Roanoke County School Board Budget Work Session - February 24, 2026

001Hey, hey, hey. Down. Hey. Hey. Down. Heat down. I'd like to call our February 24th, 2026 Renault County School Board budget work session to order. Madame Clerk, will you please call the role? Yes, ma'am. >> Mr. London. >> Yes, ma'am. >> Mr. >> Yes, ma'am. >> Mr. Hudson. >> Yes, ma'am. >> Item 2.01, 2026 2022 budget work session number two, Miss Susan Peterson. >> Good afternoon, Madam Chair, members of the board. Uh, thank you for uh setting aside time today to go over our second work session. Um, real quick on our agenda, we're going to take a look at health insurance. Then we'll dip into compensation. Uh we'll take a quick look at state revenue. It's not complete. Uh we only got part of the information from crossover on Sunday, but I do have some

002uh data to share with you. We'll take a a peek at uh kind of where the county revenue stands right now with some um additional comments about that. And then we have a succinct priority list by department um including the tiers in your packets and we'll go over uh some of the ads that have uh occurred, changes in numbers, cleaning some things up. Um so before I get started, I'd like to introduce uh Mr. uh Sam Herby right next to me. He is from Innovative Insurance and they were hired to help us uh with our insurance consulting going forward. We do have uh some of his team uh online and Steve supposed to be up there too. Can you see Steve? >> He's stuck at still stuck in the airport. >> There he is. >>

003So our actuary uh Mr. Steve Parsons is also online. He's got part of this presentation. uh he would have been here um but you know a rodent at the earlier part of the month predicted a longer winter and a blizzard kind of kept his flight from coming in and so uh we get to have him online as opposed to in person but he was going to be here. Um the airports are are not a place to be right now evidently. And so let me go ahead and get swapped to their presentation. And um if you want to go ahead and get started and introduce yourselves. >> You want me to introduce myself? I'd be happy to. My name is Sam Herby. Uh I'm one of the partners of Innovative Insurance Group. We have offices in

004Rowan Oak, Lynchburg, and several places throughout the state of Virginia. We have been in this business for many, many years. I won't bother to tell you how many. Um, very happy to work with y'all. We work with a lot of municipalities and schools throughout the Commonwealth and hope we'll be able to help y'all in some ways and share some information with y'all that may help you work to help your employees. uh have health insurance and have a good benefit plan that'll work for them going into the future. >> Okay. >> And then uh Steve, if you want to get started. >> Yeah, absolutely. I I am not seeing the screen if you're sharing. >> We're on I have it memorized but I can't go through it. >> You should be seeing the screen now. >>

005Who's the one man? So it's coming out through our camera. >> Is the power on your >> It's on mine. He couldn't do the PowerPoint on their laptop. He had to do it on >> the disconnect. >> But he should be sharing that screen. >> What are you guys seeing currently? >> I see a screen that just says Karen Hawks in the center and I see a picture of Steve, but that's all I see. >> Try that. There you go. >> Should I go? >> Yep, you're good to go. >> All right. Well, good afternoon. I apologize for not being there in person. I prefer to being there um to have more interaction. Um with that, Sam, help me um navigate If you have questions um still let me know brief background on myself I

006am a healthcare consultant and I helped build uh two two consulting practices and uh we told those and I'm now in the what I would call my legacy phase as a healthcare actuary in which I'm doing exactly this type of project where I can come in as an independent actuary um and provide insights, data insights and data strategy um to help you manage your plan. And I appreciate this opportunity. The um we received data on February 6, 2026, but we we are um quickly absorbing the data and today we will be touching on the tip of the iceberg uh to this. We will be continuing to work with the data. um data analysis and um work with Sam and his team on datadriven strategies that will help you then align the right partners with those

007those strategies because that's my role um in this process. I have two or three worksheets that I'll share with you in this uh presentation. The one is uh telling the history. The second one is selling the Y which is the high cost payment and the third one is the actual forecast. Um I would encourage you to ask questions uh as you as I go through this. Um please don't hesitate to ask those questions especially if I use lingo or terminology um that you're not familiar with. And then following my slide, Sam will then tell the the how how do we manage this going forward. Um so with that go ahead and go to the next slide. So this slide is really meant to empower you as a board and as administration to um start to

008actively manage your plan. Um yes, being self-insured does present savings 10 to 15%. But um being able to um pursue best practices and opportunities that will um also deliver not only savings for the board but most importantly for the plan participant. So those are the that's the why we are selfinsured. Uh yes, with the savings, but the real opportunity is empowering you and um your consultant to u put in processes and vendors that best align to help manage the plan. Below on the towards the bottom there, we'll also work with the um with Susan on developing a written funding and cash balance policy for the self-insured pal that will allow uh you and the board to understand why we're setting the premiums at the levels we are and why we are maintaining reserves um at

009the the levels we are. Um it's it's a it's a document that is um is valuable because it helps eliminate some of the noise and politics on why we recommend what we're doing and and why you establish those reserves and funding levels. All right. And ultimately this help you fulfill your fiduciary duties and and responsibilities. So, this table um is pretty busy. It has on the top portion the last three years of calendar years of claim information that were used to um project our funding for 2026 2027 the B you know so you'll see going across um we had medical claims of 13 million drugs before re 6 million so a total spend of 19.2 2 million and then Anthem charges a network access fee and those are estimated for this purpose. Um to the

010network access fee is their fee to maintain the network negotiate with the providers um on your behalf and then stop loss that is actual stop loss reimbursement over 250,000. So, you were not responsible for those. Uh, and I'll I'll highlight that in a second. And then because you have your prescription drug program carved in with Anthem, and I'll use the term carved in and carved out a few times here. Um, they provide prescription drug rebates to cover your administrative costs. Um going into 2027 fiscal year, it's going to be $125 per employee per month. Um last year was like $120.37 if I recall correctly. So they are increasing them going into the next year. But going across that um we have net claims of 175 million for 2023. And then there's a big jump to

0112024 of 20.4 million and it's maintained itself at 21.8 million for 2025. The next slide will tell us the why. But if you go back to the left and under the medical you'll see under medical your claims were 13 million then 15 I'll call it 6 million and then 16.6 million. Uh there was some discussion at last year's work sessions whether that was a temporary spike in 2024. Um some often um use the um they al some often will describe every five years you're going to have a bad bad year. Um, as we discussed the next slide, I think it's probably the new normal and that we should plan that for it to be the new normal. And as you can see, 2024 was 15.5 million and then 16.5 million in 2025. And correlated to

012that, your stop-loss reimbursement delta also increased at 944,24 and 1.5 million 25. I'm going to pause and see if anyone has any questions. Okay, the other purpose of this slide is actually at the very bottom right and you'll see 11.4%. That represents two the average healthc care inflation for your plan for the last two years for claims specifically doesn't that does not include administrative costs which our third slide will you'll see above the four 11.4% in the increase from 2023 to 2024 was 16.2% 2% and then went from 24 to 25 yeah 25 it was 6.9%. Um I calculated in the actual um annual rate and that was 11.4%. That is consistent with what I'm seeing in the marketplace. So this discussion that we're having today is not unique to Rono County public schools in

013my opinion. So, as a freelance actuary, I I've for the last five years, I've been working with a good number of groups um including um a couple in Virginia and a couple in in California and then in the middle with Kansas City and and quite a bit in Ohio where I'm located. the the trends appeared to occur in 2024 and I'll get into it on the next slide when we talk to high cost claimants why I believe that's the new normal. Um I hope I'm wrong. I you know this is being recorded so we'll we'll be able to look back every year and see. Um I don't want to be wrong. I mean I'd like to be wrong. Um but but I also want to give you good information so you can plan appropriately. Okay,

014go to the next slide. All right, this is the why. Um there are three columns here 2023 calendar year 2024 and 25. If you go to for all claims over 250,000 in 2023 was 1.3 million, 24 was 2.4 million and 25 was 3.5 million. You have specific stop loss that protects you on those claims over those amount and the negative red there is what Anthem Reinsurance paid on your behalf for those large claims. If you go down to the next row, but you were still responsible for four claimments that hit 250,000. That was a million. In that following year, there were six claimments that exceeded 250,000. That meant Renault County Public Schools had to pay 1.5 million of those claims. And in 2025, you see that we now have eight over uh 250,000 at uh

0152 million. The what I call little big claim is highlighted in the green. It's those claims between 50,000 and 250,000 under your stop loss. I actually coined this term probably 10 years ago working with a large uh children's hospital in which they had 106% loss ratio meaning they were 6% over their budget but they had no stop-loss claims. It was all the what I at that point in time called little big claims. Um there are the little little claims that are just over 50,000 up to your 250,000. This tells a significant story and again it's consistent with I' what I've seen with other plant sponsors. So in 23 it was 59 participants in that um range at 5.4 million. following year which was our big spike was 90 claim uh participants in that little big

016claim bucket just under $10 million. 2025 which we just completed you had 103 claimments in that range at 10.5 million. Below that is are the claims between 25,000 and 50,000. You'll see that those have also jumped into 23 and total uh over 25,000 you'll see was 8.6 million then 4.3 and then 15.6. I'm going to come back and um point out a couple items but I'll just finish um reading this graph. the um or chart, excuse me, claims between one $1 and 25,000. Um I had to estimate 23. I that's part of the where I need to get more data. Um I suspect that will come down, but I you know it's 11 million there. Following year was 8.4 million and the following year it was 8.5 million. So, the vast majority of your claims

017is not what's driving your um increase in claims cost. It's the claims above 25,000 and specifically the the little big claims. So, why is this occurring in my opinion? um we had COVID and hospitals and health systems were um had contracts that ran multiple years and as those contracts but at the same time their their cost of delivering that care was increasing as we increased the wages of the staff and nurses at those health systems. So their cost of delivering those services had increased. Um but they could not adjust their revenue for that until they renegotiated their contracts with the carriers. Um my assumption here is those contracts have been renegotiated. That is um led to increased costs for us as um plan sponsors and participants. And I call that lagging inflation. I'll pause and

018see if you have any questions. Okay, it's important to show this slide because you know we can plan for it this to be a temporary spike or um a sustained spike or the new normal. Um in the next slide we are planning for it to be the new normal. as we set your fiscal year 2027 budget. Okay. So, we we simplified this um slide. There's actually a lot more rows to it, but it was important to show you how we forecast claims and fixed costs for the 2027 fiscal year. And how we do that is we look at two years of claims data for both medical and prescription drug. And then in total that allows us to get to a per employee per month which is on the fourth row there. In 2024 your PEPM

