By Denise Dick
The city schools Academic Distress Commission is taking over budget authority for the school district because of a projected $1.5 million deficit this school year.
The state-appointed panel adopted a resolution Thursday to approve all expenditures exceeding $5,000 and all contracts. The commission’s charge by the state superintendent is implementing a plan to guide city schools out of academic distress. Its work began in 2010.
The district’s current financial forecast projects expenditures exceeding revenue by $432,000, but the majority of the deficit comes from health care costs.
The district is self-insured for health insurance but since 2008, that line item has been underfunded, according to Mark Paprocki, the commission’s fiscal monitor for the district. To begin to replenish that fund, the amount set aside for health insurance will increase 30 percent, or about $1.1 million.
An entity’s health plan should be funded to 100 percent to 125 percent of the expected claims amount, Paprocki said.
As the number of anticipated claims increases annually, the plan should be funded accordingly. The district, though, hadn’t increased the amount annually, resulting in the shortfall.
Even with the 30-percent increase this year, the fund still won’t be at the 125 percent level. It will be just more than 100 percent, the fiscal monitor said.
Underfunding the plan could result in the district lacking money to pay claims. That would mean the district would have to transfer money from its general fund to cover the costs.
“I think it’s time to get this right, moving forward,” Paprocki said.
Compared with other health plans, Youngstown’s is expensive for the district.
“The health care plans need to be brought in line with others,” he said.
Compared to a Stark County schools health care consortium, the district spends $4 million more per year.
The other plans aren’t as rich as Youngstown’s in employee benefits, either.
“There’s a $225 per year maximum out of pocket expense” for employees, Paprocki said. “It’s, in other words, peanuts. Nobody has that.”
Other plans run $1,000 to $1,500 per year.
“This plan is the richest plan I’ve ever looked at,” he said.
Employee health insurance contributions per pay for administrators is $128.05 for family; $51.22 for single, which equal about 10 percent of the benefit cost.
For teachers, it’s 1.225 percent of salary for family, 0.65 percent of salary for single. For the Association of Federal, State, County and Municipal Employees, it’s 10 percent of benefit cost.
Adrienne O’Neill, commission chairwoman, said she had been in touch with Michael Sawyers, acting state superintendent of public instruction, about the problem and he was involved in formulating the resolutions.
A second resolution passed by the commission requires the district to get quotes of the costs of providing health insurance through a consortium, and to have its health insurance consultant prepare a study. That study will compare coverage details for district employees with other Ohio districts.
Commission member Paul Williams asked whether the commission could vacate the health insurance policies covering employees. Atty. Cynthia Kravitz of the Ohio Attorney General’s office said that question would need to be researched, but she doesn’t believe it can be done.