We felt that that's less um impactful on an employee than moving the deductible. So, if your deductible is $500 and then we say, "Oh, you know, that's one of the ways that you manage insurance costs. If you do it for your car, you raise and lower those deductibles. So, if we were to raise a deductible, that really impacts every single staff member. If you raise the maximum out of pocket, that just means that somebody who's already in that insurance thing is is going to end up paying more over the maximum. Does that make sense? Sorry, you got it. Nicole doesn't get it. Nicole, like uh when we do um or Miss Marquez um your insurance, Jay, do you know a good way to explain it? >> I always turn to you. >> So I So deductible is what you pay out of pocket of where the insurance begins to cover some of the cost.
So you have a $500 deductible. You might have to pay medical expenses up to $500. Dollars 501 above might be covered at a certain percentage percent. Yeah. Um, maximum out of pocket means that let's say your maximum out of pocket is $3,500. Once you've passed that deductible, the next $3,500 that you spent out of your pocket, >> once you've done that, you are not paying out of pocket anymore. Now, insurance is covering all those at 100% all of the rest of those costs. So, let's say you went in for surgery and your surgery cost $5,000. you would pay all of the first 500. From 500 to 3500, you'd pay 80 or you'd pay 20% of it. And then once you got above the um 3500 mark, you'd pay all of it. So you'd pay the first 500, you would pay um >> Insurance would pay all of it after the 3500.
>> I'm sorry. Yes. Insurance would pay all of it after 3500. So you'd pay the first 500, you'd pay 25% of the next three or sorry, 20% of the next 3,000, which would be another $600. So you're out of pocket for $1,100. And then everything beyond the $3500 insurance would pay. So that $5,000 surgery, if that was your only expense that year, you would be out of pocket for $1,100. If we increased the maximum from $3500 to $5,000, that shift of $1,500 would cause you cause you to pay 20% on an additional $1,500. So rather than that initial dollar amount, you'd pay an additional $300 out of pocket. >> Only if you're continuing after your deductible, though, right? >> Correct. Yeah. If you didn't have an expense that went that far, you wouldn't be affected. Which is why Miss Shapiro said it doesn't affect every employee.
it. So instead of impacting every employee by shifting deductible, now you're only impacting the the small percentage of employees who get to the maximum out of pocket. >> It just means you're paying 20% longer >> is what it means when you get so you paid your deductible 500 now you're in an 8020 plan with the insurance. Insurance is paying 80 80% of it and you're paying 20% as your portion of whatever costs you got going on. It means you're going to keep paying that 20% for longer. The maximum out of pocket just means that it's the maximum you'll pay out of your pocket. So it it isn't, you know, cost prohibitive to our staff to increase that. It's the least damaging way to deal with the and so the choice is though increase that and that's what's on the table right now. We don't know what what Meat and Confer is going to determine is the best choice.
But what happens is if we do move that medical um maximum out of pocket, we're able to move our insurance increase from 13.4% to uh 9.99%. So I've got the 13.4% right there at $615,000. the difference between the $615,000 if nobody decides to make any changes to our insurance um and the $750 that had already budgeted, the dollars are already there and earmarked is enough to cover the employees portion of this year's increase. Does it make sense to cover this year's increase with employees? That's some of the conversation we're having at meet and confer. Um so part of that may be we cover half of it. I we're not uh based on what we're getting from our insurance is that this is not the first of the increases. We're looking at increases for the next four to five years in insurance because of pharma and some other I mean that's a whole another that's a whole another study session and we bring them in to talk to you.
I'm not the insurance expert but our insurance experts are saying four to five years of increases. So our staff will eventually experience increases. it's we don't have the district fiscal ability to continue covering it 100% forever. Well, it's not 100% but the portions that we we do cover. So, I mean, these are just some of the decisions that we're making right now on meet and confer. Um, but we do have the ability to cover that and that is like a very big topic in our employee surveys is that they are looking for those medical benefits. So, uh, something that was already planned, something we already had the dollars for, and this is on the medical side. And again, investing in our staff, investing in our staff and making this the place they want to come work. We also did some uh uh look at ourselves compared to our neighbors.