019was $794 and in 2025 was $828. And the note there is the claims include network access fees and then prescription drug the same exercise and $370 to 49. Now that's before rebates which you'll see the negative below in which we take the rebates out. Um and not only do we have lagging inflation occurring, but we have prescription drug spend that is certainly above double digit as you'll see. Um, in the following row where you see trended 7 and a half and 10% I'm assuming medical inflation of 7 and a half% for those claims back in 2024 and 25. I'm taking those old claims and moving them into your fiscal year using 7 and a half% trend. And I'm using 10% for prescription drug. prescription drug uh is certainly often the first place I look when

020I come in and do my actual forensics and helping groups determine what is occurring. Uh so we can define datadriven strategies to correct that with that. Let's let's look at the medical columns again. If I only looked at the 2024 data and ignored the 2025, I would say your claims forecast for medical would be 18,471,000. And vice versa, if I only looked at 2025, I would say 17.9. We are blending those two together at a waiting of 370 as you see there. So our forecast for medical claims is 18,76,000. On drug, I often wait the most current year 100%. In this case, it really didn't matter because the two were only about $20,000 apart. There'll be situations where I see a much wider spread and prescription drug runs a lot truer for the most recent

02112 months. Uh for that, I'm projecting 9,156,000. So total claims projection is 27,233,000. We did not do a claims load. Often underwriters or actuaries may say based on what we're seeing with your demographics in your group um we suggest adding a 5% load or something like that. We we're sensitive to um employees cost share on this. So we we used 100%. And plus we have the 27.3 million. Now we net out the 2.4 million in rebates. That's the $125 per employee per month estimated to be 2.4 million there. Uh you will receive additional rebates above that. But for this forecast, we we are um using an administrative rebate offset of that 200 $125 per employee per month. And then that gets us to claims of 24,923 which is to the right there next to the

0222026 27th fiscal year. If you were this ties to the previous slide in 2025 calendar year you had 21.8 million. So when we look at this as on a pm and I annualize the trend the annualized trend is 9.8%. Then we have fixed cost of 500,000. That's the administrative cost that Anthem is charging. And we have Anthems and initial proposal at a 25% increase on your stop-loss fees to which would be 2,383,000. Uh total of all that as you can read there is 27,86,000 and that's what we're recommending for that portion of the budget. U when Susan presents her budget, she'll be tying in other line items like HR funding. um and um consulting fees and you know other items, but this is this is the big this is the largest chunk of that um

023that budget. >> Susan, are you going to speak about like what percentages that would be for the 1630 participants in your presentation? >> Do you do you want to tell them the percent increase overall? >> Yes. for the impact. >> Um the recommended increase is 22.5% when we bring those other items in and then we compare it to your current funding level >> and and we've broken that down when I get into my slide. We've got two options right now. One, the employee shares in that percentage and the other one the employer is going to take over some of it and we will only push out 10% to the employee. So we we've got two options. >> Well, and and I think and this doesn't involve them, but we have talked about this before in

024terms of what benefits the employee the most, right? Because the higher salary versus the insurance cost, the higher salary affects them with their retirement. We'll talk about that later. >> Plus, so maybe we're not getting into this yet either, but I'd like to know how our consultant that we used for the last what, six months, is that right? how three however many months >> how you've helped us here as well. >> Well, we'll get into that. >> So, we'll get into try to help that a little bit mitigate that for y'all. >> You need to get your bag. >> This slide simply repeats what I've gone through. um not sure we need to spend a lot of time on it. the um important observation I can share with you. I would tell you that with

025the felt funded groups that I've been working with for 20 um 26 and now for fiscal year 20 for those that are on calendar year 2026, my average increase was likely in that 11 to 14% increase kind of supporting my my other observations. Um, and I had several above 20%. Um, I don't like saying, you know, you're you're with others in this, but, you know, I think it's important to share with you that in my opinion as a healthcare actuary, there there's clearly a a trend here. Um, and what this, you know, the first self-unding slide is, there's so much Sam and his team can share with you and I can share with you that will help you manage your plan. I while this is negative news, I hope there's good news coming because there

026are there are opportunities for you uh specifically on the prescription drug side. um as a lowhanging fruit if you will and then there's other opportunities beyond that. You know, it's it's not like I'm coming to you and saying it's going to be 20 recommend 22 and a half% and hold on because it's going to continue to be 8 to 10%. My message to you is it's 22.5% because we have to make sure the budget's in line and as we get additional data and we get access to Anthem's data um we will um Sam and his team will be providing you with insights and opportunities which is my handoff to Sam uh and his slides. Um, any questions before I do that handoff? >> And I would like to remind everyone this was a very slow

027process getting our new consultants. Um so just to share the timeline uh we were kind of waiting for um another uh procurement to go through and that fell through and so then we we went went out to RFP um and by the time we and we rushed the RFP to get um this moving as fast as we could but then the holidays kicked in and so we really I don't think we had a signed contract until Decemberish. So they've really only had the data for about two months. So I don't think and coupled with that we are already in plans through the end of the year. And I think that where they can help is starting going forward, right? Um helping with changing some plans. >> Well, I thought that's why we engaged and when

028we did because we were going to get that maximum benefit. In fact, I'm trying to reme remember the language of, you know, you give us six months, we'll pay for ourselves in six months. I'm looking for where we've paid for ourselves. >> Still planning to do that. >> Still still planning to do that. >> We We're going to discuss that in a minute. >> Okay. >> Thank you. Yes, we going to discuss that. I appreciate your question. >> Yeah. Thank you. >> Yeah, that's where we headed. You're right ahead of me. >> Yeah. >> Okay. >> I remember some of those things. >> Yes, sir. So, I appreciate the opportunity to be here and um to work with y'all. And as Susan said, it's taken a little bit of time to get all the information

029from Blue Cross and everywhere that we need to get it to take a look at everything and try to understand the program that you were running compared to where you may want to end up for this July one and where you may want to end up next July one and going forward. So, that's what we want to talk about for just a few minutes right now. Um the first slide that we put up are just basically some of the goals that I think most people share um in y'all's position. And one is to minimize employee disruption any way you can. Um normally school boards, board of supervised members, uh private industry, what you're trying to do is run a good benefits program that year after year after year your employees are not raising their hand

030say why are you doing this to us? Why is it why is it all this money coming out of our paycheck? Uh why are you downgrading our benefits? Uh you'll see that a second thing says avoid downgrading benefits. Uh it's really easy. I can we can set up a program to save you a million dollars this year just by downgrading benefits. But that's not what you want to accomplish because that's just throwing that responsibility and risk out on the employee. So we want to avoid that. Um we're in the process right now. You know, we want to be sure that you're offering competitive benefit plans. I noticed here there's a a section in your information about schools and counties around you. Certainly, you want to keep yourself in a position to be able to hire

031employees and uh have good employees, be able to reach people that you need to reach. So, we want to be sure we're sensitive to that. Uh researching options to meet employee needs. As we do open enrollments this spring, we will be talking to your employees in person and we'll be asking them what do they need, what's working for them, what isn't working for them to give us more insight into what to do in the following year uh as we go forward. Uh, one of the big things that I think we have always done is educated employees so that they do understand the benefits that are being offered to them that they do understand that y'all are working hard, the administrative team is working hard, Susan's working hard to keep it as good for them as

032possible based on the circumstances that are going on within the industry. Uh I will comment before we go to the next slide. We are seeing a lot of high teen and low 20s renewals right now. I'm not sure where it's all coming from. Partially still probably tied back to the pan pandemic. Uh Steve talked about insurance companies and hospitals and providers renegotiating contracts and certainly that's got a lot to do with it as well. Um, so I think we may be in a situation, you're not alone right now. Uh, we've had some good renewals this year, but I've seen a number of them that are in this 15, 20, 25% range so far, and a lot of them I hadn't seen yet. So, I'm sure that's forth will be forthcoming. If you could skip to

033the next one. Um, what we try to be >> I'm sorry. Yes. >> Contracts renegotiated. >> I'm sorry. How often are those contracts renegotiated? >> Uh usually every two to three to five years. Uh you think it sometime it's kind of forced because a lot of times maybe er physicians will say we're no longer you know we want to change this. So it just kind of goes in cycles. Normally you think about a fiveyear contract but I'm not even sure there that many of those going on right now. They may be shorter term than that. Oh, >> the excuse me, Sam. The the local contract with Carlon, and I if I mispronounced it, I apologize. Um, they negotiated a new contract uh and announced it in February of 2024, which could be coincidental with your

034claims fight. Um, in two years. >> I'm sorry. Go ahead. See, >> the local health system in Rono renegotiated with Anthem and announced their new contract in February of 2024. >> But you don't know how long that was or how long that >> Yeah, I don't know how long that last >> Yeah. We don't know how long. I I having worked with hospitals and health systems that it's actually a niche of mine. Um I would assume three um three years. >> Yeah, that's probably most of them probably. >> And all of that what that basically is, as you know, the hospital all of a sudden for your hernia operation is getting another $50, $100, $1,000, whatever they may be. and and all of that, they just passing that cost right back to you and it

035comes right back to you. So, so what we're trying to do right now, what we've been working on is this slide is talking about, we've requested all of your clinical data from Anthem. Uh, and let me back up one second. One thing that is a little bit difficult is we don't have last year's renewal. And of course we can't we can't get that from Anthem because it was y'all were with the county and that's the county side of things. Um that means when they sent us numbers this year and interestingly enough the numbers that we got from Anthem as a renewal for y'all for July one match up really closely with what Susan Steve have worked on. So those those claims were right on target. uh far as what the Anthem underwriter thinks the cost

036will be, what Steve thinks the cost will be is within just a few dollars of each other. So I think this estimate that you're seeing right now is pretty true to what probably is going to happen. Now with that being said, that doesn't mean they're not things that you can do to try to help yourself. And that's what we'll address here in just one minute, Mr. Greenway. Uh, but we've requested that Anthem send us as much clinical data on the schools as possible. That will help us to see where these claims are coming from and to help point you in a solid direction as far as wellness programs and things you might encourage that will help uh mitigate some of those claims going forward. So, that'll be something we'll discuss in a future meeting. Uh

037we also doing a review and uh reconstructing HSA contribution methodology that you're using now. Is that accomplishing what you wanted to accomplish? Could some tweaks be made there that would be helpful? Uh we're looking into uh the cost of changing your accumulators. Right now your deductibles and out of pocket maximums are running January through December. Your plan is running July through June. And to get that synced back up, we'll uh there'll be a cost associated with that and we've asked Anthem's underwriters to look into that and give us some numbers on that as well so that you can make a decision. Is that something you might want to do? Uh fourth on the list, and I probably should have put that last on the list because I got next slides going to talk a little

038bit more about it. But right now, y'all are not currently using something called a spousal exclusion. And many of the groups around you are using a special exclusion. We've used them for a number of years. A special exclusion, for those that don't know what that means, is it basically says if your spouse works somewhere other than the schools that offers health insurance to them, they're not allowed to be on the school program. So, it's not going to hurt anybody whose spouse works here that doesn't have another option for coverage. it only affects the ones that do have an option for coverage elsewhere at their place of work. Um, that is something that can free up a significant amount of money for you. You've got 442 spouses covered right now. You would probably lose 40% of

