Last Updated: Apr 27th, 2015 - 11:04:56

Colonial Heights school budget absorbs big insurance cost hike
By James Peacemaker, Jr. Managing Editor
Mar 4, 2014, 15:46

COLONIAL HEIGHTS — School Superintendent Dr. Joseph Cox Jr. presented a budget Tuesday night that uses leftover money from the previous year to pay for big increases in insurance and retirement costs.

The $36.4 million spending plan for fiscal year 2015 expects a $164,259 funding increase from the previous year, but relies on less money from the city. The schools expect to get $87,746 less in local funding based on lower real estate assessments. The budget uses a $1,323,646 balance from the previous year to maintain staffing and salary levels. But there will not be cost of living adjustments or merit raises.

The budget presented by Cox was balanced based on the best estimates they have. The School Board will review the budget and numbers could change with work sessions planned later. Final state funding numbers won’t be available until after the General Assembly session ends March 8.

Cox said he tried to be realistic with the way the economy is.

“I hope that I can stand up here one more time [before I retire] and tell you things are better,” he said.

School staff expect to see at least a $462,000 increase in insurance costs for next year.

This is based on an expected increase of 15 percent.

Their current provider recently came back with a 35 percent increase in premiums. Costs have jumped significantly, with the company losing money on the deal. The company had a loss ratio of 114 percent, meaning it paid for $1.14 in services for every $1 it collected in insurance premiums. The typical loss ratio for the industry is 80 percent.

The schools pay for $3.5 million of the $4 million paid out for employees’ premiums.

The school system sent out a request for proposals, looking for a cheaper insurance company. The new bids came in Monday and are being reviewed.

But cost is just one aspect that needs to be reviewed. They also need to make sure most employees can keep their current doctors.

“You want to go with a company where you don’t have to radically change who they are seeing,” said School Board Chairman Mike Yates.

Yates also noted that the big jump in cost doesn’t necessarily mean it will continue climbing. He said a few people with major health problems can make a big difference on what the insurance company has to pay in a year.

Another thing that impacts the budget is that the state discontinued funding for a 2 percent raise for employees. The school system will pay to maintain that raise.

Also, Virginia Retirement System rate increases will cost the school system another $498,000.

Meanwhile, the number of students is decreasing. Cox said expected increases from Fort Lee families never materialized.

Only one person from the public spoke out on the budget Tuesday night.

Colonial Heights Middle School history teacher Rick Ridpath said he wants to see step increases in salaries, saying it has been six years since they were offered.

He said this is his 18th year teaching but his pay reflects that of a 13-year teacher.

“Many teachers across our system work second jobs to make ends meet,” he said.

Ridpath said more is being expected out of teachers and they are not being paid more.

He said it is having a bad impact on morale.

Copyright © 2004 - present