001Right. [Music] Is it this one? Yeah, it's the USBC. Oh, that one actually can do. I will state for the record because we didn't have to do that. Well, we should have back on it. We should have done a pro. Um yeah, I [Music] know Jane and Carol, are you ready? I'm back. Am I ready? Have to get ice for my knee. All right. At this point, Kirley, everybody can hear everything you say going forward. Say say hi to Jane and Kiri, everybody. So board, at this time we'd like to open our meeting with a pledge of allegiance. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. wanted to uh welcome all of
002you joining us in person and those of you joining us online. Uh we have two board members uh Director Pushkar and Treasure Owens who are joining us online um through the means that we're allowed to do uh to make sure um directors are possible to be here through uh virtual means. So I like to have a motion to approve the agenda for May 28th, 2025 as presented. So second motion with Mark, second with Ron. All those in favor say I. I. All those opposed say no. Motion passes. We have a motion to approve the employee insurance recommendation as presented. Motion. Motion by Mark Ponder and seconded by Jane Pushkar. At this time, I'd like to welcome Chief Finance and Operations Officer Carol Embry to present. [Music] Good evening board. Thank you very much for this
003opportunity. I appreciate you investing more volunteer hours this month to address this important action. So I will jump into this presentation. I want to identify first that documents have been posted in advance of the meeting uh for public consumption for your consumption to pre-eread and also want to express appreciation for uh Vice President Grder and Director Ponder who participated during the insurance committee meeting last night and uh much of what is included within this presentation was provided to all committee members last night and then there are additional slides that replicate some of the information that we presented a year ago with the uh health renewal and then some additional information for your context as you uh consider the recommendations. So we uh covered the total census of employees and at the time of this data
004it was 4,425. I highlighted for the group that we currently do a passive enrollment for our benefits and for all of our employees and retirees and covert participants. we will need to move toward an active enrollment uh not this coming enrollment cycle but the next one because we're uh required to make a change to our provider the smart bin software that we use will no longer be available to us and so we'll need to bid that and we'll have a new enrollment process so just putting that on your radar that that will be uh information that will occur or a change in process that will occur. I provided this for context about our current year estimate on premiums that are going into the health fund. And as you can see, the district uh is providing
005approximately 79% of all premiums that are going into the health fund. The remainder is funded by employee paid dependent care coverage at 12.73% and then retirey and covert premiums as well. And uh that total is 30,357,929. As you well know, we have additionally transferred by your approval $6 million from the operating fund into the health fund to uh provide a balance for the claims that have been uh at a higher demand this year. This provides the summary of the actual expenditures from the 23 24 year. And as you can see, the district um splits this into uh claims and prescription claims, that type of thing, stop-loss premiums, all the administrative fees. We then deduct from those expenditures our stop-loss reimbursements and rebates that we receive from pharmaceuticals. So, the net impact overall was just under
006$31 million in expenditures. But this slide shows that our revenue uh for last year was 26,239 and the net operation then for the year was negative4,754031. This does not include our health savings account contributions that in the current year total $1.7 million. Uh that would be an addition to those costs. You are quite familiar with this slide that provides you the buckets of funding. And so our operating funds uh the operating levy can go into general, teacher and capital, but the operating funds are considered general and teacher. And so any decision that is made relative to benefits and the amount that the district contributes to those benefits will impact any future salary negotiations or staffing uh decisions or other operational costs that need to be uh absorbed by the district. So keeping that in mind
007as we journey forward. This is the familiar slide for you as well. This was all presented to the insurance committee membership so that they had context too uh regarding our operating fund balance trajectory that something needs to be done in the next uh couple of years to address the downward trend and reduce operating costs or increase operating revenues. Those are the two primary functions. Again, any impact to benefits will uh impact this line as well. This is that reminder slide two and a reminder once more about the $6 million transfer and that we are continuing to run short in our balance for the self- insurance fund uh in spite of the $6 million transfer. And so I do have a recommendation for you at the end of this presentation to help address that in some
008fashion. But when we compare year-over-year, we are currently $2.6 $6 million below the fund balance uh from July through April the prior year with the 6 million added in. So uh I did uh engage with Marsh McClennon agency representatives and one of the things that was important is for me was that we be able to identify for you some of the plan anomalies uh that are evident and so I have those summarized here for you. Uh the first one being that excuse me the district contributes varying amounts per employee. So we have disparit uh allocations being provided. Portions of dependent care premiums are paid by the district and some of those are uh higher than others and we'll take a look also at how we compare to other districts. So, the uh district health savings
