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Benefits plan has deficit

District receives grant for Lincoln geothermal project

STERLING – The Sterling Public Schools Board on Wednesday discussed the school district’s employee benefits plan, which has a $1.15 deficit for the last fiscal year ending June 30.

Finance Director Tim Schwingle made a presentation to Sterling School Board members about the benefits plan.

Mike Stopulos, a representative of Davenport, Iowa-based Butler Benefit Service, the district’s plan administrator, also discussed the issue with the board, noting that there are benefits to a wellness program.

Employees and the district saw an 8 percent premium increase kick in on Sept. 1. That increase was not enough to cover expenses, and the fund is in danger of running out of money.

Schwingle is considering another increase in premium rates shared by employees and the district, which, if implemented, would likely take effect in January, he said.

The district can increase premium rates without negotiating with employees and without a board vote, but the union and board would be notified, Schwingle said. The union must approve of changes in the co-pays (percentages of the premiums) that the union or district would pay.

The school district has reduced its benefits for teachers, administrators and support staff in the last two contract negotiations, Superintendent Tad Everett has said.

Claims are unpredictable and medical providers have increased charges, Everett said at the meeting. The district will research its options for the insurance plan, he said.

The money in the employee benefits plan comes largely from the education fund, but can come from the operations and maintenance fund on behalf of the custodial staff, Schwingle said. Employees’ contributions to the plan are deducted directly from their paychecks, he said.

The district could make short-term, interfund loans to the benefits plan if it runs out of money, Schwingle said. Those loans would come from the education fund or the working cash fund.

“The irony is we’re taking money out of one fund that is struggling to put it into another fund that’s struggling, so it’s not an ideal solution,” he said.

Last year was probably the worst year the district has ever had for claims, Schwingle said. The fund ran out of money in 2002. The fund’s best year was 2009, Schwingle said.

The plan covers up to $110,000 for an individual. The district also buys supplemental insurance to cover health claims that exceed that amount.

The district has about 400 employees, and 307 of them are buying the insurance, Schwingle said. Employees are not given any money for not participating in the plan, Schwingle said.

In other matters, the district has received a $50,000 school maintenance grant from the state which will reimburse the district for its costs for the geothermal energy project at Lincoln Elementary School, Everett told the school board.

The project was expected in September to cost a total of about $600,000. It has been funded by grants, private donations and Health Life Safety funds.

The board voted to:

– Proclaim Nov. 11-17 American Education Week.

– Approve statements of assurances from the schools to the state as Race to the Top schools that they are committed to scientifically based research and that they will spend at least 10 percent of certain Title 1 funds on professional development.

– Approve the 2012-13 annual applications for Illinois State Board of Education recognition of the district’s schools as public schools.

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