The St. Mary’s County Public Schools (SMCPS) over the past several years has received a refund from its insurance carrier, CareFirst BlueCross BlueShield. That savings has been passed along to its employees. Now the other shoe has dropped.
The school system has been informed that they have budgeted $1,925,000 less than is needed to cover anticipated and past claims. School Superintendent Dr. Michael Martirano told the school board of Wednesday that system employees have had several “major catastrophic illnesses.”
The budget disparity is also caused by the change in the way that the school system budgets it insurance premiums. They switched from a “modified retrospective billing arrangement” to a “claims made policy.” The switch amounts to damned if you do and damned if you don’t. Before the school system was over budgeting, causing criticism. This year they under budgeted. Martirano still supports the switch, saying it will lead to greater budget accountability. But in the meantime they are left with coming up with almost $2 million.
According to Assistant Superintendent of Fiscal Services and Human Resources Gregory Nourse said the system has been able to use $925,000 from the Fiscal Year 2013 Budget. He requested the school board approve a transfer of $1 million from the budget’s undesignated fund balance.
Several school board members expressed concern about the depleted fund reserve, which would be now down to $1.4 million. Martirano expressed a similar concern but said there was no other alternative.
In order to make up the difference in future years the superintendent said they may have to adjust premiums for current employees. But apparently retires are doing better because any adjustment would be downward for them, according to Nourse.
The budget transfer was unanimously approved by the school board. But it also has to be approved by the county commissioners. It will be presented at a commissioners’ meeting within the next two weeks.
