SHARON School district to borrow $1.2 million for payments

The district doesn't have money to cover payroll, debt payments and bills.
SHARON, Pa. -- The city school district will have to borrow $1.2 million today to meet payroll and pay bills.
School officials said Pennsylvania's failure to finalize its education budget and make subsidy payments resulted in a cash shortfall that can be covered only by borrowing.
The school board was advised Wednesday that a $350,000 debt service payment is due Friday and a $615,000 payroll must be met Saturday, and there's $400,000 in bills to be approved by the board at its meeting on Monday, said Michael Calla, supervisor of curriculum and instruction.
Sharon has only $240,000 in reserve funds available, forcing the borrowing, he said.
The school board had approved a plan in October to borrow up to $4.5 million in a tax revenue anticipation note because the state had failed to make the August and October subsidy payments of $1.6 million each.
Calla said that Jim Wolf, district business manager, told the board that Sharon will have to borrow at least $600,000 again by Nov. 26 to meet the second payroll this month.
Account set up
Sharon is borrowing the money from First National Bank of Pennsylvania and has the account set up so it can borrow as little as $100,000 at a time. It will have to pay interest only on the money it actually uses.
At the current rate, Wolf estimated the entire $4.5 million will be used up by sometime in February, Calla said.
Districts across the state are experiencing the same problem, he said, noting that both Wolf and Dr. Donna DeBonis, superintendent, said they are aware of two school districts, one near Pittsburgh and one in the eastern part of the state, that are considering not reopening in January after the Christmas holiday unless the state resolves the budget crisis by that time.