009account contribution uh not only does the district provide $1,000 for employee only registrants in in the high deductible health plan, but we're also paying $2,000 total or an additional 1,000 if anyone is enrolled in dependent uh coverage as well. So, those people are receiving a disparit amount and that's an unusual benefit that is provided uh to employees. uh the funds are paid outside of uh the health fund so they are impacting operating funds directly. That's an unusual behavior. Usually the amount is the difference between the base plan and the high deductible health plan and that difference is what is paid to the employee uh as an amount. So, that amount would currently be limited to $780 a year, and most districts uh and other entities provided on a month-to-month basis and not all at one
010time because people separating prior to September 30 are overpaid, including retirees. So, I mentioned typically that uh dependents do not uh cause an employee to receive additional funds. The last item is that the district embedded uh highdeductible health plan embedded plan deductible. We're administering two plans. It should be one. Uh and uh through the proposed design uh of the plan for the upcoming year that has been addressed and corrected. This shows uh varying uh plan contributions. The teacher example. So the first on the left is um representing uh a teacher making 67,618. As you can see, if they're on the base plan employee only, they end up with a total uh gross plus benefits package of 89,133. If they participate in the family coverage due to the district's contribution to dependent uh premiums, they have
011a total compensation package of 97,640. So, they receive an additional 8,506. That's 9.54% more than the person on the base plan. On the right side is that same information only that represents the high deductible health plan. The gap becomes larger. Uh 89 385 if they are on the uh the high deductible plan. Uh, and then 101, I'm sorry, base plan and 101,448 if they are on the uh, high deductible family coverage plan because they also get that additional $1,000. So overall, they end up with 12,062 more than their counterpart teacher and that's a 13.5% uh, increase for that employee situation. This slide, I changed it to say support employee. It was labeled PAR before for the meeting last night. That created a little confusion uh just because the amount that we had identified was 32,509.
012This is a support personnel employee making 22.91 an hour and as you can see it's the same scenario only in this uh regard because the gross pay is lower the percentage gap is greater. So, uh, the person who is on family coverage as compared to base for the, um, the PO plan, it's 17.99% higher. And if they're on the high deductible health plan for family versus employee only coverage, they receive 25.38% more in compensation on an annual basis from the district. This references that high uh, health savings account contribution. And so what we identified for you here is that we have $629,000 approximately. That's the amount being paid this year for dependent coverage. That additional amount that's above and beyond what others may be paying. Um and I referenced before the separation piece. So anyone
013who leaves prior to September 30, whether they retire or whether they just sever employment because they have a different job opportunity, uh they as soon as they leave, then it creates this gap in terms of what was owed to them. And we pay it all at one time in one check in October. And so we do have people that might sever the very next week. And that means they keep that money even though it's really uh contributions that should have been spread out through September 30. Uh levers to impact district costs. I've noted for you just some of those opportunities. Wellness efforts always uh focusing on improving health are a great option. Plan design changes are a a regular uh focus because they don't affect uh individual costs on a monthly basis necessarily. Uh it's
014mostly focused on the user. Then reducing or eliminating the dependent contributions by the district, changing that HSA contribution to represent the gap from the base to the high deductible plan. Uh the embedded HSA contribution with health fund piece. Again, that would be a lowhanging fruit thing that won't really help us from a dollar's perspective. It would just be a corrective measure. And then reducing or or eliminating uh that contribution or dependence. Um employees pay a portion of employee only costs would be another option for us. Currently, the district pays 100% of all employees for their employeeonly insurance. This this slide and the next one are corrective slides. During the April 17th meeting, I had provided you information relative to stop-loss coverage and how it was calculated. And this uh better depicts that. So that's correcting
015the information previously provided. And same way with this historical renewal perspective, as you can see, our renewals in the past have been very low. 2019 2% 2%. I covered all this in the April meeting. I did have an error on the uh 2021 line. I had 5.7% and it should be 4% for the district uh portion of that. So again, our renewals have been significantly low and um that's not where we are today as you know. So then this information I'll go through very quickly. I'll pause on one slide mainly. This is the information that Marsh McClennon presented uh yesterday evening for the insurance committee. I will highlight though that uh the forecast was previously 20.7. It did increase to 22.7 using the April 2025 data and it the numbers are always moving. We were
016hopeful they would go down and not go up but they did go up. So, but all of the forecasts uh were uh delivered based on that 20.7%. So I mainly want to focus on this. Uh this was presented during the May 6 meeting in terms of the plan design options, the levers that could be pushed and pulled to uh reduce the cost demand on the district budget and also potentially for employees. And so you can see that for our in network deductible or out of network deductible, we're seeing some slight movements on those. And all of that is listed in red if you're able to uh actually pull that up on your screen to see it better. It's pretty tiny print, but we did cover this all with the uh employee insurance committee group. Uh
017the next slide uh shows you the premium equivalence. Again, this was based on uh the uh 12.8%. Also, uh we've updated this to reflect the new information on vision data. Uh that's in another slide. This was a 10% budget model. So again, whenever we start talking about this, we were at 8%, we suggested to Marshia McClennon, we'll go ahead and increase it to 10% so that it can be a tolerable effect on the plan design and on other uh changes that would be necessary. So they did that work and that was I believe that was um provided following the May 6th meeting and then uh again for the high deductible health plan. Then this moves us to model two with the 12.8% budgetary impact to the district for active cont contributions and that's the base