039those if you put in a spousal exclusion. And if that were to occur, that just in contribution, employer contribution alone will save you over $600,000 this year in cost that we're looking at. That does not take into consideration what you're going to save on the other side of that in claims cost and all the little big claims as uh Steve likes to call call them. you've had numerous claims of spouses that are in that range that you know you won't catch those claims anymore as well. So that that one move in and of itself and there's no way to tell about the claim side of it. But, you know, going into that that that may save you, you know, five, six, $700,000. Uh, if you take 40% of them, 160, uh, at what y'all are

040contributing towards the premium for them to be on your plan right now, it fixes $600,000. So, that would be a significant savings that you could have there. Um, we're looking at voluntary benefits. The reason for looking at that, um, as your deductibles have increased through the years, right now you got $1,000 deductible, 2,000 to 3,400. As those deductibles have gone up through the years, what happens is the employees having to pay more. You use an HSA contributions to cover that. Well, there are volunteer products out there that uh critical illness, hospital indemnity products that employees can buy with their money to offset those deductibles, which in turn do two things. It makes them more comfortable with what they're looking at because a lot of people that are employed here probably would not appreciate hitting that

041deductible this year and having to come up with two or $3,000. So, they've got ways of purchasing things maybe to offset some of that. And certainly, we'll be looking at all of that into the future. Uh the dental part of it, you're in the consortium right now. We are getting some pricing together. uh just to look at that as to whether that makes sense to come out of there. What we have so far looks like it would make sense to try to come out of the consortium this year would save you a little bit of money. It's not a lot of money because we're talking about dental insurance. Uh your RX analysis, we are currently having that done as well. U Steve alluded to that a little while ago. If you carve out your pharmacy

042benefit management, the PBM side of it, which you got Carol on right now, if you carve that out, you very likely could save a million plus dollars. So, that pricing is being done right now. We'll take a look at that. Whether we can get that done by July 1, I'm not sure, but we certainly can do it by January one if you want to do it mid year. And it's certainly something worth looking at. you may want to do it third quarter. We just have to see what that analysis looks like when it comes back. Um repricing the reinsurance pricing. Uh we're also trying to repric the reinsurance a little bit to see if we can't get a little bit of traction out of that. You know that that amount of money that 2.4 million

043$2.5 million that they're charging you this year. They gave you one point. they didn't give you. They paid you 1.5 million last year and they want 2.5 million this year. There's not a lot of space there between those two numbers given the trending of your claims. There's not a lot of space there. But at the same time, you know, there may be $100,000, $200,000 there possibility. I just don't know until we get a little bit deep into it. But that would be for this July hopefully. Um, in your renewal, you have a wellness credit, which is, I think by memory, I didn't write down. I think it was $29,000 that you have available to you for wellness. Uh, in addition to that, Anthem uh, also allows a universal credit to groups at times, and that

044may be something else that could come into play as I discuss the renewal with them and discuss what works for y'all and where you would like to take this this year. Uh so we may be able to pick up some a little bit of money there. Uh your preventive drug options are always a great option uh that should be driving cost down as you move forward with that. Uh and then we're just looking at the medical pricing all the time, seeing if there's something else out there that may be advantageous to you. So, we're in the process of getting a couple little preliminary quotes to look at there just to see maybe another company comes in and says, "We're gonna save you X dollars." We'll just have to look at that and see if that's

045a possibility. Um, you can flip. Sorry. I'm sorry. And I'm I can stop. I'm not don't want to take up too much of your time, but certainly want to answer any questions that you might have. >> I cannot imagine how a spousal exclusion would be helpful to our employees bottom line. hope >> how it could help their I mean it may help us save a little bit of money but I'm not sure >> it's not saving enough for the damage it's going to cause foresies yeah I mean I can't fathom a way that that could help a family's bottom line if a spouse and a >> and our employee have to have their own individual plans >> you got a good point it's a balancing act right so we're not the highest paid district around

046I mean this has nothing to do with you I'm just for the crowd here so we have to offer things like benefits, right? >> Sure. >> And so we got to figure out what benefits you to come work for Renault County. How can we keep you here at Reno County? We want to hire the best. We want to retain the best. We start stripping this insurance plan down to nothing and we're going to lose some people. Bottom line. >> Well, what what we talking about with special exclusion, excuse me, and and I'll restate this. Um well, I give you a good example from a few years back. Uh I say a few has been probably 20 years ago, 15 years ago, uh family machine business that I worked with, they paid 100% no matter how

047you enrolled, which family own coverage, you paid 100%. And couple of years in a row, they said, you know, the increases were 10 12% I think. It was a hard market at that point. And they were saying, how do we change this? And I said, well, we can downgrade benefits, but I hate to see you do that. Uh what you could do is say, "Okay, um we're not responsible for the spouse. We're responsible for the employee, but if the spouse works some way else, we're not necessarily responsible for that." And I said, "What you could do is change it around and don't pay so much towards adding the spouse to your policy." And they said, "Well, that's all right. We're a family-owned business. we're going to keep doing what they're doing, what we're doing. And

048right the second or third year when we talk looked at this, I said, "Well, look at it this way. That machine shop that competes with you less than a mile down the road here, y'all compete for business all the time. What if I told you 10 of your spaces work for that machine shop? Do you still want to be paying the insurance for them?" So, what I'm saying to you is you've got a lot of spaces on your coverage that work elsewhere and maybe I don't know why they own your coverage other than you offering uh insurance to them and you're paying a larger share to have that own coverage. >> That's a common practice. >> So, it's something to look at. I'm not saying you want >> Well, we're talking about $600,000. Now, granted,

049like you said, that doesn't cover what claims and things like that we would have. 600,000 off the top. Well, that sounds like a lot, but when you're talking about $27 million, >> not that much. >> That's not that much, right? So, we got 442. >> Susan, you may know the answer to this. How many people we have on the plan that are couples working here that it wouldn't affect and I don't think it's quite that many. 60. >> They're in a different category, so I don't think they're going to be in the category. >> Right. That's what I'm saying. So you subtract that from the 442 that we do have, >> you're still looking at close to 400 people that this is going to affect. >> Well, it's only going to affect the ones that

050have the job outside. It doesn't affect the other specialists that >> So they still get insurance with the other company. They come off of our insurance. It's it is a common practice. >> Very common practice. I'm not saying >> well and in the business world you generally make more with a four year or six year eight year worth of college too that's that's a lot of I mean you're looking at >> the majority the backbone of this operation the average salary is probably well under 100 >> right >> so a lot of that I I respect what you're saying because I I've seen it in the business world a lot I'm not saying I agree with it necessarily But what I'm for us what I'm saying is it's worth looking at to take the the

051measure to look at. I'm not saying I agree with it because we don't know the numbers to know >> whether we agree with it or not. But if you're, you know, for instance, another business was doing the same thing, paying and one family had their children, which now you can go up to a 26, 28, whatever it is, >> had had their kids on the plan, too, because they they were eligible to be on that plan at paying that 100%. Well, they were only on that plan because wasn't costing them anything and their business offered it to them, but they weren't going to get on that for the very same reason that, you know, uh it was no cost. So, you know, if you >> Well, it's bottom line is yes, it costs a lot

052to have your spouse, but they're probably doing it for financial reasons because the the spouse insurance is probably going to cost more separate than it would have it on their plan. I mean, because people are going to do what's small. I mean, at least that financial beneficial, >> but if the other company offers it, usually they're paying for it. Now, again, I'm not saying I'm for or against. I'm just saying >> I just don't >> we need to look at everything that might make a difference, but let's just take for example the the key care 1,000 RCS employee $740 employee and spouse, 136. So, you going to tell me that for $2 $290 an employee, a spouse could go out and get their own insurance for a month? >> You don't go get your own

053insurance. The other company offers it, but you're going to be pay more than $200. >> You think they're not going to deduct more than $298? >> I don't know. I don't Maybe the best thing would be to see what the number actually looks like in terms of how many people would that actually. That's what I mean. We need to see the numbers on who would no longer be eligible. What does that number look like? And how much money is that really going to save us? I don't think I think right now we're we're operating in >> the whatifs. I think we just need to >> cost the employees more money if they have separate policies. >> Yes. We're also trying to figure out how we're going to >> the family more >> help our own

054cost. So I think we just have to figure out what these numbers are to see. We don't know anything until we look at what this >> is important for the employees to know, anybody that's listening because it's going to spread like wildfire, but we're going to do everything we can. We're not >> Yeah, we haven't ch we're not changing, >> right? We're just asking questions at this point, but I think we need to see what the numbers look like to see. >> Like you have to just look at individual situations to kind of play it out because like on paper, what would incentivize somebody? Like for example, on our currently on our uh KTR 2000, I mean, the employee only rate is what $93 a month. I'm looking at the back. Whereas, if you add

055a spouse, it jumps up to $630 a month. So, what what would incentivize somebody who could get coverage on an individual basis with another employer to pay that difference, you know? So, be >> I think it's important to try to out. >> Yeah, I that's a great question. I appreciate you asking it. I think there's several things that incentivize them. >> Um, of course, money is part of it. So certainly if their place of work is going to charge them $500 extra dollars if if it's going to charge if the spouse is going to have to pay 500 at their place of work for coverage and they can get on here for 400 they're coming over here. And another way to alleviate this or to work with this is to change what you charge or

056what you pay towards spouses coverage. You know there a lot of different methods and we'll look at all of those. Um, another thing that would encourage people to be on the school coverage, and we've seen this, is people do something 10 years ago and they never look back and they don't change. They don't consider what their options are. And in this case, if you have a spousal exclusion, then that's going they're going to look at it every year. And if the spouse stops working at wherever they're working, I don't want to call the name of a business, but if they stop working over there, they're no longer eligible. They just jump back on coverage here. Well, years ago, all of that changing around was a problem and a fear because you worry about pre-existing conditions

057and you know, can I pick up coverage again? Am I have this pre-existing condition? I have no coverage when I go from plan to plan. You don't have that problem anymore. So as long as you're operating within the qualified event status that the government set forward, then it's no problem to go plan to plan to plan plan. So but a lot of people made a decision five years ago about where to put the space and then never looked at it addressed it again. I assure you and you know another example I give you if I work here and my wife worked XYZ wherever and let's say she works for a company that's got 10 employees and they offer health insurance and actually their plan is better than my plan here but I may not realize

058that because I'm not in the insurance business and if my spouse has a health problem where am I going to put her on the 10 man group on 1500 2,000 man group. I know y'all's coverage has got to be better than what's out on the street. And that's not necessarily true. I can tell you from experience, a lot of those small companies don't have $1,000 deductible. They've got less than that. But people do something once and they don't look back at it. And that's one thing that we try to do during open enrollment. It's what are your options for you to be on here, your spouse or your kids or you are in a situation where you could split your children up or whatever the case may be. That's the ones that will talk to

