County, school board divided on employee insurance coverage

By: Michael Campbell | Twitter: @itsthesoup
Posted: May 3, 2018 | 12:00 p.m.

PRINCE GEORGE – Separate or together?

That question is at the center of a debate between the Prince George Board of Supervisors and the Prince George School Board as both sides work to hash out a decision on whether or not the two entities will remain together in regards to health insurance coverage or split up and offer their own coverage to their respective employees and debate on the subject came to a head during last Tuesday’s supervisors meeting.

At that time, two items were added to the board’s agenda for the evening, one of which was dealing with health, vision and dental insurance for the upcoming financial year. Presented by Prince George County Finance Director Betsy Drewry, supervisors were briefed on the changes that can be expected in the three benefit areas.

Speaking on the county’s voluntary dental insurance coverage provided by Delta Dental of Virginia, Drewry said no increases are proposed for active employees and retirees. In addition, she noted there was “no benefit or difference in offerings” for either the county or schools regardless of being combined or separate when it comes to dental coverage, adding that “both County and School staff have pursued and recommend separate dental renewals.”

In regards to vision insurance, offered through Blue View Vision as part of Anthem, Drewry said “slight increases” to employees and retirees’ rates are expected, “ranging from 39 cents to $1.12 per month varying with dependents on coverage,” leading to Drewry and county staff recommending renewal of coverage with Delta Dental and Blue View Vision. 

When it came to the matter of health insurance coverage, supervisors were presented with a pair of options to consider in regards to coverage going into the upcoming fiscal year, separate from the school division or remain combined. According to an issue analysis form provided to supervisors during last week’s discussion, Drewry explained both the school division and county both engaged in bid processes to obtain separate health insurance. Through that process, both the county administrator’s proposed budget and the superintendent’s proposed budget were built using separate renewal estimates with the county expecting to have a 16 percent increase in rates while the schools would see a three percent increase in their rates.

In late March, the county and school division also received combined renewal information at the request of both boards and, according to county finance staff, if the schools were to remain combined, there would be decreases in fixed costs, such as stop-loss insurance and administrative fees, mainly on the county side when compared to a separate renewal. The school division’s fixed costs would “remain relatively unchanged in comparison to a separate renewal.”

Under a combined insurance offering, the county would be able to retain its current benefit offerings and could budget a 12.7 percent increase in premiums, as opposed to a 16 percent increase that would occur if the schools and county separate. In addition, General Fund Health Insurance expenditures in the proposed FY2018-19 could be reduced by over $47,500. 

According to county documents, on April 16, the Prince George School Board voted to renew with Anthem and “remain self-insured on a stand-alone basis,” essentially separating from the county. Three days later, a letter was sent by Superintendent Renee Williams to County Administrator Percy Ashcraft explaining that during a special meeting on April 19, the school board had amended their motion regarding health insurance to state “the schools will stay combined with the county at the county’s current FY2018 insurance rates and employee contribution levels, including H.S.A. amounts,” adding the school board “is requesting the county absorb the additional cost to schools of $254,000 for FY2019.” County finance staff says that additional funding request from the schools would make it so the school division’s rates mirror the county’s rates.

That language and amended motion from the school board drew reactions from all members of the Prince George Board of Supervisors, who vocally stated their concerns about the proposal to keep the county and schools together for health insurance is seemingly being tied to the county being required to provide the school division with additional funding.

“I personally feel like we are being held hostage and taken advantage of,” Supervisor T.J. Webb remarked as members of the Prince George School Board sat in the audience of the meeting. “These are taxpayer dollars. We don’t just pull them out of the sky. I, for one, will not support this if it is tied to the additional funding.”

“[The School Board] voted that they would stay with us as long as we front the $254,000, but it doesn’t say where that money will come from,” Supervisor Floyd Brown, Jr. said. “If we vote on this, we are agreeing to stay with them, which includes providing the money or we absorb a $254,000 increase.”

When asked, County Attorney Steven Micas and County Administrator Percy Ashcraft both told supervisors that, based on the letter received by the county from the school division, a condition of the county and school division staying together for health insurance would be the county either providing or absorbing that $254,000 request from the school division, though finance director Drewry and county attorney Micas both said they had not seen the exact motion that was adopted by the school board at their April 19 meeting and only had the letter provided by Williams to Ashcraft as a guide to the action taken by the school board at that meeting.

