SOUTHINGTON — School officials are asking the town to use a projected self-insurance fund surplus to lessen the impact of mid-year cuts in state aid.
The town pays for general government and school employees’ medical claims through a self insurance fund.
Education officials proposed a contribution “holiday” where the district would keep what they usually pay into the self-insurance fund for a period to make up for the loss in state funding.
Sherri Dinello, school finance director, said earlier this month that claims are $800,000 lower than anticipated for the fiscal year. She suggested the contribution holiday as an alternative to layoffs or a furlough days.
“We’re not sure this is the time to be increasing fund balances for the self insurance fund,” she said. “There’s a very healthy fund balance right now.”
Brian Goralski, school board chairman, said the board’s efforts to reduce medical claims have been effective, adding the school district should receive some benefit from the savings.
Due to the cuts in state aid, the town is looking to fill a $2.1 million shortfall in its budget for the current fiscal year. School officials are working on a deficit mitigation plan. Town Hall has instituted spending freezes and other measures to handle their portion of the revenue loss.
Kevin Beaudoin, a member of the self insurance committee and Board of Finance, said the fund has had a rolling surplus of $4 million to $5 million over the past few years. There could be a surplus of around $800,000 this fiscal year, he said.
He’s open to discussing the contribution holiday but wants to make sure claims don’t spike in the last few months of the fiscal year. Most claims are made in the latter part of the fiscal year since employees must exhaust deductibles first.
“That’s something that might be doable, that’s something I was interested in talking about,” Beaudoin said.
The town, school board and employees contribute more than $20 million to the self insurance fund annually.
Chris Poulos, a Town Council member and self insurance committee vice chairman, said he wanted to see a specific proposal before making a recommendation to the council, which would have to approve the contribution holiday.
“If we’re going to have a discussion about that proposal, I would like to see the proposal in advance of the meeting” scheduled for March 28, he said. “It’s difficult to consider something on the spot when you’re looking at a lot of numbers.”
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