The Stafford school district’s self-insurance fund has been a topic of conversation at Board of Finance (BOF) meetings for months, but at the December 2, 2024, meeting, it seemed the issue was a step closer to resolution.
Interim Superintendent of Schools Dr. Laura Norbut said she presented a plan at the tri-board meeting between the BOF, BOE, and First Selectman. The schools currently have approximately $3 million budgeted for the self-insurance fund, and Dr. Norbut proposed moving $2 million into the self-insurance fund now and hoping that the other million would not be needed. Whatever is left at the end of the year could be used to pay back the $1.2 million borrowed from the General Fund.
However, Chair of the Board of Finance Steve Geryk was not thrilled with that solution, as he believed it would hinder the town’s ability to see how the fund is truly performing based on regular contributions from payroll and the Board of Education. So, instead, they came to an agreement where the town would alert the school district if the fund got low and ask them to move money to the fund rather than borrowing from the General Fund to cover the claims.
However, the exact level at which the town would alert the schools was unclear — and a matter of debate. Without the ability to predict the claims coming in on a given month, it's impossible to know how much needs to be in the account. Eventually, the town agreed to give the schools access to the account, allowing them to see the fund’s balance in real time to have as many eyes on it as possible.
That’s part of the short-term fix, but there’s still the larger question: is self-insurance the best option for the district going forward? The BOE is working with its advisor, One Digital, to decide between one of three likely options before next year’s budget is presented:
Continue with the self-insured plan
Move to the same fully-insured state plan as the rest of the town
Move to another fully-insured plan
While the BOF seems convinced a fully-insured plan is a better choice for the district — as it ultimately puts the risk back on the insurance company instead of the school budget — there is one concern. If the schools move to a fully-insured model as of July 1, 2024, will the district be able to pay back the money borrowed from the General Fund to cover past claims?
Essentially, there is an agreement between the schools and the town that any money left in the self-insurance budget will go to the General Fund. There is no guarantee there will be enough left this year to fully, or mostly, reimburse the town. Furthermore, where will the money come from to pay back the General Fund if the self-insurance fund goes away next year?
The question before the town now is whether the schools should move to a fully-insured model to eliminate the chance of the self-insurance fund needing to borrow money from the General Fund and risk never getting fully reimbursed or continue with the self-insurance fund for another year and hope there’s enough left over to get paid back? Either way, there is no guarantee that the General Fund will be fully reimbursed.