Following last Tuesday’s meeting, The Prince George Journal sent an email to the entire Prince George School Board, the board’s clerk and Superintendent Williams requesting the exact wording of the motion that was approved by the board during the April 19 meeting relating to health insurance. According to the draft minutes of that special meeting, Vice Chairman Lewis Stevenson said he wanted to amend his motion from the April 16 meeting that would’ve seen the school division break away from the county in terms of health insurance. 

At the April 19 special meeting, the board unanimously approved an amended motion to “stay joined with the county at their current FY18 rates and employee contributions levels at the additional cost of $254,000, which will be requested from the county to absorb additional costs.”

As supervisors debated the adopted motion by the school board, other members questioned if the school division could use proceeds from their carryover funds request to cover their $254,000 request of the county. In February of this year, the Prince George School Board approved sending a request to the county to have unspent funds from the previous fiscal year returned to the school division to help pay for a number of one-time purchases and capital projects to the tune $2.7 million. At that time, school board members agreed to add a caveat to their request from the county by ensuring that supervisors know the items for which carryover funds would be used can be changed and projects could be added and subtracted as time moved on.

According to county and school system documents, much of the money will be used for security-related costs, technology spending, capital improvements, furniture purchases, and sign-on bonuses for employees who elect to remain employed with the school division in the coming fiscal year, with a $500 bonus for all full-timers and a $250 bonus for all permanent part-time employees, among other items.

During last week’s meeting where this debate took place, supervisors also unanimously agreed to defer a decision on the school division’s carryover funds request for a second straight meeting, delaying a decision on the matter until May 6, nearly a month after the public hearing on the matter. 

For county staff, supervisors were advised unless they opt to shift to categorical funding of the school division, where funds are provided to specific line items, supervisors can only say to the school division that “it is their expectation” that said funds are used for a specific purpose, but little can be done to compel the school division to use it for that purpose once it has been appropriated and transferred to the school system.

Additionally, county leaders were reminded that, while fund balance can be used to cover the requested $254,000, that situation would be using one-time funding to cover a possible recurring cost. The county’s finance staff also told supervisors that, as of last Tuesday, “no recurring General Fund funding sources [have been] identified to provide schools with additional funds for health insurance, other than possibly General Funds savings from [a] combined renewal of $47,564.” If that saving was provided as an increase to the school transfer, the remaining need would be just over $206,400.

Supervisor Webb also expressed his thoughts on the school division’s carryover request being the largest request from the school board in the past four years. This year’s $2.7 million request from Prince George Schools is the largest since FY2015-2016 when just over $1.9 million in carryover funds was returned to the school system.  In 2015, the school division received only $512,562 in carryover funds back and only $408,000 in 2017.

“We’ve got an imbalance here,” he remarked. “There are either one of two issues here, either we are funding the schools too much or it is how the money is being appropriated. The way this language is written, it is tied to the $254,000 and I am against that. I hate to see people get penalized because our employees are just as important as theirs and all this is tying up people’s benefits.”

Following his comments, Webb would enter a motion to renew separate county coverage, splitting from the school division, which, according to county documents, would result in a 16 percent increase in rates, which has already been budgeted into the upcoming year’s budget, and “some minor reductions in benefit offerings.” In addition, finance director Drewry said the “ability to customize health plans would also be eliminated.” For schools, they would “retain the same benefits and could keep rates as budgeted with a three percent increase.”

When asked, Drewry said these increases in the county’s insurance rates mentioned over the course of the discussions will be absorbed by the county as supervisors are committed to not passing along those increased costs to employees.

Minutes later, Webb would withdraw his motion and instead, the board unanimously agreed to table the matter until May 8, where a decision will likely be made on whether the schools and county will remain together for health insurance. 

At that meeting, the board will also consider whether or not to provide some or all of the $2.7 million in carryover funds requested by the school division. During last week’s meeting, Chairman Alan Carmichael said the board is committed to providing some of the carryover funds but an exact amount has yet to be revealed. 

Copyright 2018 by Womack Publishing
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