059us, the ones, you know, that we see in open enrollment time, we'll be asking them all those questions. >> Well, let me say it uh from from our perspective. I know every one of us feel this way. Um and knowing what's coming from Rono County that we just got hit with. We're not there. There's nothing in us that wants to see our employees lose any ground on their pay or their benefits, right? So, I respect what y'all are saying. I'm just saying those are options to to at least see where they come in at. um you know we're going to have obstacles that we didn't expect that uh I mean we should expect from from this group but not not this group but the the group we deal with on their counterparts but um you

060know so I I think we look at every option if it doesn't and and it may not I agree may not be something but I'm not for taking a step back for our employees I fought for a decade to get them a raise every year so and and to move forward. Not where we should be, but where we can be. We've lived within the constraints of uh monies, you know, we've lived within those constraints. Our counterparts don't. They just tax and spend and and uh and use that money. So, uh we have to stay within the restraints of what we're given, right? So, but our employees shouldn't suffer because we have one of the best school systems in in the state of Virginia. So, uh, we're the shining example in this region, in this part

061of the state, and, uh, so for us as a board, uh, I agree with what your sentiments are that we're not going to take a step back, uh, with respect to salary or or benefits, you know, we're going to keep forging ahead and, uh, and doing the right thing for our employees. So, thank you. And I just I just do agree that we ought to look at every avenue we can. >> Yeah. And that's all we doing is >> how do you how do you go about doing what's your methodology as far as I mean do you survey like real people and try to find out what their situation is versus just dealing with the hypothetical because right now it's kind of hypothetical. It is and and one thing you know >> you don't want

062to spring this on the employee >> right >> okay because as I said to start with we don't like disruption in employees because that only causes us more work because they're talking to us about it as well uh because everybody here will end up with my cell phone number and cell phone number of employees and you know we will be helping them with claims we will be helping them with whatever they need. Um, so we like to keep the plans right like they are if we can. We like to keep the employee deduction right as it is. I asked asked an account less than two weeks ago to one of the boards and I said, "What we'd like to see you do is y'all absorb this increase. Leave the employees alone. Leave them right where

063they are. If they're going to get a two or three or 4% raise, we want them to have full benefit of that raise." >> That's right. And let me ask you one other question on this. >> Yes. >> So what and this is just totally off concept but >> uh still within the range of when we're talking about insurance >> as you look at this if we are separate from Reno County because we know what we're doing to manage our benefits and to try and employ you to get maximum dollar usage. Can you also identify if we were separate how that would affect could we be not more profitable in the insurance area but more economical in the insurance area if we were separated totally because they probably need us more than we need them

064I would imagine maybe I'm wrong because you said the smaller groups maybe smaller is better I don't know >> well smaller in the case of y'all and the county neither one of you are small so you're both big enough to be credible and run your own programs. >> Um the question is who who's driving the increases? Are the schools driving the increases? The county driving increases. Um one of the first things we did was contact Anthem and said, "Okay, go to the underwriter and let us know who's driving increases. Interestingly enough, we never got that answer from the underwriter. We got a renewal of the school separate from the county. Who requested it? Who where that came from? I don't know whether that was the county said to separate y'all from then. >> I don't

065know. >> So, they did separate. Is that what you're saying? >> Separated. >> We are separated now. So, we are fully functioning separately than the county. >> Yes, sir. And I think under the same balloon contract though. >> No, they going they going they you're not separate right this minute. You will be July one. >> Okay. >> Uh you completely on your own. >> Do they think they want to tell us that? Any chance they want Sue? Any chance they want to tell us? >> Well, I think we that's kind they could see that we were trying to go that direction. >> Okay. >> Right. And so I think they put in place the mechanisms to try and let us move forward in our own direction with consultant. >> Okay. >> What a huge difference

066if you look between what they've been able to charge premiums on the same plan rehab or something of that too. >> It's what they're charging versus what we're charging for the employees. Not to chase that rabbit, but just not it. >> All right. about catching a quite close. >> Look at like 2000 employee owners for a family. Compare that back with what employ >> right. I got you. You're ahead of us. shocking. And so the numbers we have that Steve presented and the numbers in the renewal, as I said, all the claims are kind of matching up. So this is putting you on your own footing to make your own decisions going forward, >> okay? and putting y'all in position of approving your budget and going to the board of supervis and saying here's what

067we need from y'all and this is why >> I guess that makes me wonder how does that price us going forward have we been with them in that group now we're separated >> probably if you add the two together it'll be the same as if you apart >> you think so yeah so >> keep in mind that the >> I just wondered if the claims being on us is the reason they wanted to separate that. >> Very likely. >> Probably. >> Very likely. >> I mean, they're so sneaky. Yeah. So, >> but at the same time, you know, keep in mind, y'all do go to them for money and approval and they will have to give you I mean, unless they want to hurt the school system, which I don't think the board of supervisors

068wants to do. >> You got a realtor with the news. >> Hope they're not looking to hurt the kids and the and the our school system. So hopefully they will be more than willing to uh help you get across on your own footing and get y'all's plan established and then you going down the road you'll be able to make changes as you need to make changes to satisfy your employees to be in the position that you want to to move your plan forward in a responsible path. >> Perfect. Well, on that note, um I will let you know that we did send a letter to the chair of the R Valley Consortium that we are a part of um to withdraw from the consortium today and that's going to allow us to um let Mr.

069Irvy go out and repric our our dental and kind of because the dental was tied up with that consortium. >> Nice. and we we paid a fee to be a part of that and so now we'll we we will officially be out of that and moving in our own direction for that as well. >> Okay. >> And I will say that the Delta representative said that would be good for the school. >> That's great. >> So they they want to write you business and they said it'll be good for the school. So unfortunately as I said that's not a big not a large amount of money because you don't make dental insurance at $4 some dollars a person versus health insurance at $1,000 a person. So it's not as big a pot of money that

070you're working with, >> right? >> Well, you know, you know why they're able to do this. >> Yeah. >> Political statement there, but we can thank Obamacare for these high rates. >> That's okay. >> We agree with the way able to do this as a supplement for we can they have all that excess money that they pay the benefits that we can yeah absolutely this is I just hope people naive all right so then I'm going to get into the first thing I want to take a look at is um the monthly analysis of our plans and reserves uh we'll look at uh the health insurance plans overall and dive into the premiums and uh touch base a little bit on other post-employment benefits. Uh basically the same information I shared last year. Uh this

071first chart shows last year so cal uh fiscal year 2025 um health insurance claims and reserves uh by month. Uh so if you recall uh the October 2024 the uh let me step back. So we're going from July to June and the uh purple column is the revenue. So the the incoming premiums uh the the um kind of gray brownish color is or gold color is the expenditures and then the green bar is our reserves line. Right? So this is this is history. This is what's happened before, but I think uh the trend is uh in here for you to be able to see that on a monthly basis, right? And so uh last year uh we were in uh a shocking position because uh of that big spike in October of the claims. Uh

072so then we started having to infuse cash outside of what we had planned on uh for the year. And we did end the year with uh 2.2 million in reserves. So now this year um we have run the same type of analysis. So same information going from left to right. The large revenue uh if you recall we put 2.7 or 2.5 2.7 million in uh is a transfer up front uh to infuse some money into the health insurance reserves. So that's why it's such a large uh chunk up front. And you can see that, you know, through December and January, we've kind of been um up and down a little bit. Uh now that uh Mr. Parsons has gotten our claims information and run out a projection for this current year, it does look like

073um we are going to uh be back at a $2.2 $2 million reserve by the end of the year. Um, and so we we do still want to continue to keep our eye and what that balance looks like. The next slide. Um, and these are colorcoded. The next couple of slides, uh, pink is your, uh, key PO 1000, purple is your healthers HMO 2000, and green is your health HMO 3400. Uh, that includes the HSA. The other two include the HA. There are no changes um for any of these plans, so I'm not going to belleaguer uh reading over what all of the deductibles and everything is. Um, but I do want to point out uh one thing that I learned this year. I uh reiterated time and time again uh because it was um

074educated to me that the HSA uh uh prescription did not apply a co-pay until you met your deductible. However, I have learned this year that we have a plan in which if you have a prescription for a preventative medicine, you do pay the co-pay. You don't pay the up to your deductible upfront. And that's just for the preventives. I don't know if you wanted to add anything to that. Yeah, I think the purpose in that and the reason the ACA allowed it is it's designed to help pres prevent diseases which should improve claims over time. And that's why they want wanted that available to the high deductible health plan so that all employees didn't have to meet the 3,400 before they were getting prescriptions covered. So that's the purpose of that. >> I think it's

075a good benefit. So that is something that we we did not necessarily you know the may have uh relayed information that was presented to us not in um the best manner and you know we may have had some employees who took a look at their own medicines and strayed away from joining the HSA because they thought they were going to have more um cost out of pocket. Um, I know I looked at my cost and was like, "Well, that's gonna really hit home hard." But then after I got into a couple of months and realized I wasn't hitting it, I had to reach out to the consult and find out why is there something wrong? Are they not coding us right on the It's sad when my own pocket saving money and I'm calling and

076saying, "Is Anthem recording this right?" Because we're supposed to be charged deductible amount. So, I was actually looking out for the school division using my own personal experience. Um, so I think that's a good thing to know. The other thing to know is that with the HSA, um, the individuals who have that plan, their deductible, and please step in, I know I'm not going to say this exactly right, is required to be on a calendar year basis. I know one thing we want to do is move to a fiscal year basis because that makes sense since we're on a fiscal year basis for a plan, but with the HSA uh it has to be a calendar year because of the IRS and the tax rules and it's it's directly linked to taxes and it affected

077some of our uh current employees because the carryover in the third quarter could not occur either. And so that was something we were not aware of upfront, but we found out during the year. Um, and and we would have advertised that so people could have planned more appropriately. Um, so that might be just one thing to keep in the back of our minds if we change our deductible period. It may not be the same for all three plans. It may be one for the HR and a different deductible period for the other. Am I saying that right? I think so. >> Okay. >> I think so. Yes. What what she is saying is the fourth quarter carryover that you were trying to give IRS won't let you give it to your employees. Uh just as

078we if we change to a plan year deductible, which I can tell you all of our plans that we've ever set up since they started playing year deductible, we set them up plan year. So everything is payroll deductions aren't changing in the middle of the year and all of that stuff. Everything is tracking together. Um that would be certainly something that would be good for you to be able to do. But we're looking into cost of that as I showed on this other slide trying to figure out who does it affect and how does it affect them because the ones under the HSA you can give them deductible carryover. It they gonna lose something. So, we've got to see what that's going to be. Figate, can we change the methodology on HSA contribution and somehow