018plan data and the high deductible health plan. So we'll look a little closer at some of this information. Again, it's all posted online. We did review this uh during the May 6th uh meeting of the insurance committee and then reviewed it again during the u May 27th meeting just to show how we compare from a benchmarking perspective for both our PO plan and then our high deductible health plan and HSA plans as well. Marsh McClennon did provide information and I should mention that uh those gentlemen are here this evening in the event you have any questions for us but they provided information relative to the request for proposals that were issued. We have mandatory uh bidding requirements and they help us stay compliant with that. Uh we have vision uh vision recommendation and then life
019disability recommendations. So that and that's really tiny that information was provided and there's the life and disability information vision proposals that information. This is the actual recommendation for uh dental that we would renew with Delta Dental as is no plan design changes. It is a 6.3% increase to the rates. The dental portion of our health plan is very minimal relative to the medical piece and so it's minimal impact. For vision, the recommendation is to move from IMED to NVA. I believe that's National Vision Administration or something like that. Uh does provide improved benefits. It's a 17.5% savings which is approximately 70,000 per year. And then for life and disability, the committee received information regarding that process and the recommendation, excuse me, to renew with the incumbent Lincoln Financial Group. Uh, no plan changes and no
020rate changes on life and disability. So, this is new information relative to the recommendation that was not presented to the insurance committee and some of it uh again replicates that which was provided a year ago. The first one being that we are regulated by board regulation 4540 GE when it comes to how we address health insurance. I've highlighted that middle sentence for you. Excuse me. That middle sentence for you. Uh this is a unique thing in our district. Uh there there isn't right and wrong. It's just different and it creates some unique challenges. But employees may uh receive this bucket allocation if you will of uh funds that they can then attribute to any combination to medical, dental, and vision coverage for self, spouse, and or children. So any of those options, they can um
021piece and parcel it together. And so the thing that that does, I'm sure it creates a massive uh calculation challenge for Marsh Mlennon representatives. It also makes it challenging for us when we're looking at data because people can move around all the time and uh it changes the calculations. This reminds us of the services that Marshia Mlennon agency provides for us. I referenced already the uh the proposal process and then u gathering benchmarking data benchmarking data and uh providing us the data necessary to make recommendations on our insurance fund. This reminds us that we are self-insured, but we also have fully insured uh plan for vision. And so the self-insured covers medical and dental. Just lists some of the differences between the two. And this is some updated census data. It didn't change by much,
022but just providing you that understanding of how many people are enrolled in each of the uh types of coverage. So you can see uh of the 500 5,903 total, we have uh 3304 that are employee only. And again, the district pays for all of those coverages. Uh employee plus spouse 336, employee plus child, 1376, and employee plus family. Additionally, we have retiree and COBRA enrollments uh of 718. Uh so I'm sharing with you you know we had a unique year where we didn't have our typical January uh March, April and May meetings for the insurance committee. But what occurred instead was significant engagements through email communications and providing data to the committee members. and how I handled that. We we have these different dates where communications occurred including keeping them apprised of the actions of
023the board relative to changing policy and regulation 0360 and also um the approval of the bylaws and then the final approval of the committee membership and uh originally I was providing the communications to those who served previously on the insurance committee and then as soon as those members were identified then communications were provided to all the new members. ers uh for the committee. So the committee actually met May 6th and May 27th. One of the pieces of information that I had emailed included this comparison for district contribution percentage. And I'd like for you to train your eye to that low box and that shows us the employee and family base plan coverage. And so what you can see represented here, we did pull it down so it would be larger on this slide. This represents
024St. Charles County districts. So the five districts in St. Charles County, Francis House, Zumalt, Wesville, St. Charles, and Orchard Farm. And as you can see, Francis House is listed first there. And when you look at the percentage paid by the employee for the total cost for that uh plan, for family plan, the employee pays 32% and the district is paying 68% of the total premium for the employee plus family plan. If you uh train your eye to go to the right, you can see that for Zumalt uh as compared to our 68% that the district funds, they are paying 35%, Wville's paying 36%, St. Charles 56%, and Orchard Farm 35%. I will tell you that uh when we had some other additional districts in the area that aren't St. Charles County. There are a couple
025of larger like Park Parkway I believe is one that pays higher uh and um Patentville pays an additional amount as well. So that gives you some context. And then uh this is the same information but it is for the high deductible health plan. Again the district is showing at 83% of um the total cost for the family plan to be funded by the district. other districts. Zumalt does not provide one. Uh based on the information provided us, uh Wsville is 35%, St. Charles 55% and Orchard Farm 39%. So the district um Francis Health School District is paying a significantly higher dependent care coverage uh premium for our employees enrolled enrolling independent uh coverage. So these next slides, I I won't belabor all of these. They're all posted for you. It basically just shows the premiums