We are doing well there. That's one of the reasons why um I'm recommending some lookouts at having the employees share the cost of the increase this year. not a full not putting the whole thing on employees but a shared inflation to cost and goods and services. I I realized that um last year I calculated that on salaries and benefits. So I went, "Oh, I shouldn't do that. That I made our number too big last year, but again that's a little conservative. Just gave us some extra dollars at the end to put into our fund balance reserve." I relooked at it. I recalculated it and that's where we are there. I'm not seeing any um major utilities increases this year. Um the ASRS decrease, the reason that number is different is because last year that ASRS decrease should have been 027 and that number should have been 74,000.
Uh I had caught that on our budget item. I just wanted to point it out this year, but I had caught it before uh we took the final budget item to the board. Staffing adjustments through attrition. this is how we're going to deal with the staffing that we have this year that isn't in alignment with our ratio, our approved ratio. And so then that puts us at a budget balance carry forward estimated at 50 5.3 million. Um we're looking for um keeping that fund balance reserve target at 4.6 at 12%. But also wanted to put in um the meet and confer. These are the investments in our staff. Um the budget uh absolutely supports a $750,000 investment while also um supporting our fund balance reserves and rebuilding those up to levels that we use this year, the 1.9 million we used to cover teachers this year.
So um we also are recommending the continuation of the 200,000 that is during the year compression fixes. This is stuff that um we discover with HR or something's really out of alignment. we wanted to have the ability to fix it and not have to wait for the next year to talk to meet and confer. Um so that's what that 200,000 is. We're recommending to bring that again this year. And then also um in our talks with meet and confer and what we determined in the compression uh uh compensation compression committee was that if we just don't focus on compression, we're never going to. So, um, right now we have a menu of options in the meet and confer uh portal that talks and I think that's in might be in the the documents that you have. I can go take a look and if not I'll show it to you.
It's in progress. We're still working on the classified data. Um, but it is the the next level. So compression happens in phases. First we're fixing the compression of years of service. This is like I'm a teacher. I got here 10 years ago. I started working. I never came off of my schedule. I've just been making the same amount. Maybe we get a raise here and there. Um, but now I'm a teacher who has 10 years of experience and I start today. So, I'm making the same or more than the teacher who's been here for 10 years. So, what we did is we made sure that those teachers that are our teachers got credit for their years of service in Kraton. And we made a years of service adjustment last year with our um, meet and confer dollars. That was the first stage for compression for teachers.
The other problem with teachers is that when you move from one year to the next year, not that we do years of service adjustments, but what we can do is it make those increments even. They were all over the place. They're not consistent. Like in some years, like if you've been on one place on the schedule, if you move to the next level, you lose money, which was weird. Uh the schedules were broken. So we have to do schedule repair and extend those schedules so that teachers have movement capability and that it's consistent. That's the only way you can deal with uh compression is to have consistency in your schedules. So the schedules were broken. We're doing schedule repair this year. Uh I believe that costs about 200 no wait 150ish. We gave them five different options for schedule repair. The other thing that was broken for teachers was moving from a bachelor's degree through the course of all your credits to like a master's.
That also was broken. In some places, you would get very little increase because you went from a bachelor's to a master's and then other layers you would get like a $1,200 increase. So, going to fix that schedule costs money uh for the people who sit on it now. But once the schedule's broken, we can manage compression moving forward in the future. It is the one thing that will allow us to keep moving forward and keeping an eye on compression. So we did that for teachers. We brought that to meet and confer. That's on the table this year. We also brought the years of service adjustment for all of the rest of the groups. Uh admin is not included in that. Um we just haven't gotten to it in the committee yet. So, we have about $220,000 on the table to fix years of service for classified staff.
Um, I think I may have shared with some people, we have people in the district who've been here 30 years who are making $17 an hour, have never moved off their schedule. So, um, we fix the schedules. We're putting them back on and giving them credit for the years of service. So, some of those people will be getting some pretty substantial increases in their pay. Um, the years of service is some will and some won't get dollars. That's the the pro and con of years of service. Uh we're fixing uh the broken ones, but then some people they came in already with 10 years experience. So they're just they're making more than they would have, right? Um also then we're going to tier two for classified. We're working in the committee right now frantically to fix and do schedule repair for classified. So all of those things are broken into compression fixes and that's pretty much all we've brought to meet and confer this year.
um all of that would have to fall into whatever we could afford with the 750 and the 200. But what that does do, especially with the focus on the classified support staff, um that gets us in a much better place to handle future compression needs. So then we can make decisions in the future when we have a little bit of money and say, "Put it to this schedule or move this schedule up." We now have the ability to do that because we have repaired schedules. before we couldn't do it. Schedules were all over the place. People were off on their own schedule. We couldn't see who was out of sorts. Uh so we've brought everybody back in to consistent and repaired schedules. So that's kind of what's happened in meet and confer and that's the conversations that's going on there. Um there's more that needs to be done than what we have dollars for.