079fix that so people aren't getting hurt? And I don't know anything I heard Susan say was you could not convert an HSA to calendar year, but what I hear you saying is you can. It's just that when you convert it, they can't get their carryover. >> Right now, it is calendar year. with y'all. >> I don't mean calendar year. I mean fiscal year. >> Yeah. >> The HSA can it convert to a fiscal year or not? >> It can it can go fiscal year and that would be the way to have it and then you wouldn't have be wearing a carryover necessarily. It would be running with your plan your plan year run July through June and it would it would work better that But you're but you're saying that if you're on an HSA

080when we do convert they would not be able to get that fourth quarter carrier. >> What what's going to be happening is what would be happening is the deductible $3,400 that they meet from now till June 30th would reset itself July 1 and they'd be subject again going around with the plan. and that we want to try to be very careful and be sure we figure out how to make it work for everybody to make that change. But going forward, if if it this year or next year you do make that change, then it's going to make it simpler from that point out with whatever we want to do. So it's only a problem because we're not on fiscal year because we're on calendar year >> and then when we convert it'll be if if

081we can't convert it fixed >> right in other words the fourth quarter carryover that y'all have designed that's working for the other plans won't let you give that to them the simple part of it. So we don't want to mess with that. That's a problem nobody needs. try to avoid that. >> Okay. >> Yes. >> So then moving on to the next slide. Um the first several columns are the current year rate so that you can uh see the difference. And then we have two options. Uh both of these options will produce a a 22.5% increase in the premiums to be able to cover the full claims cost uh as uh projected by uh Mr. Parsons, our actuary. The option A is a 22% 22.5% increase to both employer and employee pieces. And you can

082see the monthly change uh for the employer in here. And I'll show you the cost of that on the next slide. And then option B would be a flat 10% increase for the employee over their current year premium. And you can see the monthly uh difference for that one. And then that would uh leave the school division to pick up the difference to get up to the 22%. So in some cases it may be a little more, some cases a little bit less since the structures um we cover different portions of the the premium. Uh the H did not change in any of the instances. Um it is still projected to be 500 1,000 and then 1,200 2400. Any thoughts or comments on that? >> Yeah, it's terrible. >> Keep waiting for some good news.

083>> It's going to get better. Keep waiting. >> Good news from insurance talks ever. I feel like I've been the bearer of bad news for a couple years. >> Um so this is uh the costing on the left hand side. Uh the current year budget and what we have planned. Um we have the forecast in there. And so this middle column is uh after Mr. Parsons projected out what uh the full year of claims would be. Uh we do look like we're going to have the 2.2 2 million in ending reserves and then our budget for the uh 2027 year. Um so regardless of which option you choose the total premium itself is going up 22.5% and so the the revenues are it's just are the revenues going to come from the school division or

084from the employee right and so um I wanted you to see uh the funding cost and and I threw typically we only talk about the general fund but these dollars were pretty high and I think our grants um may have to take it sharpen their pencils and take a look at employees who are in their grants. Um and that could affect them having to shift other costs to the general fund if they have to cover more of uh the employees or them asking to move some of the employees back into the general fund if they can't afford it. It's the lowest paid person on insurance and the pay raise that we are contemplating. >> Okay. >> I want to know if anybody's going to lose money. We'll look at that. question. I apologize. I'm trying

085to be quiet. >> So like in option A, that is the employee picking up what percentage of the 22.5. >> They're picking up 10%. >> 10%. >> Option A. >> No option. >> Option B. >> No option. >> No. Option A. Yeah. No, I'm sorry. >> Is that a 50-50 split? It >> It's 22% 22.5% for both pieces of the premium because the whole premium goes up. But we're splitting the cost. Is that what you're saying? >> And we didn't change our relationship of who pays what portion of the premium. >> So you're keeping it the same as what it was. >> Yes. But we are changing the whole premium for everybody up 22.5. >> I understand. And then option B is a 22.5% increase, but we're adjusting to where the employee doesn't pick up

086the same split. We're picking up more of the money, which is why it costs us more. >> Correct. >> Okay. >> Correct. we we're we're we're taking on more of the cost um upfront. And I I wonder if that may be a strategy we need to take anyway um just to get us to the point of covering more of these little claims. >> Would it be accurate to assume that most of our folks are on the 2000 plan? >> You know, we look at these numbers. I don't have them in front of me. Um I would say probably >> I think that's correct. I think it's a few more on that one. A tremendous amount on the one pass. >> Yeah, >> because they were there before. They didn't change. >> Yeah. Still there. You

087know, that was back to what I was saying a while ago. You know, people get somewhere and they just >> don't take time to look at it. They just let it roll. >> Yeah. But I I think the top two plans have almost equal enrollment. I don't think it's a lot of difference between those. And the HSA doesn't have 350 people right now. If I remember correctly, I don't have that in front of the uh so then you can see the the cost differential between option A and option B. Um the other thing I do want to point out is we did this uh budget right here. The second line on the revenue side, the transfer, that 2.7 million is what we put in as one time money for the 26 year. I have it

088in there in the as a placeholder, but that's something that we need to discuss and and talk about and uh determine do we think we need that to continue to infuse in the reserves or do we think we're going to need that to move back into the general fund to cover other needs with the school division has? We have a lot of competing needs on the priority list. We all know that. And so I think and it doesn't have to be or nothing. We we could um drop that down to one and a half million. Drop it down to a million. Right. >> Our reserves where they need to be where it's recommended that our health reserves will be. >> I'm going to let Steve, are you still on there? Can you come off mute

089and kind of speak? >> You see what I'm saying? We use that money to >> try to >> Yeah. I I don't have the number now, but it would certainly put you very very close to it. >> If we did infuse that money, >> yes, that's what >> And if we don't, we're still in danger of not having strong enough reserves, >> right? >> Well, you can see ending reserves at $6.3 million for for the year 27. >> That's what you project. >> Almost three months worth of claims, which is From my perspective, the bad minimum you should have. >> That's what nobody's been able to tell us. So, I at least appreciate that having a goer. >> Yeah, I agree with Sam. >> So, basically, that's what your recommendation is. Like, if I have

090a savings account at home for unexpected whatever, it's three months my salary. You're saying that's >> three months worth of claims. >> Yeah, you can. You can being self-funded, you can figure if y'all decided July one to leave Blue Cross and go to another carrier, you've got your run egg claims coming at you and that's going to be two and a half months or so worth of claims and claims are running $2 million a month. So that's a bare minimum when I said that that I would want at least that at any and all times because otherwise you don't have a lot of flexibility to say well we want to go to this new carrier but we can't pay this $6 million run it you know can create a cash flow problem for you. That's

091just my thoughts on >> and that's where the um the written funding and reserve policy that we would um build with uh Susan and the team there. That's where we will now then have in writing and I'm going to make this up. We want to target 25% in reserve and but we'll give a range of 20 to 30% Uh but if we go below 20%, we need to do something about it. And likewise, we go over 30%. Now we have a mechanism to bring that back down. >> Basically back in the policy to set a minimum of what we said. >> That's a Yeah, that's a good idea. >> That way we don't think about this in the future, right? >> Where we're guessing. >> Yeah, I think that's absolutely something we'll do. >> Yep.

092So then this next slide um one number that we used to include so I'll go back is an expense in the health insurance fund was our contribution uh to the other post-employment benefit trust. Um, if you remember, um, and for anyone new to the to the the conversation, other post-employment benefits are basically it's our medical plan. Uh, and we are required by governmental accounting standards board to record a liability um on the books and to recognize um the acrruelbased liability associated with this plan. uh we get an actuary report at the end of every fiscal year to be able to record uh this liability and it is we are um uh best practices set up a funding plan to uh set aside money for this. uh in the in the past before the East Gazsbees

093came out, this is really a PIGO type of plan, but they really have recognized that there's a lot of dollars sitting aside in these plans. And so they um have encouraged all governmental agencies uh to not encourage, but by accounting standards, you have to record the liability. Um one thing that will help reduce the liability is to set aside a a physical mechanism to save money for the plan. We did that by joining the VML Veco uh OPED trust. And so we have um an an investment account set up that we for several years put aside $92,290 a year into uh to help build up the funding. Um, if you recall last year, I brought this information to you and we asked to we had the actuarial projection done specifically last year so that we

094could come up with a funding plan. Um, we recognized that putting in the same dollar amount every year was going to tremendously overfund us. And so you can see in that first column, uh, we would be overfunded by the funding ratio would be 136% if we just continue to put that in forever. And although it's a small dollar amount in an annual basis, um, it just is a lot of cash to set aside. So in our actuarial report, uh, we asked them to, uh, provide us best practices, best what is what is a funding ratio to go for? Um, and so the middle column on here was really what we found to be um kind of the cheapest method to get to 75% funding. Um, and it tail is putting additional money in for the

095next five years. Um, and we I I did share this information last year, but it was one of those uh you put it on the burner for talking next year. Uh, and this was something that was paid out of the the health fund. I'm going to recommend that we put this in the general fund for a request this year as a a tier one priority to put it in there so that we can set up this funding mechanism for the next several years, get the cash set aside and the trust and then leave it there and that is our rainy day fund for OPED. Um, and we kind of just set ourselves up uh for that. I would like to take it out of the health insurance fund because I don't want that dollar amount

096to start to um play a factor into the the claims rates. I think one of the reasons why we used down our reserves over the years is because we didn't fund this in the claims rate itself, but we did pull money out of the insurance fund to put the cash aside in the in the trust. Um, and so I would like to I think it's more transparent to pull it out and put it just as a line item in the general fund. So that was just one other um need for money. Any questions on that? All right. So we will kind of switch gears and move into compensation. Um, I'd like to go over the pay plan and scales a little bit and talk about the teacher scale comparison uh with our neighbors and then

097go over the raise and I forgot to type in here. We also have a bonus to talk about as well. Uh, so our pay plan um for everyone who uh it's really a review uh we uh Mr. Rajaw publishes when we adopt the budget he publishes a pay plan. It has a teacher librarian school counselor pay scale. It has everybody else pay scale. It has um athletic stipens and it has academic supplements on it. And so anyone who gets paid is to be paid using this pay scale um off of time sheets or in contracts. And then all personnel goes through um your action to get approved. And so um everything employeewise goes through the school board. The scales are set up uh to have a 1.6% step between each step each year on the

098teacher scale. Um so on the teacher scale each step represents their number of years of experience. So a teacher can clearly go from one school division to another school division and know where they land in their scale and what their their um income will be. Um on our scale uh we also add an education supplement going across to the right so they can see how much that will be based off of their level of education. there is a direct relationship between the teacher scale and the non-teer scale. Uh during the last uh compensation study, they helped us realign and reset both scales so that the differential in the steps in both scales was the same and then the the teacher scales started at a point that was equivalent to um where the teacher would be