026and the splits. A reminder again that the district pays 100% of the employeeonly cost for insurance. All of these premium calculations were based on a 12.8% uh target for the district budget impact. And that also included not only those plan design changes that I referenced previously, but it included freezing the premium the dependent care premium payments by the district so that while other costs were rising, those would not go up and that would shift more of those costs to the employee who have dependent enrolled uh for them. So that's employee only. So remember that we had a 68 uh percent. I'll show you when we get to the family here. uh we took the Marsh McClennon data that was provided and added those charts to the the four columns to the right to just uh
027summarize that in total. And as you can see once again we had 68% on the last slide and this is showing 68.1. So we have it um uh truncating off past the decimal point there on the previous slide. So you can see that the district paid a 68.1 with a 12.8% 8% renewal. That would take the district paid portion down to uh 63.3%. In the middle box, that's the change and uh that's the new plan. And then the last box in orange represents the change and it's showing that we would be reducing the district funded portion of premiums by 4.8%. So again, that highlights all the different plans. All of this information is posted in a separate PDF. And so I want to now focus your attention on some of the costs that uh this
028brings to the district for your consideration. So each percentage of increased district health insurance costs approximately $300,000 annually. So if it's 8% 8 time 300,000. if it's 10% 10 times 300,000. The budget allocation estimate for FY26 is currently at eight. And so down below you can see that we have um that information in that chart. I'm showing you a 1% increase health with taxation. And the taxation is that we pay retirement on any health contribution uh that we're making. not on the dependent piece of it, but on on the employee only side. The um the next line shows you the current budget that has the 8% increased health with taxation of 2,278 483. For the employee insurance committee on May 27th, we were focusing on a 12.8% 8% increased health with taxation and that would
029result in a 3,645,573 increase to the budget over current year. And I also am showing you the increase over the current budget estimate in that far right column. So, um, and and when I say budget, we've been in process of developing the budget, but you know that each month we're providing you with the operating trajectory, and that embeds some of these assumptions that I'm referencing. Then the last line, I'm showing what it would look like if it was a 14% increase, and that's just under $4 million annually of increased costs for the health fund. So, uh, 3.987, that would be another 1.7 million over what we currently have in the budget estimate. So taking you back to the employee insurance committee in the process. Uh facilitator Jim Reeves joined us for the meeting yesterday evening
030and guided the discussion. He uh helped ensure that all questions were asked and answered requested that as people had questions or observations or concerns that they also provided possible solutions. And um members did express concern with the cost increase that will be placed upon employees and particularly those with family coverage or other dependent coverages, but especially family coverage and especially for support staff making less money and uh the solution offered was that the district absorb all increases to the costs. Uh members noted that they would like to revisit freezing the dependent contribution each year and it not be something that is uh assumed as being uh the way it will be. Members expressed frustration in the lack of meetings to discuss options and again I remind you that information was being provided. We didn't have
031physical meetings for that but the information was provided and then members uh reach consensus that they are not pleased with the options and defer to administration to make the recommendation to the board of education. I should have added on that slide that that's relative to the medical because this next slide does show you that they did reach consensus on the full uh offerings that Marsh McClennon provided relative to the Delta Dental the vision uh from IMED to National Vision Administration and Life Disability to renew with Lincoln Financial Group. So they reached con consensus on that and that is part of the recommendation to you this evening. So, in um in taking a look at our use of operating funds, I I want to make sure that I've said this enough times into adnauseium that every
032dollar that is spent relative to the health fund is a dollar that cannot be spent on future salary negotiations. It cannot be spent on future utility increases. It cannot be spent on other staffing needs that might be identified in the district. Having said that, we also know that uh I've kept you apprised about the state adequacy target uh movement uh through the the budget process and it was included in the budget. We've shared that. We also have shared that the governor has the ability to line item veto uh at this juncture. I do not have any new information that that that's been signed or not. The governor has until June 30 to sign it. Then the next step will be to wait and watch and see if it's fully funded. So, uh, whether or not
033that will happen, I don't know. Over a year ago, I was suggesting that we budget for 50% of the state adequacy target, not knowing the impacts of Senate Bill 727. And now we have other legislation that will impact us as well. But I want to provide you other context and that is that as you are contemplating uh staff increases into the future that the cost of the step and step equivalency for all staff is approximately $3 million. That the cost of living increase for all staff for each 1% cola uh is approximately $ 1.5 million for the district. And so again all of these uh pieces need to be considered. So, uh, we've spent a great deal of time discussing this as an administrative team and wrestling with it and we, uh, feel, um, deeply
