The Ketchikan County Assembly has granted the local school district a reprieve after previously threatening to pay health care expenses to the school district directly.
It is the latest development in an ongoing dispute between the town of Ketchikan and the school district over health care payments. Premiums paid by the district and its employees have not kept pace with the cost of health care — to the tune of more than $5.2 million as of the end of December.
The town, which operates the district’s self-insurance program, had previously threatened to stop cutting checks on health care costs for school district employees at the beginning of this year.
The Ketchikan school district must reduce the growth of its healthcare-related debt for the rest of the school year and halt debt growth by the start of the next fiscal year in July. And she has to come up with a multi-year plan to pay off the debt and agree to face the consequences if that doesn’t happen.
Those are the terms an agreement I got in between the town and school district officials.
Borough Association member Grant Echohawk hailed the agreement. He said it would fix the problem and prevent it from happening again.
“I’m sure my colleagues here at this table and also … on the School Board are all very concerned about this,” he said. “And not only does this agreement help us get solid ground moving forward, but there is ongoing communication built into it.”
School district officials have warned that if the town stops paying health care expenses on January 1 as planned, they will be Had to make immediate cuts For athletics, tutoring, and other programs. And even that likely won’t be enough, they said last month.
District officials are concerned about rising healthcare costs for teachers and staff, saying last month that the school district’s accumulated debt was threatening the town’s public financial health.
Assemblyman Jeremy Bynum supported the agreement, though he was unsure how enforceable it would be if the school district continued to default on healthcare payments in the next fiscal year.
“I think it has good language to address a lot of the concerns that we have. I think that’s really a leap of faith, if you can use those words, in the sense that this is nothing more than a memorandum of agreement. I would question the legality of how binding it actually is,” he said.
He added language to the agreement intended to prevent the school district from asking for more money for operations outside the normal budget process. It passed 5-1 on an interception from EchoHawk, who argued it was unnecessary. The agreement itself was passed unanimously.
This was one of three Assembly votes intended to alleviate the health care budget crisis. In another, the board voted to increase the school district’s budget by about $700,000 to pay off some health care debt, Mayor Rodney Dial explained.
“What we’re talking about tonight is money that the district has already spent. So basically what the board is talking about is forgiving some of that debt. So it’s not like we’re adding expenses.”
It also passed unanimously.
But the Third proposalwhich would allow the town to spend an additional $1.9 million to keep up with the district’s health expenditures, ran into opposition from the mayor.
Attorney Glenn Brown explained that the action was necessary to ensure that the town did not spend money that was not legally allowed.
“This law is meant to keep the town safe because the loss of reserves from a lack of county funding for its health fund threatens the parent organization. Basically, we need to put more money in place so that the town doesn’t break the law.”
Board members unanimously approved the appropriations in the first two votes. But Dial said he plans to veto the measure later this month unless the school district submits a detailed budget to the association. He accused the district of significantly underfunding its own health insurance program against the advice of an insurance broker.
“If I can’t see your budget, the detailed budget, then I can’t verify that you’re accurately reporting your money. If I can’t verify, I can’t agree. That’s my responsibility as mayor of this community,” he said. “If the district has nothing to hide, then they have everything to gain from being transparent and working with the borough.”
He accused the county of “stalling” town officials’ request for a budget line detailing exactly what the county is spending its money on. He said allocating the money could leave the township unable to cope with emergencies, such as a resurgence of the COVID-19 pandemic, or an economic downturn.
He suggested amending the measure to oblige the region to cut spending. That, he said, would put the region on a path to debt repayment.
The appropriations of $1.9 million are due to go back to the assembly later this month for a final vote. If the Dial vetoes the action at that point, a five-member supermajority can override the veto at the next meeting.