A welcome problem: How to spend $7M?
'This is a sheer stroke of luck,' the treasurer said.
By RON COLE
VINDICATOR EDUCATION WRITER
YOUNGSTOWN -- A multimillion-dollar windfall from a stock sale will allow the city schools to build an auditorium onto the new East Side high school, reinstate some academic programs and establish a college scholarship fund.
The board of education voted this week to sell its 134,069 shares of stock in Anthem Insurance Companies Inc., which should garner the school district nearly $7 million.
"It just fell in our lap," board President Lock P. Beachum Sr. said. "The skies opened and a blessing just fell on the Youngstown schools."
"It's certainly a lovely gift, and nobody's going to turn it down," Treasurer Carolyn Funk said. "I always say there is no such thing as luck, but this is a sheer stroke of luck."
Company conversion: For several years, the school district has contracted with Anthem to process and oversee health insurance claims for employees, Funk said.
That meant the school district had a financial interest in the company, but that interest had no cash value until Anthem decided to convert from a mutual insurance company to a stock insurance company last year, Funk said.
The city schools' interest in the company as a policyholder was converted into stock shares. By selling the shares, the district will get about $7 million, depending on the price of the stock on the day it actually is sold, Funk said.
The relationship with Anthem -- to process the district's insurance claims -- will remain the same.
"It really is a windfall," Funk said.
Beachum said the school board will decide over the next several weeks how to distribute the funds.
Auditorium: Beachum and Funk said preliminary plans are to use a big chunk of the money -- as much as $3 million -- to help build an auditorium at the new East Side high school and fund some building renovations not included in the district's $173 million facilities project.
Under state law, the facilities project, funded mostly by the Ohio School Facilities Commission, cannot pay for school auditoriums, leaving many school districts scrambling to find other funds.
"We were thinking of having to raise private funds or not even building an auditorium because it was going to run us $700,000 or $800,000," Beachum said.
Construction of the new high school could begin this fall.
Beachum and Funk said the extra cash also might be used to buy new seats for the auditoriums at Chaney, Rayen and Woodrow Wilson high schools. OSFC does not pay for auditorium seats.
Investing, academics: The remainder of the money will be invested, and the proceeds will be used for various academic-related initiatives, Beachum and Funk said.
For example, Beachum said the district wants to give scholarships to graduates going to college to get teaching degrees. Those students then would return to the city schools to teach, he said.
The district also hopes to use some of the proceeds to help fund its robotics teams and rebuild its drama and speech programs.
"Some of the programs that we had to eliminate -- debate teams and things like that -- we would like to see them initiated back into the school system," Beachum said.
The money will not be used to boost employee salaries, said Tracey Winbush, board vice president.
"This is for the students," she said. "This is not an increase for us to go out on a hiring whim or giving out raises."