The county’s school system is making progress to dig its self-insurance fund out of a $17.5 million hole.
The Loudoun County School Board agreed at a meeting last week to earmark an estimated $5.2 million in surplus funds from fiscal year 2016 to the deficit.
Three years ago, the schools’ budget managers told the board that the division had been hit unusually hard with insurance costs, sending it $14 million in the hole. Over the next year, the problem grew worse and the fund fell $17.5 million in the red.
Then, gradually, the school system started to see the positive effects of changes made to employees’ health insurance options. In 2014, the School Board voted to no longer subsidize the more expensive of two health care plans offered to employees.
“Through those changes, we were able to stop the slide, and we were actually able to start to recover,” School Board member Jeff Morse (Dulles) said.
The fund also got a boost when the Board of Supervisors, last year, agreed to give the schools $7 million in county funds toward the deficit. Now, the fund shortfall sits at about $10 million. The $5.2 million fund balance will cut it in half.
“We are still working on the self-insurance fund to ensure a positive fund balance,” Assistant Superintendent of Financial Services E. Leigh Burden assured the School Board at its June 7 meeting.
“I believe in us getting our fiscal house in order as quickly as possible,” Morse added. “This will get us halfway there in one year, and the projections in the out years have us continuing to improve in that financial picture.”
Chairman Eric Hornberger (Ashburn) agreed, “Seems like a responsible way to spend one-time revenue.”
Burden estimates the school system will end fiscal year 2016 with a $12.2 million surplus. The board approved $7 million of that as carry over for use in the fiscal year 2017 budget.