The court will be asked to approve the borrowing.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
FARRELL, Pa. -- The Farrell Area School District will ask Mercer County Common Pleas Court for permission to borrow up to $900,000 to cover an unanticipated jump in employee health-care costs.
Farrell is one of 12 schools in the Western Pennsylvania Schools Health Care Consortium that notified its members recently that it needs an additional $4.6 million from them to cover a cash-flow problem.
In Farrell's case, the consortium wants an additional $519,876 between now and June 30, the end of the contract year.
Superintendent Richard Rubano said he didn't want to wipe out the district's savings account to cover the debt and advised the school board to consider borrowing the money instead.
The board met in special session Monday and approved that plan, authorizing attorney James Nevant, the board solicitor, to ask court approval to borrow the money.
Court approval is required because the debt is not covered by the regular school budget.
Rubano said the resolution passed by the board authorized borrowing up to $900,000, but that doesn't mean the district will borrow the entire amount.
He said he just wants to be sure there is sufficient borrowing power should the consortium require even more money.
Although Farrell is being asked for $519,876, not all of that money will actually come from school district funds.
Farrell has 272 employees enrolled in the health-care consortium but only 172 of them are paid directly by the school district. The others, such as Head Start employees, are paid out of various state and federal grant funds, and those programs will have to come up with the additional money needed to cover those workers, Rubano said.
Farrell will be expected to come up with $358,836 for its 172 employees, and the grant programs will have to come up with $165,040.