Published Thursday, March 13, 2003
$680,000
Herald Staff Writer
"Give us the straight story."
That's what Sharon School Board President Melvin Bandzak and fellow board members are asking of members of the Western Pennsylvania Schools Health Care Consortium, which provides health care coverage to member schools' employees.
Seven local school districts learned last week that they owe between $160,000 and, in Sharon's case, $680,000 by June to bail out the sinking consortium that is about $4 million in debt. The charges are in addition to the payments the school boards budgeted for this year.
Business Manager James Wolf, a former member of the consortium, recommended directors borrow the $680,000 and pay it back over five years.
Bandzak said school directors "look like buffoons" after Dr. David K. Monsour, co-chairman of the consortium and superintendent of the Brookville School District, told The Herald Friday that "nobody should have been surprised" by the consortium's financial problems and school boards should have been setting money aside in case of a bad year.
Directors wanted to know who the consortium's consultant is.
Wolf said Tra-Tech Inc. of Hermitage is the consulting firm.
Phil Smalley is a principal in the firm. He told The Herald last Thursday he is not allowed to talk about the consortium unless directed to do so by its members.
Director Sandra Hoover asked if Smalley is the same Phil Smalley who worked with Sharon Steel, and Wolf said he is.
Director the Rev. Lora Adams-King asked if the consortium is looking for a new consultant. "As one board member and the wife of a Sharon Steel retiree, I would like to see a new consultant," she said.
Bandzak said school boards weren't told the truth about the consortium.
The boards were all asked to prepay one month's payment. Bandzak said Smalley assured directors on Dec. 11 that it was just to help with temporary cash-flow problems.
In February, directors were told the money was actually a 13th payment for the year.
Bandzak said he's also disturbed by an audit by Black, Bashor and Porsch of Sharon, dated Dec. 6, that says the districts "funded an extra month's deposit."
"When was this decision made?" Bandzak asked.
The audit also shows the consortium overspent $500,000 between June and December and then overspent another $600,000, Bandzak said. He said whenever questions were raised, directors were told everything was fine.
Bandzak said the consortium hasn't saved the school district anything.
"Somebody is culpable here," Director Dominick Russo said. He said the member school boards need to find out who's at fault because everyone was "blindsided. I'm looking at Tra-Tech." Russo said he doesn't feel the "highly paid" consultants fulfilled their responsibility to the consortium.
Tra-Tech is paid $160,000 a year for its services, Wolf said.
Monsour said several things, including increased claims and the consortium becoming self-funded, contributed to the debt.