall@cantonrep.com

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