Schools budget to be fully funded

Self-insurance fund surplus to fill gap in operating budget

May 13, 2007|By John-John Williams IV | John-John Williams IV,sun reporter

The school system's operating budget will be fully funded thanks to the unexpected success of a decision to self-insure employee health costs, Superintendent Sydney L. Cousin said.

He said the $2.3 million gap between what the school board requested and what County Executive Ken Ulman proposed for the 2008 fiscal year budget will be closed by using some of the $3.27 million surplus in the system's health insurance fund. The board had requested $429.5 million in county funding.

Using the money in the insurance fund will result in "the least impact as possible on operations," Cousin told the school board Thursday night. He added that classroom initiatives would remain intact.

The school system had no idea that paying for its own insurance claims could be so cost-effective, said David S. White, the system's budget officer. Officials had expected self-insurance would cost about $8 million this year.

"We've been able to realize savings beyond what we expected," White said. When school officials told County Council members Friday that they planned to take $2.3 million from the self-insurance fund, council members zeroed in on the $974,000 that would be left in the fund.

"You have $974,000 you don't think you need?" asked Courtney Watson, an Ellicott City Democrat and former school board member.

School officials - including Cousin, Chief Operating Officer Raymond Brown and Ken Roey, executive director of facilities and management - stressed that the balance is intended to provide a cushion for unanticipated costs that could result from the self-insurance plan.

Meanwhile, Cousin assured school board members that the system has enough money in reserve to continue planning for a Mount Hebron High School construction project regardless of whether the County Council decides to restore $18.9 million that Ulman cut from the proposed 2008 fiscal year school capital budget.

Although $816,000 remains in the 2008 capital budget for Mount Hebron planning, an additional $1.1 million would be required to plan for a $49.8 million renovation backed by Cousin and $1.2 million more would be needed to plan for an $80 million replacement school. The board is waiting for the results of a facilities study to determine whether Mount Hebron will be renovated or replaced.

The school system could use money from a land-acquisition fund to pay for whatever planning was needed, Cousin said at Thursday night's board meeting.

"We can go ahead with planning for Mount Hebron, so it cannot be delayed more than a year," Cousin said. "This will keep Mount Hebron on track and give it priority."

Board members, however, voted against two motions to approve the transfer of land-acquisition funds to pay for the planning.

Calling Cousin's money-transfer plan "premature," Frank Aquino, the board's vice chairman, was adamant that the board wait for the budget process to be completed before making a decision.

"The whole cycle has not been completed yet," he said.

No matter how much the capital budget contains, it will not affect the construction timeline at the school, Roey said.

"We have to plan it first," Roey said. "We couldn't spend any construction money. The construction money would just sit there."

john-john.williams@baltsun.com

Sun reporter Larry Carson contributed to this article.

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