POWHATAN â€“ The Powhatan County School Board last week unanimously approved its $47 million fiscal year 2019 operating budget with the understanding that it will likely change in the coming weeks as the division learns more details about state funding.
During the school boardâ€™s meeting on Tuesday, March 27, the board unanimously passed the $47,061,227 fiscal year (FY) 2019 operating budget as well as the Food Service Budget for FY 2019 in the amount of $1,398,121.
The budget items were the first of a few unanimous votes held during the meeting but the only one to pass five to zero. Rick Cole, who represents District 1, had to leave early and did not vote on any of the other items.
Other votes taken during the evening were to pass the Health Insurance Renewal Rate Sheets for 2018-2019 and approve contracts for diesel, gasoline and heating oil, which covers both school and county vehicles. Larry Johns, assistant superintendent for finance and business operations, presented all three items for the board.
During his brief presentation, Johns said there had not been any changes to the proposed budgetâ€™s bottom line since Dr. Eric Jones, superintendent, presented the figures to the board of supervisors on March 19.
However, he did outline two changes to the category budget, which are mainly down to how a few figures are represented on the sheet.
The first change was that the local county transfer was reduced to reflect the return to the county of $176,648, part of a savings of $650,000 that would be returned to the county because of the closing of a school. When he originally presented the budget, it said that the schools would be receiving $705,189 more in funding from the county.
However, the countyâ€™s budget presented the net increase, which was the increase minus the repayment. Johns said he made the change so the school boardâ€™s adopted budget would balance with the countyâ€™s appropriated budget.
The other change was to the line item for the food service transfer, which dropped from $250,000 to $20,000. The food services budget is not self-supporting, so a transfer to cover the difference is always made from the operating budget.
However, because the school district is considering outsourcing its food services duties to a contractor, the change was made to put $230,000 of that transfer into a reserve fund, Johns said.
Jones updated the board on the food services contract. The division has finalized contract negotiations with the selected vendor and the contract is with the state for review. If it passes the Virginia Department of Education, it comes back to the school board for consideration.
The school board in all likelihood will be coming back to amend the budget after the General Assembly comes to an agreement and the governor signs a new state budget, Jones said. The school district already has sources of savings or potential cuts that would make up the difference if state funding is less than anticipated.
The school board accepted the Anthem Blue Cross and Blue Shield Renewal for the health insurance it provides to employees, approving it in a four to zero vote after Cole left.
Both the school board and the board of supervisors have been talking about the health insurance rate for weeks. At the beginning of the year, early forecasts had the new rate coming in at more than a 20 percent increase. But it actially turned out to be a roughly 10 percent increase over current premiums for the upcoming 2018 â€“ 2019 school year.
During his presentation, Johns reminded the board member of the cost saving measures staff was still recommending. Along with the approval of the health insurance provider, the school board approved the replacement of the Key Advantage Expanded Plan with the Key Advantage 250 Plan; approved an employer contribution to each employeeâ€™s Health Savings Accounts for employees that choose the High Deductible Plan; and approved the Group Health Insurance Rate Sheets for FY 2018-2019.
Regarding the Key Advantage plan changes, Johns noted that Anthem Local Choice reduced the benefits of the KA Expanded Plan for 2018 â€“ 2019 so they will be closer to the benefits of KA 250. Some examples are: Expanded ER visit co payment increases from $100 to $250; hospital inpatient from $200 to $300, and therapy services co pay after deductible from 10 percent to 20 percent. KA 250 co pays remain the same for these services at $350, $400 and 20 percent. Therefore, the benefit change for employees that move from KA Expanded to KA 250 will be less than expected.
Renewal documents were due to Anthem by April 1. Staff plans to conduct Open Enrollment for three weeks instead of two this year in order to provide more time to fully brief employees on the changes. Open Enrollment is scheduled April 23 to May 11.
Johns also talked about savings that allowed the school district to put more toward some plans, which is part of the incremental goal of moving toward the level of health care costs the county picks up for its employees. He acknowledged the school division still has a ways to go on that effort.
A request for bids was issued on March 5 and the bids were due on March 16 regarding contracts for diesel, gasoline and heating oil. Information was sent to 10 companies and four bids were submitted, Johns said.
Based upon the bid results the contract was split between two vendors. James River Solutions was awarded a contract for diesel and heating oil and Southern States Amelia was awarded a contract for 87 and 93 octane gasoline, Johns said.
This was a straight bid with the contract going to the lowest bidder, he said. He presented the information to the board but it did not require board approval.
Johns said that there was originally a lower bid for diesel, but the price was not locked until a contract was signed, so it went up significantly, meaning someone else became the lowest bidder.
Based upon the bid rates per gallon and the projected usage for FY 2019 there is a potential savings of $57,000 as compared to the amounts budgeted for fuel. This savings will decrease if the countyâ€™s usage exceeds the projected gallons, Johns said.
Johns said he tracks how much fuel is used and has options to purchase efficiently depending on if the county uses more or less gas than expected.
Johns also clarified that diesel fuel is used for buses, heating oil for buildings, 87 octane for regular school and county vehicles and 93 octane gas for sheriffâ€™s vehicles. The school district handles the fuel bid price so the county and schools can get better buying power. The county reimburses the schools for the fuel it uses.