034about taking care of employees and doing good by them. And so, uh, in the recommendation for you this evening, we, uh, want to diminish that burden on the employees by recommending to you not the 12.8% 8% that we uh discussed with uh the insurance committee yesterday evening, but recommend a maximum of a 14% increase uh to the district paid uh employee premiums and basically that would be the comprehensive budget impact. Uh that includes that plan design change that's been previously committ communicated and also there will be an impact on the dependent care contributions. it won't be as large as what is demonstrated in all of the uh illustrations that have been posted at 12.8%. The district is some of that will shift over to the district bucket uh where those would be paid for. We
035also recommend that plan design change that includes correcting the administration of two plans into one that was discussed uh yesterday evening and um additionally uh recommend a transfer. So, this is a new and different concept and thing. So, uh I've shared with you monthly about the health fund and uh that $6 million that we're up to now. And so my recommendation to the board of education would be that you would authorize administration at the end of the year after all bills are paid that any unused operating budget for funds 10 and 20 at June 30 that we would have the ability to transfer up to that full amount over to the health fund to help create a sustainable balance. There is no uh legal requirement on a balance. I think that our magic number currently
036is approximately $7 million. We should be maintaining $7 million at June 30 so that we're equipped to weather the storm of the new bills and through claims that will be upon us in the new year. So whatever that would be, whether it would be $3 million of unused funds or maybe it increases all the way up to four or five million, I don't know. We do our best to estimate based on the information that we have, but we don't have a crystal ball to be able to project what that final number will be. So, that is an official uh recommendation as part of this uh health recommendation this evening. And then lastly, uh I I've included it here to memorialize it. Recommend a budget allocation for the 2526 fiscal year of 50% of the state
037adequacy target. um a chunk of that would be um taken on by the insurance increase. I have one last slide and these this would be for future consideration uh not currently recommending but for future administrations and the boards uh consider a strategy to eliminate the $1,000 annual dependent health savings account contribution for dependents. Currently that totals $629,000 a year. It's above and beyond that which most entities provide. Um my suggestion would be that you do that in phases and that you would reduce by $250 per enrolly per year until that is eliminated. And then secondly, consider, and I realize there are many nuances to this, but consider a per paycheck distribution of the health savings account so that we're uh ensured that we don't overpay people. Uh and also through that, the administration could look
038at moving that into uh the health fund so that it's being appropriately attributed to health health fund costs. Um, I know that uh any discussion about that would indicate that some people may have health claims and um have bills that they need to pay and they use those health savings account funds to do that. Um, and I also know that, you know, there are there's the ability to work out payment plans with hospitals and doctors and entities like that that could potentially provide other assistance for them. So, I'll leave that with you. If you have any questions, I would be happy to answer those or I'll phone a friend and uh bring someone else to the podium with me. Hold on. Let me We have a question for um from director Kushkar. Go ahead, Jane.
039I have a question. Carol, I don't mean to put you on the spot of the operating funds to the insurance. Do you have Do you have any idea how many years that we have had a zero sum balance in that fund? And the reason I asked that is because if we transfer all those funds, then does that put us in jeopardy for future funds that we might um need to you know transfer? Hey Jane, can you repeat that? Sorry, we were trying I was trying to find where the speaker is. Now we got the microphone. She can hear you. Sorry. Can you repeat? Hi Carol. Hey, I don't mean to put you on the spot, but I have a question. So, if we transfer, do you have any idea how many years that we have
040had a zero sum balance, meaning that we have spent every budgeted item in that account? Because if we transfer all of that out, would that put us in jeopardy for future years? You understand where I'm going? I do understand uh what you're asking and um that certainly would be taken into account. Currently the operating trajectory is making an assumption that every dollar budgeted is spent and every um for expenditures and every revenue dollar budgeted is received. And that's why I wrote the motion or not the motion but the recommendation to indicate that it would be up to that amount because we would also need to take a look at our revenue and make sure that we didn't uh place the district in a detrimental situation. So that's a great question and that is on our
041radar to make sure that whatever we would transfer would not um upset the apple cart to okay keep it safe. But again, I I I stress like you do the fact that um you know, if we don't meet these budgeted target targets, then we're at jeopardy in future years and that every dollar spent may not be able to I guess fund the teacher salaries moving forward. Right. It's a conundrum. It is. And if I could speak to that, Carol, remind me, is the target for us to have 1% to 2% of our whole budget um unused? Like anything more than that? We're not budgeting, right? But the idea is there's a certain sweet spot that we're aiming for that you're considering when you talk about this recommendation, right? So in simple terms, ideally by fund
042we have requested the board approve a budget that covers all of our expenditures. There's never a perfect science and especially when you're talking and you know you know how many employees we have and all the transactions that are occurring on a daily basis, schedules that they're working, that type of thing. It's very hard to pin that down. We monitor it on a monthly basis and uh do forecasting. Uh but to answer your question specifically, if if I'm hitting a 2% I'm doing very very well on overall budgeting for the operating fund, uh we can see that that it doesn't always work out that way and sometimes things cross the year, that kind of thing. So that can affect the the final outcome of that. We did recently uh run some numbers and we saw that
