Published Tuesday, March 18, 2003
to take
out loan
permission
Herald Staff Writer
Sharon school directors Monday voted unanimously to petition Mercer County Court of Common Pleas to borrow $900,000, which if approved, most likely means taxpayers will have to open their wallets a little wider next year.
The money is to cover what the district owes to the Western Pennsylvania Health Care Consortium by June 30.
The board must petition the court for permission to borrow the money because school districts are not allowed to incur unfunded debt.
The district owes the consortium $680,000 to cover a nearly $4 million debt the consortium incurred. The district also made an additional payment of $180,000 in November, which was initially supposed to be a prepayment, not an extra payment.
A mill of taxes generates $96,000 for the district. Directors hope to repay the money over five years. The district would have to pay back $180,000 a year for five years, which would amount to an additional 1.88 mills of taxes a year for five years.
The consortium -- which provides health-care coverage to member schools' employees -- became self-funded this year and uses UPMC Health System to process claims and, in turn, bill the consortium. It formerly used the Loomis Co. of Wyomissing, Pa., and, before that, Highmark Blue Cross/Blue Shield as administrators.
The consortium still owes Highmark money. An audit by Black, Bashor and Porsch of Sharon estimates that the consortium owes Highmark about $410,000, though no settlement had been reached at the time of the Dec. 6 audit report.
School board President Melvin Bandzak said directors hope the additional $40,000 the board is borrowing will be enough to cover whatever money is owed to Highmark.
The consortium is made up of 12 school districts; seven are from Mercer County. Each of the districts owes the consortium $515 per member employee per month for the next four months in order to make up for the deficit. Therefore, the amount each district owes varies based on the number of member employees.
You can e-mail Herald Staff Writer Kristen Garrett at:
kgarrett@sharonherald.com