FARRELL SCHOOLS Board must generate 150k to pay retirement funds

The pension contribution cost will jump to nearly $400,000 in 2004-05.
FARRELL, Pa. -- The Farrell Area School Board doesn't like having to come up with $150,000 in its new budget to pay employee retirement contributions.
The board passed a resolution Monday objecting to the increased cost, noting that it was paying almost zero to the state pension fund just two years ago.
The board will send copies of its resolution to all of its state representatives as well as put it on a statewide school news wire that will go to all 501 school districts in Pennsylvania.
The fund, which was heavily invested in the stock market, lost money over the past couple of years and the state has directed school districts to increase their allocations to keep the fund sound.
Richard Rubano, Farrell superintendent, said the district has to come up with $150,000 in the 2003-04 fiscal year, which begins July 1, and has been told by the state that its contribution will jump to $390,000 in the 2004-05 fiscal year.
"Don't ask me where I'm going to get that money," he said.
The school district has to front that money in its budget, but the state reimburses it for half of the cost.
Insurance loan
In other business, the board passed a resolution finalizing plans to borrow $488,843 from First National Bank of Pennsylvania to cover a midyear jump in health insurance costs.
Farrell is part of the Western Pennsylvania Schools Health Care Consortium that ran into a cash-flow problem and had to assess its 12 member schools a total of $4.6 million in extra costs in February.
Farrell had to borrow money to pay its share of the assessment. First National will charge 3.38 percent interest on the three-year loan.