So we're trying to be very strategic in which options they pick. And then that just brings us down to no surplus or deficit at this point. It will all depend on that budget balance carry forward number uh what we end up at the end of this year where our buckets actually end up here. But right now we're on track to have again despite the enrollment cliff because of the use of our fund balance reserves in the strategic way that they were planned for. and then also um prior planning for those adjustments. We're actually in a pretty good place fiscally despite the declining enrollment. So, I think that's what we're trying to go for. Uh we don't always want to just cry about declining enrollment. Uh we want to plan around it so that the declining enrollment isn't impacting our day-to-day services and the things that we provide kids.
So, I think we successfully did that and I really want to congratulate the board on having a fund balance reserve process and supporting me and bringing that toraton. Um, we actually kind of had a celebration in our fiscal stewardship committee because it did exactly what it was intended to do. I hate that we had to put it in practice. Uh, but I was so glad it was there and I was so glad that everything that we planned in that committee actually worked. Um, so I want to give the committee a really big uh kudos and congratulations because that all came from their work and them um challenging me every time. Why would this work? Why do you think this? What's the data that supports it? What's on your magic spreadsheet? That all came from people challenging me and making sure that I was transparent and had a good process.
So that's I have um like two more slides real quick and then I'm going to wrap it up. Thank you. >> Um, skip the activity >> activity. That's exactly what I just told you about meet confer >> bond and capital. I just want to give you an update on bond capital. Um, this one you can read on your own. Uh, but uh, want to let you know on these budgets that fiscal stewardship committee is working on the updated bond and capital plan. Um, that's because we know the $85 million isn't going to last as long as the last $85 million. So, we're being really intentional about that. Uh, we also are discussing our override and uh, IM and DAA district additional assistance override recommendation that is uh, we're in the election cycle. So, it's in our cycle. It's time to go out um, for this year, but we want to justify that and get all the information, bring that recommendation to the board.
Um, we also have fund balance reserve recommendation, but I just showed you what it was going to be and now I've got to get it through that committee because they do um hold me hold my feet to the fire on those things. Bond budget review that came to you guys in a board update for the BPA uh rebuild update pretty much. I just want to tell you where we're at is about 42.8 million all-in cost, but that's not set. We're still working on it. Um, our director of bond and construction, Ben Parker, has been actively working on ways to uh keep those costs as low as possible. He gave you some of the strategies in that board update. So, if you want to dig into that, you can kind of see all of the things. Um, we're actually, interestingly enough, if we applied inflation and adjusted for the things that we need at Builmore that we didn't need at LCK, we're actually tracking about 2 million more uh than we would have spent at LCK.
um two years ago when we built. So we use them as kind of a a barometer of are we on track with these costs? Is this unreasonable? Uh we checked other school districts, other builds that have been happening. Um this amount also includes the demo which we brought to the board separately when we built LCK. So that wasn't included uh with some of the board discussions and and budgets that you saw. So you know built more is just different. Um, but we did use LCK as as that barometer. Um, so we're going to try to keep cost low with uh three GMPS guaranteed maximum price. The first one's uh the electricity or electric what is it? Electrical. Electrical. >> Okay. It's basically the large panels that feed electricity to the school. There's there's an insane amount of lead time to get them. So, if we don't order them >> right away, then we won't it it'll actually delay the opening of the school.
>> Delay the opening and cost us um a little over $100,000 more. So, in an effort to keep cost down, we've um decided to go with a three guaranteed uh maximum price process. So, we'll and that is in that update. That first one is going to be coming to the board in April. So, I'm so excited that we have Ben. He has just done just all the things that I didn't see happening when I got here at the tail end of LCK. Having our own person who's our advocate who's working on behalf of Kraton, it just makes a difference. It makes a difference in how well this build's going to go and the things that the strategies that we're talking about. We've we don't just have, oh, you know, money's too tight, just cut square footage. No, we're we're being very intentional about what students need.