Published Wednesday, March 5, 2003
Herald Staff Writer
Sharon school directors and school officials have to decide if they are going to change insurance carriers, and, more immediately, where to come up with nearly $600,000.
The district is a member of the Western Pennsylvania Schools Health Care Consortium, which is made up of 12 districts. The consortium told school directors last week that there will be large rate increases this year and next, board President Melvin Bandzak said.
The district pays about $2 million a year for health insurance -- the district's second-largest expense next to wages, Bandzak said. That amount is going to increase nearly 30 percent, or $600,000, this year, he said.
"We have some real problems," Bandzak said. He said Superintendent Dr. Donna DeBonis and Business Manager James Wolf have been meeting to see where the district can cut unnecessary expenses. The board may have to borrow money to pay the premiums, he said.
Bandzak said there were "inklings" last fall of problems with the consortium. He said directors asked questions but didn't get any answers.
"We had some indications that there were some cash-flow problems," he said but added that directors had no idea how much those problems would cost.
Last year, teachers were asked to make a one-time payment to the consortium, and the member districts were asked to prepay for one month to help alleviate temporary cash-flow problems, Bandzak said.
Bandzak said hearing the dollar amount was "like getting punched in the stomach ... Obviously it (the cash flow problem) was more than temporary."
Directors have to decide whether to withdraw from the consortium but don't have to make a decision until June 30, Bandzak said.
Each school district has two representatives in the consortium for a total of 24 people serving; a committee of eight acts as management and works with a consulting firm, Tra-Tech of Hermitage. Bandzak said directors are questioning why consortium representatives weren't aware of the problems.
"We want to do what's right by the employees but in the same token we have to do what we can afford," Bandzak said. "We're concerned about next year but we have a bigger problem right now."
The district is under contractual obligation and must pay the increase this year, Bandzak said. He said directors met with consortium representatives last week, and he hopes they will take steps to stop the rising costs.
Other Mercer County districts in the consortium are Reynolds, Jamestown, West Middlesex, Hermitage and Farrell. School officials from those districts did not return phone calls from The Herald.
You can e-mail Herald Staff Writer Kristen Garrett at:
kgarrett@sharonherald.com