099if they were plopped into the non-teer scale, right? Um, so all that being said, then you get on the the non-teer scale and yes, we have 30 steps on that. That does not equate to years of service. It equates to um a calculation of how much experience do you have and uh there are very specific formulas that we use to to place individuals on a step. And then when you get on that step, they proceed as everybody else does. Um so it's it once you get on the step, then you proceed through like all the teachers do. Um but placement on the step is not like a teacher where it is exactly equal to your years of service. Um, so I did want to share that because then um just really pay scales are uh

100a part of governmental budgeting and accounting and and HR. Uh most employers uh that are governments do have a a pay scale in place. I think I know of one school division in all of Virginia that may have gone to pay ranges instead. Uh but most folks use this. Um it is transparent. the teachers know from one year to the next uh what they can expect. Um we do stop it at a certain level and the pay scales are intended not to add after a certain number of years after 30 years. Um and in my opinion that probably relates to the fact that they can retire at 30 years with VRS. And so it really is a career path for them to go through the scales. Um uh what we have implemented in most recent

101budgets uh since there is uh a a desire to support our uh highly educated and experienced teachers is we've been providing them a stipend of $1,000. Um that is uh one-time stipend as opposed to being a part of their VRS compensation. >> I hear you say some of our employees stop at 30 and then some at 31. steps. >> No, they all stop at the same place. I think, correct me if I'm wrong, I think the one scale has 31 and one scale has 30. >> They all have 30. They >> all have 30. >> The difference is our teachers, if you have zero experience, you start on step one. So that's why when you have 30 years of experience, you're on step three. That's just the way we way we show it. Some divisions

102show zero years, you're on zero. We just show zero years, you actually start on step one. So if you have 10 years, you start, you're on 11. That count. Even though it says 31, it's only 30 steps. >> I'm sorry if I misspoke that. >> Um, so this slide we wanted to share a teacher uh comparison uh for ourselves and our neighbors. So this is the 2026 teacher scale comparison. Staff went out and pulled um all of the teacher scales in the first year. You can see Renick County is uh third from the bottom. In the 15th year, they are uh at the bottom and then by the 30th year we become exactly in the midpoint. Now keep in mind every individual school board uh chooses to have different approaches to their scales. Some of

103them choose to have the same exact percent in between every step and you proceed through 30 steps. Some of them top out at 20. Some of them have the same uh dollar amount for the first five steps of their scale. So there are very different strategies that are involved. Um but I do want like to share where we are in comparison. >> Send a screenshot >> to our counterparts. You know, you need to send that to them. I mean, here we are. Why would you mess with funding with the best thing going in Rono County? Why? I just it's a rhetorical question. Well, why would you do that? We're getting more with our people and God bless them for what they do. And that shows the story right there. >> Well, since you're talking about

104that, I'm going to skip and go. >> Well, while you're on that, I do think we need to look at something for the future of trying to fix that 15 year. You know, I mean, Obviously a couple thousand dollars was not lifechanging, but I mean if you start out at 40 almost 48 and in 15 years you're making $11,000 more. I mean that's I don't I'm not a mathematician, David, but what do you think that is like $700 a year raise? Like that doesn't cover inflation. Like that is pathetic. >> I mean, God bless every teacher, but God bless Roto County. >> And then we turn around and raise their insurance 22%. Yeah. >> And that's what I was talking about earlier is I mean the reality is we have got to do something. >>

105I mean do they do they have a concept? Do they understand? >> Are we going to have teachers in poverty is what we're going to have. >> I don't sad. >> I don't get it. >> It'd be interesting to see 2% instead of 1.6 for the first 10 years 2% and then maybe down the last few 1.5% or whatever. >> I can't imagine taking that and recruiting with it, right? Like how do you It's a miracle that we can recruit anybody when you're telling me that I put 15 years in your organization and I'm making less than a thousand dollars a year on the average spin race. That's terrible. >> And we're going to give you less funding and try and get you to pull more. >> It just blows by. >> There are divisions

106who do things like that like Franklin County for example. I guess they still have it. You get to year, I don't know, 14, 15, like there's this huge jump. So there are divisions who do >> play the middle years against the ending year. Yeah, you can see that. >> And I think there's like if I'm wrong, but I think by top seven >> they only have 20 >> stay on 20th scale forever, >> right? Which is why they go down to last place on 30 30 years. >> But that's a lot of money over the span of time. >> Yeah, >> that's right. you know, but and again getting back to your comments, I mean, we look at our placement in the state, you know, with our test scores and all that good stuff. And

107then this is >> you're exactly right that this says it all. I mean, this is they send please send a from requ that that he wanted you to have this bubble chart right here. They'll love it. In fact, uh, put it in a box, wrap it up, and send it to them as a gift from from Tim. That I mean, you you can't say enough to get them to understand, but it's amazing what our people do here at Ron County Public Schools. >> Well, just because this came up two years ago, so u the previous slide that shows how we compare with our neighbors, you actually provided that to them. I think it was year before last. um because we knew we were getting challenged on why aren't we giving the same percentage raise as

108the county and that's why I wanted to point out well you know I don't think the county pay scales have that same sort of des you know disparity than than we do on the on the teacher side of things wanted them to understand that >> well and not to just sit here and gripe I would love to see some sort of plan that you guys can work on to try to alleviate some of this within a few years I mean I understand that we can't do you know, next year, right? But I don't know, three years, five years, some sort of plan where we can start investing more into our staff to try to fix this instead. I mean, because it's one thing to let them know, hey, we we appreciate what you're doing and

109we realize you're underpaid, but we need to take some sort of action if we possibly can. >> Well, we need to stop Well, you're exactly right. But how we do that is >> and it it can be a multi-year type and I mean different ideas like you're saying. I mean, like, you get to a certain point, you get a little bit higher raise. I don't know. You know, I do feel like that when you give everybody equal race across the board, that does kind of keep a RA where it needs to be, you know, but we need to do something to alleviate this instead of just talking about it. We need, you guys are smarter than us when it comes to all of this. You figure out something, some way that we can fix this

110and in a multi-year plan and we'll see where we can get the money to do. >> Well, yet we're being asked to do more with less. >> So, so that's what I was going to say. Like there's a bucket of money, right? >> That's right. >> Whether we get it from the state or the locality >> and you can have low insurance rates with not quite the raise. You can have the raise with with the insurance rates going up a little bit. And you can have support systems, right? You can have staff, you can have technology, you can have all that stuff. You can't have it all because it's like your own budget at home, right? You you are limited by what you have. So at the end of the day, the only way to

111fix it is either get more revenue, >> right, >> which is out of our control, >> which we can't control, >> or make some tough choices about the things we do. Perfect example is the Vcotta bus cameras. >> So if if we did one on every bus, it's about Jeff, don't don't kill me, but it's about $520,000. So if it's about a one year, >> what's that? A year a year for a lease. So, if that's if a raise is about $1.5 million by getting the bus cameras, it's like I told the principles, we got to make some choices here. Yes, it's going to make your life easier, but do we need it on every bus? So, I know Jeff and Kathy in transportation ran some numbers to see, okay, let's pick our high frequency

112buses that have a lot of discipline and see if we can do that. I think it came down tound and some odd thousand. >> That's smart. Yeah. So doing things of that nature, you know, everybody wants highest pay raise, no insurance rates, and still have all the supports and systems we have. But because we have no taxing authority, we have no control over the budget. >> And and barring safety being my number one concern. Obviously, we want everybody's kids to come home in the same condition that they came to school. And I think everybody's main concern is that. Barring that, the infrastructure and the gadgets don't educate the kids, right? And we all agree to that. And I would tell you this, it's my plan with Ben when we present the strategic plan as for

113one of our things is to be competitive with all the divisions around us for salary >> and that means that some of the choices we have to make where tough choices >> tough choices because we want to be able to compensate our people and >> people fix problems programs don't >> that's what our counterparts want us to do. you know, while they're spending when they're flush with cash when they're getting an extra 25 million a year on their side and and we're within the constraints of our 41% every year and now you reduce that. I don't know about what they haven't shared that with us, but maybe at some point they'll share that with us so we can decide how we do our budget. I mean, it's it's a lot harder for the school system.

114And no, I'm not going to kiss the rear ends. Uh, I'm going to call it like I see it. So, I mean, if we could sit down, if they could have a joint meeting with us, if they were kind enough to embrace us to have a joint meeting, I would tell it to their faces, but they won't do that. So, uh, this is the only method that that it can be done. And it's it's a shame. It's the one shining next to the star of Milville Mountain. we're going to have that in CTE. You know, having to fight for these things to make us a better county. It's frustrating and ridiculous. Um, but our people are what make and you know, I'm got five grandkids coming through. I am thankful for every one of these

115teachers. Um, but I'm telling you, it gets tougher and tougher every day to fight for you. and not because you're not worth it, but because you know beating our heads against the wall. So, thank you for the explanation. >> So, we try to work something out. I mean, I know it's like an overnight thing. You're not going to be able to present that next month, but over time we get to figure this out. >> Just go ahead. >> Oh, I'm sorry. Go I was going to say just just one more thing maybe to restate what I think Brent was pointing out too like um our raises aren't keeping up with cost of living in inflation. Um quick numbers that I looked at since 2020 to 2025 we've seen an average of 26% inflation and we're

116falling way behind on salary raises. So that definitely needs to be a priority that we are looking at how to close that gap. >> It's going to need a plan for sure. Good >> point. That ought to be the minimum, shouldn't it? At least cost of living. >> yeah. And then you're just maintaining, >> right? Right. >> Just at least that. >> So I just wanted for anyone who has not seen the bubble chart, the famous bubble chart. The left hand uh access going up and down is uh actually our average of the English and math so scores. uh going across the bottom uh is uh the per people's spending that is published by Virginia Department of Education. Um the size of the bubbles. So every school division is on this chart and the size

117of the the bubble itself is how big the school division is. Um so you can see the really huge one is going to be Fairfax and then we are up in the uh top lefthand corner. Uh this information is for uh fiscal year and school year 2024. Uh because Virginia Department of Education has not published the per people spending for 25 yet. That won't come out until April. So we can always um redo this chart in April time frame and bring it back to you at that time. >> Clarify some some division probably Fairfax I guess is what you were saying is spending about 27 27 and a half per student. $ 27.5,000 per student to educate them. And look where they're at. We're spending about $16,000 a student. And look at the results we're

118getting. Uh it's it's amazing. Again, we've got the best people in the world working in Roto County. >> It's amazing. >> All right. So, jump back here. Um so uh running the numbers um I did present a uh net raise a VRS offset and a a cost of a raise in the last work session. These numbers are going to be vastly different. And they're going to be vastly different because um the last one was presented with all employees as they exist today. And so we have had 55 people join the early retirement work program and several other folks um give their intent to leave. We have converted all of those positions back to midpoint. Um I think uh Mr. Bradshaw even saved a position or two in there um through his staffing uh exercises and

