Sharon schools will get loan for health-care costs

SHARON, Pa. -- City school officials secured court approval Monday to borrow $750,000 to cover unanticipated increases in health-care costs.
The order signed by President Judge Francis J. Fornelli directs that the money will be borrowed from First National Bank of Pennsylvania at a rate of 3.44 percent for five years.
Court approval was needed because the unanticipated health-care costs are an unfunded debt the district can't cover in its budget.
James Wolf, district business manager, said the loan will cost the school district $67,427 in interest over the five-year span.
The school board will have to make allowances in its next five budgets to pay off the loan, he said, stopping short of predicting that a tax increase will be necessary to cover the debt.
Sharon is a member of a 12-school health-care consortium that is experiencing cash flow problems. The consortium recently told its members that it needs an extra $4.6 million to pay its bills between now and June 30. That amounts to $2,063 additional for each employee covered under the plan.
Sharon has to come up with about $700,000 as its share but will have to borrow slightly more should the consortium later require more.