Loudoun Schools Chip Away at Insurance Fund Deficit

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.


One thought on “Loudoun Schools Chip Away at Insurance Fund Deficit

  • 2016-06-16 at 5:35 pm

    Hmmm, I wonder if that is because LCPS lied about how much step increases cost. Remember when I FOIA’d the salary info from LCPS. Judge Irby said LCPS provided me with the salary data and estimates for producing it in April 2015. That was some “imaginary facts” she created to absolve LCPS and dismiss the suit. But a couple months later I FOIA’d again and demonstrated that LCPS had been greatly overestimating the cost of step increases.

    You see LCPS got $16.8M from the BOS for step increases in FY16. But this year, after I published the data and I guess the COS asked them to do their job with basic calcs, LCPS acknowledges it only costs ~$10.3M, about a $6M difference. Btw, how much excess surplus did they have? Was it about $6M?

    But you know what? FY17 was forecast based on increases on FY16’s budget. So even though they scaled down the cost of the FY17 step increase, the extra funds for the FY16 budget is still carried over into the FY17 budget. They effectively get a permanent $6M slush fund each year. But our intrepid news organizations can’t be expected to ask any difficult questions. Instead we get platitudes from the chairman about “Seems like a responsible way to spend one-time revenue”. But it’s not one-time revenue. That’s the whole point. The excess from FY16 will be carried over going forward.

    Our emperors have no clothes but their court (the newspapers) just keep ignoring it.

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