SHARON SCHOOLS Spend wisely, auditor advises; liabilities versus assets cited

The liabilities are more than 13 times the district's net worth.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
SHARON, Pa. -- The auditor for the city school district advised the school board to be prudent with future spending.
"The district has a lot of liabilities compared to its net assets," said William McKnight of McGill, Power, Bell & amp; Co., which did the audit for the 2002-03 school year.
McKnight presented the report to the school board Tuesday. It shows district liabilities of $34,434,000, most of it in the form of loans borrowed by Sharon to pay for extensive renovations of three school buildings over the past several years.
The district had no fund reserves to cover part of those renovation costs, McKnight said, and had to borrow all the money for the work.
Sharon's net assets as of June 30, 2003, totaled $2,541,874, he said.
That was an increase of $1.7 million over the previous year but still small when compared with the district's total liabilities, he said.
Renovations
Sharon is paying just over $2.1 million each year for the next 18 years to repay its debts, which are only expected to grow as the district considers renovations at Case Avenue Elementary.
No project costs have been finalized, but the job is expected to be in the $10 million range, money that Sharon will have to borrow as it has less than $500,000 in its fund balance.
Mel Bandzak, board president, said work on Case Avenue could begin as early as next year.
McKnight said the district should be OK as long as state subsidies and local tax revenues continue to come in.
He noted that the lack of a substantial fund balance forced Sharon to borrow money last year for unanticipated additional health-care premiums.
McKnight said representatives of his firm will be glad to meet with the board to thoroughly review the findings.
gwin@vindy.com