119um anyone who has been hired uh up through last Thursday, we got this last Thursday, um has been placed in their appropriate place. And so this is kind of our our best guess today of reality of what we will have next year. Um I think we still have a significant number of vacancies. Um, and those can go either way, right? So, it depends on who we hire. If we hire someone higher than midpoint, um, that'll cost more than what we have budgeted. If we hire someone lower, then um, that'll be a little bit of payroll lapse that we will save. Um, and just to remind everyone, it is also lower. And so, the net cost is the difference between what our budget is for the current year and what the budget would be under these

120new circumstances. Um, included in that is the reduction in the VRS rates. So, that was not a small amount of money to go from the the teacher rate being 14.21 to 12.2 and that is defined by Virginia retirement system through their actuarial process and that's what um all employees pay all school divisions. >> Are those percentages that is that include the step or is that over and above the step? >> That would include a step. >> That includes a step. Yes. So that is not a scale shift. That is the overall rates. >> So the top number is really a 0.4% raise above the step. >> Correct. >> Right. Correct. >> M. Can I say something? The scale shift is what's going to get us out of that concern we talked about where you see

121the 15year thing. If you can start teachers hiring, shift your scale. I agree that 1.6. we shift the scale, that's truly what's going to help us down the road. So, if we can shift the scale by I'm at 34%. That's a huge scale shift which will help that 15year average, Mr. >> So, you're saying that'll bring that middle the middle years more. >> It will absolutely help that. It's not going to make us number one. >> No, I get it. Those scale shifts are what makes a difference. Um, in the crossover budgets, the House did put forth a 2% raise in each year of the bianium and the Senate put into their budget 1% over that. So, they have 3% in their budget numbers for the benium. Also uh I had mentioned this before but

122in the caboose uh budget which is the current year budget uh there is a bonus planned uh this has been tweaked a little bit by uh the general assembly. Um from what I have been able to gather uh employees that exist as of 6126 uh would be qualified for it. Uh the minimum average is 1500 bonus or an equivalent action and by equivalent action would be um if we could give a raise that would be an average of 1500 um for everyone. Uh so this is flexible in the amount and it's flexible in the type of compensation. So we could you know if we did the 2% if we were required a 2% raise and we did a 4% raise the caboose bonus money could help us get there. Now keep in mind this is

123onetime money so that is always disconcerting to think in that method. Um there is also a a local match required. Um and we can pay it in FY26 or in FY27. Um so if we just took so when I provided the raise numbers we used a we had a FTE of 23 24 positions that were on that list provided to us from TM sources. Uh the total cost of a 1500 bonus would be 3.7 million. The amount of money that's in the calc tool is based off of ADM and so that ends up being 1.5 million. So, our local share if we gave that to everybody, now keep in mind they don't say give it to everybody, but I've never seen an instance where we've not done that. And so, um, our local cost would

124end up being 2.2 million. >> Now, this is what it's >> Yeah, it's based on the SQ. So, we have a lot of >> we have more. So, we would have >> because you can't operate a school. >> We would have to make up the call. Is that what we're saying? Yes. I'm trying to remember from last year, >> but your number includes that >> or no, >> my number will be every employee gets in. >> Yeah. The cost number. Yeah. >> Yeah. Um and one thing when we get to the the house budget, uh there is a mechanism in which we could cover this if we pay for it next year and cover this and cover a couple other um items. So we we will go ahead and take a look at the state

125revenue. >> We take a break for just a little bit. I think we're two hours in at this point. You guys good with that? Hey, hey, hey. Down. Hey, hey, hey. Hey. Hey. Down down down. Down. Hey. Hey. Down. I'd like to call our getting back to order. Let you proceed. >> All right, we will move into the state revenue update. Um, and I've got kind of a high level of what we're seeing at the the House and Senate. Uh, and then, uh, numbers from the House. Uh, so at the House, uh, they have the $1,500 bonus, uh, that we talked about, uh, the 2% salary increase that we talked about. They also put in put in um place a one-time uh supplement that's a flexible supplement. Uh they will pay it in 27 and

126we can carry over any unused amounts to 28. So when we look at the numbers that is a one time only money I put it into grant fund and in the back of my mind I'm thinking that can be used for the bonus. It can be used for health insurance reserves. it can be used for these other one-time needs. It's very flexible in what we can and what to use it on. Um it's but it it ends up being about 4 million for us. So, I'll show that to you later. Um they also have additional funding that they're putting uh towards the SINA program for additional students and it's my understanding that that will also help with some of the CSA uh programs as well. We're hoping to try and infuse some additional funding there.

127>> That's the intention. I'm not really sure if it actually will. Dr. Ar, is that right? >> So, so basically what I understand in talking to delegate school is trying to get that through to where they open up more eligibility to more kids to receive system funds. >> That's the key part, >> right? That's the key part. Um there is uh an additional expansion of at risk uh add-on to address some findings from JARK. Um additional fund funding for school construction. The authorization of the 1% local option for uh the school construction so the uh localities could put it on their uh ticket to vote for the voter referendum to uh charge an extra 1% for school construction. and then uh redirecting some of the literary fund loan uh money that's being that's not being

128uh applied for uh to teacher retirement costs that will help all the schools. And then at the Senate, they are they have the $1,500 bonus included in their recommendation. Uh they have a 3% salary increase instead of 2%. Uh they are recommending increasing the atrisisk add-on piece. um increasing the per pupil funding for infrastructure and operations piece, a K12 sales tax adjustment, uh special education add-on, breakfast reimbursements, the ref bond, uh voter referendum for the 1% optional sales tax like uh the house, and then additional funding for school construction. So, uh, this next slide, uh, you've already seen the 2026 budget and the governor number. Uh, we did add the third section in here for the House Bill 30, uh, because we were able to find the worksheet. And just to remind you, um, the

129Virginia Department of Education publishes a calculator tool after the governor's budget. Several years ago, they stopped doing that at crossover. And so when crossover occurs, which it did occur on Sunday, uh that means both the Senate and House are kind of done with their budget bills. They've approved them. Now they hand them over to the opposite side. Uh so in what they published in their report on Sunday, the House had a by division breakout of the impacts. So we were able to find our numbers in that worksheet. The Senate did not include a by division worksheet and I would never take it upon myself to try and figure out how to uh take it from the state level down to um just little county public schools. Uh so we've got to wait and uh hopefully

130they'll publish a worksheet uh soon. Um otherwise then uh we just have the house bill to uh look at. And what we've done in the history is whichever gives us the less money is what we start to build our budget off of because that is the conservative approach and we'd rather be in a position to add back money if they uh come to a an agreement in the middle and give us more money. We'd rather add money back because that's much better than trying to take it away. So in the general fund um over the the variance is over the budget not over the governor's budget. So, it's over the current year budget. Um, it went up a little bit more than what the governor had proposed. Uh, 8.7 million additional funds uh for the

131school division. Um, in the instructional resources fund, so this is just a text line item. Um, just an extra 68,000. And in the grant fund, part of the four million um and the majority of that four million relates to the one-time um flexible funding that they're giving to all the school divisions. So, if that came down the pike, that could be very helpful for the like I said, the bonus um maybe health reserves. You know, if we don't use it for that, maybe we could use it to uh buy school buses. It would just be onetime money, though. So, that's why I wanted to keep it. and the grant fund. So, we did not co-mingle these one-time monies with our operating money and what we look at for given raises. So, then looking into the

132county revenue, we do have a revenue sharing agreement uh with the county. The first step is to take a look at ADM and population. Um, and I've got all the calculations in here, and I'm not going to sit here and read through the calculations. Um, I will say that, uh, the little letters kind of show how the math works. So, you can work through the math, but the first part is to calculate the three-year average between ADM and and pop the population. And they do this on a rolling average, and they uh uh take the difference of that. Uh then they run that through the net allocation change and come up with uh using the payroll factor um in the the three-year average factor and come up with our uh change to the net allocation.

133Um so that looks like it's going to be.99 and all of this comes directly from the county. This is um a draft that we have in hand. uh they always preference uh what they provide to us is always subject to their continued budgeting process of um reestimating their revenues. And so then you come down and the third part is uh they have a whole separate spreadsheet where they identify the very specific uh taxes, property, real estate um and various other taxes that that are going to be shared. uh they reduce the comprehensive services act some um payments to Renick Valley convention and visitor bureaus and economic development incentives come up with the number that they're going to apply our percentage to and then they apply it to uh the base and the net in increase

134of money. Uh so for next year in this formula our main transfer increase uh is originally drafted it was about $3.9 uh million at this time. I always add on here whatever is set aside for the uh CSA because they transfer us the money to us and then take it back. Um, so just so that I have the budget in there for when they take it back, I go ahead and add it in here. It is a zero net effect for us because they do it after the the transfer. So then, uh, the next chart I wanted to share kind of a a history of our transfer from 2017 through what we're budgeting at. Um what this shows not only just the history of the transfer from the county uh which is in the big

135purple shaded area above that is the little brown shaded area that is the CSA costs. So you can see where where that started to um rise up in more recent years. The bars at the bottom, the red, they stack because they are required um effort as required by Virginia Department of Ed of Education. And so the red line is required local effort and the green on top of that is where we have kind of funds that have require local match. So these are uh counted differently. the matches typically on special funding lottery funds and then the required local effort is on SOQ. And so you can see where the county has historically provided more funding than what SOQ um has required uh by BDOE. Um, but we do have a great school division because we

136are able to spend that money appropriately and and um even given that uh based off of our earlier conversations, uh we do acknowledge that our um scales aren't where we need them to be for attracting uh more teachers and and treating our teachers right. >> This add three points real quickly based on the funding formula and what you see right here. one um our ADM our enrollment is factored into the formula. So the and our enrollment as a percentage of the overall county population that's built into the formula to have some sort of you know fairness and equity in terms of how many students are being served. It's built in uh employee numbers that's built in and it's kind of a proxy for our needs. I mean we you know staff our schools based on

137what the needs are. those staffing guidelines have not, you know, they've not gotten uh, you know, looser over the years based on our decline in enrollment. Uh, you know, we don't suddenly put only 10 kids in a kindergarten class, you know, versus 18 or those guidelines have remained consistent over time. Our students are spread over 27 schools across a donut of a geography but based you know chopped up by mountains and all kinds of other geography that does not make you know contiguous um attendance boundaries uh easy to do or desirable to do you know for the the citizens of um of RU County. And so um and then you go back to the bubble chart earlier in terms of our per pupil spending uh we stack up pretty well. I think we're pretty frugal