043in the past there there was excess budget uh that was available in the operating fund but the last few years we've really pulled that down deliberately so that we uh have a better understanding of what we really are working with and um currently we are anticipating some unused uh salary and benefit funds but until those final checks occur at the end of June we won't have clarity on that. Um, go ahead. Okay. When when would these changes go into effect? So, our plan year begins October 1 of each year. It's October 1 through September 30. And that affords us time by having this approval. Now, not only do we include the appropriate budgetary impact and our budget recommendation to you, but the team begins working on all the communication materials for the open enrollment process
044that will take place. uh I believe August I asked and I've already forgotten maybe August 5 or something. And this is just a when we were making that annual payment versus coming out of every um like monthly paycheck, was there some kind of a discount that came with the annual payment? So that's we're not losing anything. Well, no. I mean there's no discount. It's basically a check that is um distributed to the employee directly for their health savings account and we don't have access to that but but it becomes their money instantly when it's paid and IRS prohibits that we would do any kind of corrective payroll to pull back that which they shouldn't have been paid. And to be clear, we're not recommending that change at this time. It's something to consider in the
045future. I would say though based on the concern of the committee that some people plan ahead to have things done in October when they receive those funds that this decision being made much earlier would allow employees to plan ahead knowing that in you know if they had 6 months to plan that it's going to be coming monthly it the sooner the better. So your your ending balance the medical self insurance fund the ending balance is 552,000 right now that was reported in May which is and what did you say the ideal target would be 7 million is the number in my head right now six 7 million we'd be delighted with 5 million so we're a little bit short there we're a little bit short yes so with that being considered what you're wanting the
04614%. Does that in any way address that deficiency there? Anything that we're talking about relative to this renewal only addresses anticipated claims for that year. It does not address any deficit fund balance. How do we address the deficit fund balance? So part of it because my concern would be is correct we make this change now are we then in October having to make another transfer I mean we transferred what $6 million over the last year right what we're looking to address now how do we address that shortfall it definitely needs to be kept at the forefront of all conversations uh it will be uh more telling once we know how much budget we might be able to transfer over and then that will potentially set us up for better success in the year. And then
047we will continue to watch the performance of the plan. And keep in mind uh you know this information relative to the renewal and how much we need to increase costs is based on our claims experience. So if magically we didn't have the same level of claims in the upcoming year, then we will see that balance grow. I would encourage the board and administration that if you ever see it for whatever magical reason grow crazily, pay your operating fund back that which you transferred. So before you would make any other radical uh changes, right? I'm going to share Vice President Grder and myself were part of a conversation today with MSBA. They do an monthly conversation with uh presidents and vice presidents of different school districts. And they were bringing up the question about the fully
048funded amount and whether or not each school district is planning on receiving the whole amount. And what we heard was that twothirds of the people who knew whether or not the district was planning it or not planning it, twothirds were planning on not receiving the whole amount. And u again not it's not just the fact that other people are thinking the same thing that makes it right but it's helpful for me to know that there's a lot of wise people who are saying I know they're saying there's a full amount that's been approved by the state senate state house and yet there's multiple things the governor can do to reduce money in other ways so we don't get the full 6.4 four million. And so, uh, that was a conversation. I don't know if Vice
049President Grder wants to mention, but it was helpful for me to know that twothirds of the districts represented in that meeting through a poll identified that they're not planning on the full amount. They'll be they would love to receive it, but they're not basing their budget upon it. Right. Yeah. So, just to to build on that, too, because I didn't realize this, still learning a lot. um that even if the governor signs that doesn't mean he has to fund it because they watch how revenue comes into the state just like we have to continue to watch based on our forecast the revenue that's actually coming in to us so it can trickle down and wreak havoc still. So you put a reasonable seems like also popular um 50% guessing that we will get 50% of
050that 6 million sat but the reality is that we may not get even that 50%. Right. Correct. So what happens if we don't get that? What suffers? Like I know we've got like this is all coming out of the operating funds. So whether employees, you know, whatever the district absorbs ultimately the district is all of us, right? It's our teacher hires, it's our teacher salaries, it's our teachers, you know, everything else. It's it's it's all operating the district, right? So if we don't get that money, what what is that affecting like where are we what's paying the price then because something has to and our large our largest costs of course are our people. Uh and that's why I've said it multiple times that this will absolutely heavily influence the ability to do that which
