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EF seeks to borrow $3.12M

| Saturday, Oct. 4, 2008

The Elizabeth Forward School District on Friday sought permission to borrow $3.12 million as it struggles to pay legal expenses.

The 2,700-student district needs the loan to pay $3.07 million in penalties and expenses stemming from an age and gender discrimination lawsuit it lost earlier this year, along with other legal penalties, the district said in papers filed in Allegheny County Common Pleas Court.

The district said it can't raise taxes because this school year it reached the state's legal taxing limit of 22.66 mills. PNC Bank would extend the seven-year loan at an interest rate of 3.29 percent.

A district spokeswoman and lawyer did not immediately return phone calls Friday.

In September 2005, a dozen female teachers at Elizabeth Forward filed a lawsuit alleging they were hired at the district's lowest pay grade despite their experience. The district subsequently hired younger teachers, some of them men, at higher pay grades. A federal jury in April sided with the teachers.

The district must pay $9,183 to the Pennsylvania State Employee Retirement System and $14,979 in FICA withholding taxes arising from a separate court decision, the court papers state. Borrowing costs boost the amount needed by an additional $25,000.

Jay Himes, executive director of the Pennsylvania Association of School Business Officials, said he knew of about a half-dozen other districts forced to borrow from banks in the past five years.

"It is not common," Himes said. "School districts typically have reserves for the purpose of meeting those unforeseen costs. You do this in unanticipated circumstances when you've run out of options."

In 2006, the district paid $666,000 in damages to three female teachers in a similar discrimination case. In February, it agreed to pay $52,500 to settle a lawsuit brought by the parents of a former West Penn Elementary School third-grader who said she was publicly humiliated by the principal, who later quit, after being falsely accused of stealing $5 from another student.

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