Sooooo Close!… and Sad… School Board Has an Almost Perfect Decision on Benefits

By Scott Farnsworth

Fairness… that was all we could expect and all for which everyone at Tuesday’s Special School Board Meeting this past Tuesday asked as the votes were taken on the future of employee/retiree benefits.  No one in the audience had delusions that the status quo would or could be sustained, but there was anticipation that the members of the Board would do their best to secure the benefits that have been central to the compensation of active employees, while meeting their past obligations and promises to their retirees.

Mostly the Same

So, the good news is that there will be very little change in benefits for active employees, and a real possibility that the board laid the financial groundwork to unfreeze the salary schedule that has treated those employees unfairly over the past three years.  That, certainly, seemed the message communicated with each discussion of the savings to be realized through these decisions.  Even with the approval of maintaining all of the current insurance carriers, the board realized savings approaching $3 million over this year’s premiums.

A change was made to the district’s “base” health insurance plan, raising the deductibles from the current $500/$1000 levels to $750/$1500 – and while this change will pass on greater out-of-pocket costs to employees, the additional $1.75 million in saved premiums will very slightly reduce the premium co-pay and, it is hoped, assist in financing some real return to a salary schedule that supports a career path in the District, which would more than compensate for the increase.  The only question not clearly answered at Tuesday night’s meeting was whether the “buy-up” health insurance plan, with the $250/$500 deductible option, will still be available, but it is difficult to think of any reason it would be eliminated.

Long Term Care

The Long Term Care vote was left till the end of the agenda and represented – as it has throughout this process – the only heavily debated decision of the night.  Here, sadly, the board missed its opportunity to be fair and send everyone at the meeting – mainly retirees – away feeling that their voices had been heard, their very reasonable requests and concerns respected, and with a sense of having the board’s past promises to them fairly met.  That “perfect” ending to the night was, truly, easily within reach.

As seemed inevitable since the announcement by the WEA Trust of its petitioning for and receiving approval from the Office of the Commissioner of Insurance of the Reduced Paid-Up (RPU) plan option for those whose Long Term Care plans are ended in 2016, the School Board voted to terminate the benefit as of July 1st this year.  The motion, made by Dan Wade, should be recognized for including his provision that the $2.6 million saved on the premium cost should be applied to “compensation.”

Tarik Hamdan, the District’s CFO, had earlier outlined that Long Term Care cost the District $2.3 million for active employees and $300,000 for retirees.  At the making of the motion, he asked Mr. Wade if, by the word “compensation,” he was referencing everyone covered or just active employees – and this is where the board missed its golden opportunity to be fair to everyone affected – Mr. Wade indicated that he meant compensation of active employees.

There was an immediate buzz in the audience at this “clarification.”  What it meant was that the only group who had done anything to address the needs and concerns of those retirees affected by the loss of Long Term Care was the WEA Trust.  Active employees could expect some form of “compensation,” but retirees, none at all.

The board had been addressed repeatedly by retirees at all of its meetings, who expressed their concerns should the benefit be ended and an expectation that the board would do something to honor its past promises.  Tuesday, they were even presented a very reasonable plan by which they could “make good” on those promises: use a set amount of the savings to assist those retirees who wished to still take advantage of the Fully Paid-Up plan option to cover just a part of the tens of thousands it would cost them to cover the purchase.

It is very likely that, had the board decided – as was suggested by Kyle Flood – to do exactly that – say, the $300,000 the District would have had to expend on LTC coverage for retirees for just one year – everyone would have left the meeting feeling that the School Board had, at least, done something on their behalf.  Instead, the meeting ended with hard feelings – and the word “lawsuit” on several people’s lips.  It is sad, too, that ideas about how this very plan might be alternatively funded was discussed by a couple of board members afterwards. Had the intent to do so even been mentioned in public session, it would have done something to assuage the sense of betrayal expressed by those retirees in attendance.

The bottom line is that, until something along the lines of this proposal is done, the investigation into the possibility of a suit being brought against the District will be pursued.  We can hope that – in the best interests of the District, the taxpayers, the active employees and the retirees – the Board takes swift action on this concept.  For that reason, retirees and active employees alike are encouraged to write to the School Board and urge them to do the right thing for everyone.

Otherwise, as has been far too often the case over the past five years, the only ones to profit from these savings will likely be the attorneys.