Farrell Area School District is not exactly flush with cash, but the superintendent likes the direction it has been heading financially.

Last year, the district ended with a surplus of $288,672, raising its fund balance to $657,146, and this year's budget projects adding $8,944 to the fund balance.

"We just turned the corner in Farrell," said Superintendent Richard R. Rubano Jr. "And then we're hit with this."

"This" is a $519,000 bill from the Western Pennsylvania Schools Health Care Consortium, which provides health care to school employees in 12 districts, including Farrell and six others in Mercer County.

The consortium is $4 million in debt and billing its member districts to make up the shortfall by June 30.

Last year, the districts made 13 payments to the consortium, instead of the 12 they had budgeted for.

Rubano said he fears the district's health-care cost woes could send it back down the road to a deficit.

"We don't have any money budgeted for that," he said

Rubano does not want to nearly wipe out the fund balance to make up the health-care shortfall. He has set a school board meeting for 5:30 p.m. Monday to ask the board to borrow the money.

The fund balance is a rainy-day savings account that is designed to pay for emergency expenses, but the board may decide that the health-care payment qualifies.

Rubano said the district would need the permission of Mercer County Common Pleas Court to incur "unsecured debt."

Rubano said the district is limiting spending to anything that is essential or would affect students, and officials are scouring the budget for line items in which not all the money allocated will be spent.

Rubano said he would not offer an opinion on how the consortium has been managed, or the fact that it apparently inappropriately borrowed money from the Pennsylvania Public School Healthcare Trust Fund.

"I'm not going to get into that," he said. "That's premature."