051we would want to do when it comes to salary negotiations by spending this additional money on the benefits piece uh and not taking a larger um reduction on dependent contributions that type of thing. The the the pieces that would normalize us uh if you will. So it would it would just ultimately from my perspective that you you don't get at this through pencils and paper, right? It's always the people that comprises 80% of your operating budget. So, can I add to that too that next week is the budget hearing and our intention all along has been to bring a balanced budget to the board of education and that budget um Miss Embry and her team and working with all the leaders throughout the district was basing that when we were not anticipating receiving the SAT
052at all. And so that's where we started. So this discussion tonight though the one slide 50 showed that with this 14% increase it's about 1.7 million over what we built in the budget. So, is there a little bit of risk there? There is. We also feel it's a reasonable risk because we have generally recaptured, like Miss Emry said, 3 to four million each year. We're hopeful that some of the SAT, additional SAT will likely be funded. And so, it's not irresponsible to make this recommendation. Um, it's more of that long range planning, understanding the impact this has over the next several years because once we commit these funds this year, we generally don't lower the um amount of insurance we're providing to employees from a cost standpoint. That only goes up. And so these costs
053just like salary are now built into the budget and won't go away in f in future years. Thank you. Um so when we meet on the budget proposal that budget will be based on the 50%. That assumption based on if it passes the 14 now percent up that a little bit is that because how can I phrase this? So I know there are administrative or I know there are asks for resources teach additional teacher you know staff things that we need that will be presented and that we review. Was this bump made within a threshold so that we can still plan to staff the roles that we know are dire in dire need of. I know we need a lot more than we have, but the fact is we've got to find other revenue sources
054somehow, right, to be able to get the additional things that we want. So, I know those are tough decisions to make. But is that all that we have planned up to this point in time remains within the budget recommendation and we will develop the full budget based on that and also increasing the health from the 8% budget to the 14 uh with your approval and then also um placing in the state adequacy target increase at 50%. So assuming that we get that 50% that we should maintain that balance budget assuming all I know there are lots of numbers but okay thank you and I would like uh to mention director Harmon uh just to remind everyone here and in the public that our financial institutions tax has been quite sporadic very erratic I think is
055more the word I should use and I've shared with the board and the public that um we should never budget for that in advance. We're not budgeting for that. That could be another opportunity that if we had a spike in financial institutions tax like we've had in the past that those dollars could be then uh allocated to shore up the fund and assuming that we get to the point where we've levelized our um our annual process in terms of claims and revenue covering them. So, why don't you let me make sure I heard this right. So, the 14% would be an overall increase of 1.7 billion to the budget, right? 1.7 above above our current that was built in already at 8%. Okay. So, I hear an increase of 1.7 million. You're you're correct over
056what we shared. Yes. Okay. So, I'm just looking back our our fund balance at the end of 23, if I'm looking at this right, just shy of 6 million. Fiscal year 24, we're just over million. This last year, we're at 500,000. So, it seems like we're losing two and shouldn't say losing. We're shorting ourselves 2 and a half 3 million per year on this balance when we need to be going the other way. We do. Plus the 1.7 million is. So I imagine that's the sort of stuff you're going to be considering in this in your budget that you're going to be proposing in the next couple weeks as to I'd be curious as to how you're going to address those shortfalls. Well, and again, as Dr. Rumpus just referenced when we look at the
057budget for the recommendation for the coming year we're focused on a balanced budget but in the years out and that's why we see this downward slope that is truly uh where we need to identify other ways to gain more operating revenue or there need to be some significant changes made in terms of operating expenditures and from what I see I don't I don't see that uh lowhanging fruit readily at all in this district. Yeah, it's just it's just curious how you're going to to address that. And then the other thing that I thought was curious was the the HSAs. Um why is it we do it as a total at the beginning when everywhere or anybody I've talked to that's I'm familiar with it's a 100 bucks per check or two whatever they're deducting whatever
058they're choosing up to their max. How do we how would that go about getting that changed? And that would need to be uh explored more deeply. I currently don't have an understanding if that's part of any collective bargaining agreement. Uh but my understanding is is that it was an advocacy based on employees that were needing the funds uh all at one time early on in the year. That was the reasoning. Director Harmon, back to your last question. I think you were talking about specifically the fund balance and the health fund dropping over the past several years and I I think it's just important to highlight this slide and I shared this last night at the meeting but you know since 2019 when we look at our increases 2% 2% 4% 3.9 I think the reality
059is our costs ended up exceeding that in reality those each year should have been higher if we had been doing 8% increases each year we wouldn't be talking about 12% 14 or 22.7% % that needs to happen this year. And so in an ideal world, this is a little bit of a correction year. And while I'm sure they will still continue to go up, maybe it's not this extreme, but um you know, we're always looking back at claims as they come in and it's it's always a moving target. But you're absolutely right that monitoring that health funds separately seeing that significant decline because we can't be in a position of continuing to transfer significant funds back into that account. Understood. Agreed. So earlier you were planning on 8% increase and then we had conversations about
