Board approves defined district contribution for insurance, pay increases

The Red Oak School Board has approved a proposal setting a defined district contribution for health insurance for all covered employees at all levels for the 2023-24 school year.  
At the regular school board meeting Dec. 19, superintendent Ron Lorenz said the topic has been discussed at several points, and the rising costs of insurance have made it difficult to keep pace.
“We’re losing ground with other districts, due to inflation, with regards to salary and benefits. We’ve seen a 10% increase in health insurance the past few years, and we are expecting another significant increase this year. We know we need to do something to get a handle on our insurance costs,” Lorenz said.
As per the proposal, employees will be asked to pay any additional cost beyond this amount. This is commonly referred to as a defined benefit. A defined benefit is the norm in other industries and is becoming increasingly common in public education.
“Currently, 54 of the 70 school districts in our educator insurance trust use a defined or limited contribution model. This enables districts to funnel more resources to salaries and wages and allows employees to shop for benefits. Shopping for benefits means employees can opt for less expensive, higher deductible health plans and apply the remaining district contribution toward dental, vision, short-term disability, health savings accounts, or other benefit offerings, explained Lorenz. “To provide our employees the most value and choice, we will have a committee consisting of teachers, paraprofessionals, secretaries, and administrators, consider different benefit options and make a formal recommendation to the board. Our coverage options may shift, but they will continue to be robust.”
Lorenz advised the board the district had done a market comparison recently, which showed the district was spending much more on insurance than most of the districts in the region, which was going to be more challenging moving forward, so Lorenz was requesting the board approved defined benefits at the current levels so the district could allocate more funding to salary and wages.
“The district currently pays 100 percent of a single $1,500 deductible health insurance plan for most employees.  This costs the district $9,900 per year or $850 per month for each covered employee. An employee who wants to continue with the current single $1,500 deductible plan will pay about $48 per month if rates increase 6% next year or $82 per month if rates increase 10%,” advised Lorenz. “Many employees may opt for a higher deductible plan, like our current $2,500 deductible program and pay nothing with an average increase or about $15 per month with another 10% increase. If the increase is 6% there will be no increase at all. These rates are very affordable when you compare them to what people in other industries pay out of pocket for health insurance.”
Currently, the district is involved in a trust with other districts and all of them were assessed on an annual basis.
“There are three different tiers that dictate rates, and it’s based on claims. If you have relatively few claims, you’ll see a low increase. A moderate number of claims leads to a 5.9% or 6% increase. A high number of claims leads to the 10% increase. We have a very veteran staff, and the past few years, we’ve had those 10% increases, and we’re looking at least a 6% increase this year. There’s only one other district in the region that pays more for insurance than we do,” commented Lorenz.
The board also discussed increasing the rate of pay for paraprofessionals, building secretaries, and bus drivers by $2 per hour, for the remainder of the 2022-23 school year, beginning Jan. 1. Lorenz said the increase was suggested after a market analysis of other districts.
“In preparing for meet and confer discussions with non-certified personnel we conducted a market analysis of hourly wages and benefits in 35 southwest Iowa school districts. We found that even though our benefits contributions were at or near the top of the list and our total compensation was above the mean, our wages were near the bottom of the comparison group. We were consistently three to four dollars per hour below the average wage for paraprofessionals, bus drivers, and secretaries,” Lorenz explained.
With the decertification of the Red Oak Support Staff Association as the unit’s bargaining representative, the current collective bargaining agreement became unenforceable. This gave the district the opportunity to adjust current wages and get employees closer to the regional average.
“Ultimately, we want to provide competitive wages to support staff and all of our employees. The immediate $2 increase was a good start, and an additional $2 next year will get us to the average regional pay rate. We hope this helps us retain the hard-working people we currently have on staff and attract new employees in the future,” Lorenz said.
The current year increase will cost nearly $42,000. Lorenz said that was manageable.
“We can sustain that and manage that amount, but we’ll need to keep a close eye on whether or not it’s sustainable,” advised Lorenz.
The board approved increasing the rate of pay for paraprofessionals, building secretaries, and bus drivers by $2 per hour, for the remainder of the 2022-23 school year, beginning Jan. 1.
Next under discussion was increasing the rate of pay for paraprofessionals, building secretaries, and bus drivers by an additional $2 per hour, for the 2023-24 school year, beginning July 1.  The board also approved that increase.
Also on the agenda was discussion of an at risk/drop out application modified supplemental amount in the amount of $315,976.
“The district is eligible for supplemental state funding to provide additional supports for students who are underachieving, or are at risk for dropping out of school,” stated Lorenz. “We have to formally request those funds, and the maximum we can request is the $315,976, which is based on the number of identified at-risk students in the district. This is something we do every year, it’s just that the number changes depending on the number of students.”
The board approved the at risk/drop out application modified supplemental amount in the amount of $315,976.
The final action item on the agenda was discussion on refinishing the orange gym floor at the junior/senior high school, in the amount of $5,680.
“We have not sanded or recoated the floor since 2020. It’s recommended that we do so every one to two years, so it’s time to get that done. With the board’s approval, we can proceed with that work during the holiday break and get it done before the kids come back,” Lorenz commented.
The board approved the request to refurnish the floor, at a cost of $5,680.