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HEALTH-CARE COSTS Sharon schools will seek loan

Published: Fri, March 21, 2003 @ 12:00 a.m.



SHARON, Pa. -- Sharon City School District will go to court asking for permission to borrow money to meet unanticipated employee health care costs, but neighboring Hermitage School District hasn't yet decided how it will meet its debt.

Both are members of the Western Pennsylvania Schools Health Care Consortium that is having a severe cash flow problem. The consortium recently asked its 12 member schools to come up with a total of $4.6 million in additional premium payments between now and June 30, the end of the contract year.

Sharon officials were initially told the additional amount wanted from their district was $680,790, but Monday, the board voted to ask Mercer County Common Pleas Court for permission to borrow up to $900,000 to cover the debt.

Business Manager James Wolf said the consortium is now asking that a monthly premium advance payment, made by it members in November to help with the cash flow problem, now be made a permanent 13th payment. For Sharon, that's an additional $180,000, Wolf said.

Melvin Bandzak, Sharon School Board president, said the consortium has also learned that it owes Blue Cross/Blue Shield about $350,000, money that BC/BS fronted for the consortium in making some payments to health care providers when it was the consortium's health care program administrator before November.

Bandzak said the $900,000 figure should be enough to cover Sharon's share of that expense too. Court approval to borrow the money is needed because the debt is not funded in the district's 2002-03 budget.


Meanwhile, Hermitage school officials said Monday that they know nothing about November's advance payment of $174,000 now supposed to be made a permanent 13th monthly payment for 2002-03.

After Monday's school board meeting, Superintendent Karen Ionta and Duane Piccirilli, board president, said it is their understanding that is still to be considered only an advance payment.

Ionta said that, as far as Hermitage is aware, the district has to come up with only the $623,026 additional premium payment between now and June 30.

The payments are to be made in four equal monthly installment and both Sharon and Hermitage have made the March payment.

Ionta said Hermitage hasn't determined how it will cover the debt.


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