060maybe 10% and you had conversations with us about what our appetite was 10% 12.8 and the recommendation is 14%. U numbers are numbers. Uh can you share like what led to wanting to go up to 14%. Right. Um was it just because the numbers looked that way or did you hear anything from the employees saying is there any conditional way to help so instead of doing 8% now it's 14 right because like the admin listen was that was that part of that process at all. In other words, was that an important part of your process to hear from employees in developing the 14% number? It was and and I will say that was the the uh conversation during the employee insurance committee meeting yesterday evening uh was just the real concern of certain employees many
061employees bearing the cost of the additional dependent coverage that that will occur uh for them effective in October. And um you know while it's a few months out still it takes a while to communicate all that out. We need to be committed to that. But just that that burden on an annual basis of it being in excess of um I need to turn if I look at the employee plus family um that increase 232 a month. Thank you which was just $30,000 a year. So that was that was the why that was why we struggled with it. We understand the implications of a recommendation that takes away future operating fund utilization. Um we just hope that everyone remembers that when it's time to have those other conversations. So just so I'm clear, the $232 a
062month that you just referenced would be what people would lose more of like they're losing. So that was specific to the base plan employee plus family. If on that specific plan at 12.8% it was a 232hour increase per month to the employee specifically. Um so 27.84 over the course of the year in premium costs. And then if we do the 14% how much would that we don't have those specific numbers at this time. We just know that it will reduce it. it'll be less and that work will take place over the next few days um by the Marsh Mlennon team. Our intention would be that we would provide you well we would address the budget for the budget recommendation. We would also potentially post the employee premium information as information um to share with you
063and others uh and then continue the process of developing out all the communications relative to that. I just want to say thank you also for gathering the specific comparatives for the districts the neighboring districts. I think that's helpful. I know they presented in committee uh last night just you know about the whole across the whole Midwest and St. Louis region and then you know everything. So that was helpful too. I also appreciate the deep digging to try to balance I know you have uh a relatively impossible ask here to try to make everybody as happy as possible and protect the district. Um especially with the massive amount of volatility we have right now for our state and federal funding. Like it is it's a terrifying thing, very uncomfortable, a big big responsibility that we have
064to think about. So, I know this has been very difficult on you. I know it's going to be very difficult on our teachers and our families. Um, so I just want to acknowledge that like it's just a really tough situation and not as an excuse but just an explanation as well. I think everybody is feeling this outside of districts too. Um, talking Medicare, Medicaid, um, it's everywhere in the insurance industry and just in all of the costs. So, I know it also feels because it is just another chip. Um, so I just want to throw that out that I see that I feel that. Um, but I've also I think we've all spent a lot of time with you really digging in and asking some really tough questions about how these numbers are coming together
065and I know you've been very thoughtful um and really done a great job I think of balancing your district responsibility and you know human empathy for the situation. So thank you. Well, thank you for that and I acknowledge the entire team that has worked. Julie Walsh is in in the audience as well and I appreciate her her efforts and your emojis, our benefits manager and of course our uh broker team helping with all of it and can't do any of it without your support. So, thank you. Want to ask if uh Director Pushkar or Treasurer Owens have anything they want to add. want to make sure we make a space for your last questions or concerns, observations. If you're okay, just give me a thumbs up. Thank Thank you for the information. I appreciate it.
066Yep. Always always a wonderful um presentation. Very concise, very informative. Thank you, Carol, for all you do. Anything else? Okay. Uh so all those in favor say I. What can you remind us on? This is just to approve the report, right? The recommendations as presented. So there was the recommendation from the employee insurance committee for those uh ancillary services and then the administrative recommendation uh that included the comprehensive list and uh not only health but addressing fund balance with a motion. So a motion to approve the employee insurance recommendation as presented. Second uh motion by Amy, second by uh director Ponder. Wait, hold up. Sorry, we already did the motion. So now you guys just have to vote, right? Thank you for correcting me on that. So again, all those in favor say I. I.
067I. I. All those opposed say no. Motion passes. Thank you. Well, thank you for that. Um, our agenda does not have a place for uh superintendent comments or board comments. Um, I want to say that uh again, thank you for your time. uh this took an hour because it was worth the time and that is a representation of all the other time behind it. Um I appreciate the opportunity to have this conversation today versus adding that to the June 5th meeting. Um and as we share this, there's certain things we need to be able to affirm. One is that nothing in this conversation addresses past fund balances. It's all about what's facing us. Uh we're a self-insured plan, which means we also carry the risks of claim fluctuations. Um uh also dependent care even with
068the change uh would be the highest in the uh county uh highest percentage. uh we fully fund the employee insurance for them and that the admin through listening to uh employees in different venues u changed their recommended increase from 8% increase to 14% increase and want to make sure all of those were caught and captured as we consider this uh and with that I think it's time uh like to have a motion to adjourn open session So Motion by Director Ponder, seconded by Director Harmon. All those in favor say I. I. I. All those opposed say no. Motion carries.