2011-03-06 / News

STC Schools moves forward with cost efficient programs

District looks to save on insurance, energy costs

ST. CHARLES – On Feb. 23, the St. Charles Community Schools Board of Education approved the next step in two programs that will help the district cut costs without cutting programs.

One of those actions could involve significant savings on health insurance for the district in future years. The board agreed to join the Michigan Education Health Insurance Pool last Wednesday, which essentially allows Michigan schools to form their own health insurance company. At the beginning, each district contributes a sum to help build up the funds. Once the district has built up sufficient funds to cover insurance claims, the district will then only have to replace the funds used by employees.

Superintendent Mike Wallace estimated the average cost of healthcare is about $18,00 per employee per year. The average employee doesn’t use all of those costs in health care claims, and the profit would go to the insurance company. By switching to an insurance pool, the district can use the unused claims to lower insurance costs. For example, if an employee used $12,000 in health insurance claims, the district would only need to put $12,000 back into the pool the next year, instead of $18,000.

The insurance pool currently has 14 districts which will begin using the program in May, with 18-20 more set to join in July and 60-70 more applying to join the following year.

The board approved the switch to the insurance pool for all administrators and support staff. Teaching staff will be able to consider using the insurance pool when contract negotiations begin this summer.

Wallace said that the savings are small at first, but that the district expects to save 10 percent on insurance costs in the future, compared to today’s rates.

“It’s going to be a great savings down the road—its spending our tax payer dollars wisely,” he said.

Wallace was also appointed as one of four executives to oversee the the insurance pool.

“I’m very excited about it—the opportunity to our district, that we can maintain coverage at a lower cost, and that I will be an executive overseeing and managing the pool.”

Health insurance coverage levels will not change with the switch. The district will begin using the insurance pool on May 1.

Also during last Wednesday’s meeting, the board agreed to move forward with requests for proposals after Linc Services presented their findings and recommendations from an energy use audit. The district will begin looking at bids for work on the high school boiler, a tune up of the overall heating system, and lighting updates.

The changes are expected to save the district over $30,000 a year. The district will use a state regulated bond to fund the projects, paying off the bond with the energy savings. Because state law requires that the program’s savings pay for the costs, Linc Services guarantees the energy savings—if the district does not save the anticipated amount, Linc Services will write the schools a check for the difference.

“I don’t want to go to the taxpayers to ask them to fund boilers and such,” said Wallace. “We may need to in the future, but I can’t see going to them for a project of this size. We pay this back from our savings and the savings are guaranteed. Its an upfront way to take care of our needs without going to voters.”

During the meeting, the board also discussed preliminary budget numbers for the upcoming school year. If the state makes the cuts of $470 per student that they are discussing, Wallace said the district could see a deficit of $500,000 to $600,000 just in the revenue side of the budget. Retirement costs are also expected to increase next year.

The decrease in the fall student count will also have an impact on the upcoming budget. The February count shows that the district dropped by five students since the fall.

“In today’s economy, you can hardly anticipate this,” Wallace said. “Two families left the day before the count. Most are moving out of necessity, not because they want to.”

The student body in St. Charles has declined in the past five years, with the 2005-06 school year the last time the district has experienced growth. Losses in the past five years have ranged from two students a year to fifteen. Based on the last count, which has not yet been audited, the district has 1098 students.

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