138and good stewards of taxpayer resources uh you know to get the bang for the buck that we do. So just want to point out those those three things. Very grateful for the funding that we have. Um but if we were to only do minimum funding based on LCI uh there's no way that we could educate the students of Renault County, you know, certainly at a adequate level, much less at the level that we do. >> Thank you. And Susan, you said our carryover from last year, what we had left was4,544. Is that right? The transfer base >> for health insurance. >> No, like what? >> Our end of year surplus. Yes. Some operating. >> Oh gosh, I don't remember. Probably about that because I think we didn't we put about 800,000 in CSA, about 800,000

139in minor capital, and 1.6 in um major capital. >> Okay. And then we had the two million carrier that we always keep for emergency. So all of that added up. >> Just kind of doing the math in my head. That's >> um so now I would like to go ahead and shift gears and move uh back to our priority list. Like I said, um I've changed the priority list a little bit to make it more streamlined for uh your review and consideration going forward uh to be able to reference. Um anything in yellow has changed um from what we've uh had before. Um and some items administration had looked at have cut dropped off if they uh went back and did some more research or um were able to fund maybe a position um with

140their own coffers or or found other ways to resolve what they needed. Um or departments have taken a look at this and sharpen their pencils a little bit. Uh so the state revenue um I should have highlighted that number because that did change uh a little bit. uh the revenue county sharing agreement of 3.8 which is subject to change. Um the two next two items are in green because uh they are added in because they are money that does come in but it also goes right back out as a similar expenditure. It's just a flow through but to get the budget where it needs to be we added and so that we can have the transfer uh balance to pay out. Uh so the first one is the CSA costs are going up a half

141million and the second are church revenues. We had a uh we have not increased our revenue for the uh church at Valley High School and per our policy uh the host school retains a portion and then we allocate the rest out to all of the non-host schools quarterly. um non-resident tuition is realizing uh without changing anything about the fee just how many students are um choosing to pay the tuition to come to us. Uh we are seeing the revenue come in higher so we want to increase that a little bit and then fingerprinting fees uh that uh could come up a little bit based on what we're seeing. So about 32.2 2 million um is a preliminary uh first look at uh what our revenue could possibly be. So then uh we'll just quickly go

142through each of the uh departments and the human resources department. Um the health insurance I think this number is not the same as the any of the ones that we have back in the earlier slides because I think I didn't get a chance to get down here and change this. But whatever we decide um the general fund will um cover if we end up doing the 10% premium um then that would be the amount we would have in here. Uh the employee raise would be to be determined. I know that is a high priority um that uh we would like to do as much as we possibly can. Um there's a large number in here for EEWP. That stands for early ret early employee work program. Um we just had uh 55 more people added

143uh more than what came off of the program and a lot of higher dollar uh folks joining the program. And so a couple assistant superintendent um we've had seven bookkeepers added. Uh, so we are going to be interviewing for bookkeepers in the near future. So anyone who is watching, I should not be putting a plug. I apologize for that. But we need wonderful bookkeepers. >> Sorry about that. Um, but they I mean we've just have a lot of, uh, high dollar folks that have turned over and so, uh, for them to pay their to get paid for their days, that's that. I apologize for that. I should not have gone off wheels. Um, >> perfectly fine. So, uh, with each of these, I did take out, um, since I've already shared how they relate to

144our strategic plan, I did take that out to streamline them. And we did add the tiers so that you could see a tier one would be uh, what has uh, been defined as really we want this. Uh, tier two is we would really really like it, but it's not. We really need it. at tier three is it'd be nice and we want it but it's not as important as a two or a one. So that just kind of gives you an idea of um our scheduling and I just put it in here. It's not that one is higher than other. I put it in here in reverse order from largest to smallest by tier. Uh so in administration um the church revenue is added in here because they are the ones who uh that whole

145program runs through. So that is a all the money comes in goes out to our schools. No changes for school counseling. Um the only change with special ed and you won't see it in here is that Dr. Harmon found uh some ways to be able to cover some of the positions that she was asking for. Um elementary education um I forgot to highlight it but uh the request for the assistant principles uh came down to one FTE and so we've got one um that dollar amount and I forgot to highlight that so I apologize. So basically given one would allow us to have at least a part-time assistant principal at every school. >> That's pretty much what we would be. >> The original request had three of them. >> Request was three. >> So they

146could just split up however the parttime hours. >> Yeah. So basically it would allow like Mason's Cove it would give them a day or a couple days with the part-time person shared with a different school. Kim's gone. I can't remember the plan. Then like Clearbook would go from a part-time to a full-time and it's all based on enrollment and um staff. >> So Clearbook shares with Bat Creek. >> Yeah. >> So how would that work? >> I'm sorry. >> What's that? >> So how would that work? Right now they have a >> So probably Mount Pleasant and um I was guessing High Creek would share and then you could share basis. >> That would make more sense. >> Yeah. You're not necessarily going to share with the same people. So Kim has a plan based

147off of that, but I told her three is unrealistic, >> but I'm hoping it's better. It's it'll be better than what we're doing now. >> Yes. Every building will at least have a part-time AP or a shared AP, I guess I should say. Not part-time, shared, which will allow like Mason Coinc meetings and still have somebody there for discipline and things of that nature. those out. >> So we fill that with how would we fill that? Like we already have staff to do that. >> We would hire one. >> So we'd have to hire somebody that would be willing to work part time to do that. >> No, they're just sharing their time, >> right? >> Gotcha. >> Uh no changes for the secondary construction. Um except yeah I'm going to change you um the

148assessment research we uh reduced from three gifted and I'm sorry some of these I forgot to highlight um reduced it from three gifted uh teachers to one uh CTE I think the only thing here we uh remove the adult ed part-time um coordinator until we can get the programs in place to uh that would require us to have in the build dead. Uh no changes for facilities and operations. And then under finance, I've added the 518,000 uh OPED contribution and then the CSA uh expending that goes with their revenue. The other thing I took off, if you recall, um I had the reduction in the transfer to the health insurance fund. And so depending on what we do with that, um I took it off just to leave it in the other slide. Um and

149under technology we did add um we are under uh higher requirements uh to meet uh accessibility uh rules that are new and this is going to expand down to um our teachers and content that is on Canvas. And so our staff has gone gone out and found uh this software that will help our teachers make all the content on Canvas accessible to um everyone as they need it. Uh so that is one new item that's on this list. That's the city labs. Uh the other one that's on here I I put a asterk by the bicotta cameras. Um, and so, uh, the original request was 526 and, uh, that could go down to even as low as a h 100,000 a year, uh, depending on how many buses we would put that on. >> Not

150the leader at this point, but this is an example where, you know, when you get the technology, you become dependent on it and so the renewals are stuck there, right? >> Right. Because it's a yearly. So those are the things like if we wanted to try to increase raises, we got to look at what are the absolute necessities we have to have to operate versus what are some luxuries. So like the bakata bus cameras, that's where we talked about the 526,000 cutting it down. Middle school bait detectors. I mean that's that's just a choice on where we're going to have to decide because that's money we can put towards raises. >> Well, that brings a good point back to your last slide with facilities and operations. I know that's something that Todd does a great

151job at. We got to make sure that we fund him and I know that, you know, the buildings are aging and stuff like that. So, um, >> I'm hoping that we're giving you enough money to take care of what you need to take care of. >> Well, it's like you said, >> is there ever enough, >> right? But, but I just wanted to be known that that is a concern. I mean, I know that >> he does spend a lot of money out of his own budget, >> but like these twos down here, he's gonna have to eat it out of his own budget. I mean, HVAC pricing. >> Well, a fire extinguisher is Why is that a two? Should that not be a one just >> Well, because we I sat with Todd and

152did this and with Dr. Nicely and a two means it's going to get done. He's just going to have to take it out of some of his other >> budget because I would think that would be like high pro just >> Yeah. I mean, I just see things that are in necessities, but you know, there's really not a lot of padding there and we got to keep that in mind, too. I think that while it's nice to take on some extra things, new things, it's a priority to make sure that he's funded well. So, just making that statement. >> Y Well, the reality is these are all tough choices and on the revenue side, we anticipate not getting all the revenue that we were >> we thought we were going to get. >> Right. Right.

153We anticipate a significant reduction >> on the local funding >> from what you're showing us today. >> Yes. It could it could go down by as much as I think >> two $22 million less possibly. >> So in that situation like before is that where we come up with what we what we're definitely funding and then there's things that we would like to fund but we won't only do those if we have the money to do them. Is that kind of what we did before? >> A tier one tier two. and then the way I'd like to do it is moving forward if it's a tier two we would leave it on the list and >> but we would wait to see if we have the funding >> yeah and then for the next year

154that tier two >> do we have the money to do all of the tier ones >> what's that tier ones are are mainly like we'd have to cut fun to get rid of some of the tier ones like we have to do the contract >> I'm just asking about like in terms of what we have coming in and what we have going out can we afford all of the tier ones as well >> well I don't know depends on what the county cuts uses >> I mean based on where we are right now >> right now what the that are in there. I think if I remember my spreadsheet right, we had about a million dollars left over to apply towards Pier two after we took care of. >> So, right now we would be

155okay, but we don't know what >> but we don't think we're going to get >> So then we would be potentially cutting into tier one. That's what I'm getting at. I'm trying to Okay, >> but then >> possibly >> raises that would affect how much we're able to get to the raise. I don't know what you have in here for >> Oh, I think I have TV. It just says TBD. So that's not even >> it's not even in that's not even in my one million. So I I take that back. >> So >> yeah. >> Sorry. >> No, I mean that's >> my formula just added up the numbers. I'm sorry. >> Well, I mean that's something we have to think about though. >> It is 100%. >> Because that's going to take away

156from depending on what we choose to do >> which could significantly impact the ability of the division to offset the employees cost and the health insurance. >> Right. All of that. Is that right? I know. So when do we think what that we might get some more information in terms of local funding? We we don't have any indication. >> They have a work session tonight. So my guess would be something may come out after that work session. My guess um so then That's really all I have. Um because we talked about the technology and then I >> school board didn't change and then the bubble chart and remaining. So So we we are presenting this. We're adopting it. Okay. I see it 31st. >> We have a we we've got a month. I say a

157lot of time here. >> A lot of time. Yeah. Well, we also have so many unknowns. So, we have a a budget work session scheduled for March 11th um and we're hoping to have enough information um to be able to provide a a final recommendation, but um if we need to, we also have a tentative work session set up for the 30th as well. So, whatever we need to to do to get you what you need so that you can um be comfortable Okay. >> Do we have any other questions or comments? >> Thank gentlemen for coming and speaking to us about all the insurance >> saying through all of this. >> I know you have a tough subject and you know and not necessarily it's not your fault. It's just you're the bearer of

158the news we don't want to hear, right? So >> completely. >> We appreciate your your work and your continued work to try to help us get through this. >> Thank you. and Susan, thank you for putting all these numbers and presentations together. >> Thank you. All right. Meeting adjourned.