A change in the Loudoun County Board of Supervisors’ proposed FY 2018 budget has left the School Board’s Self-Insurance Fund reduced — and some school officials displeased.
Along with a sizable tax cut, Supervisors are planning to transfer $1.15 billion — nearly 8.5 percent more than current funding — to the Loudoun County Public Schools (LCPS) in their new budget. As part of that transfer, they reallocated about $11 million of the school system’s $23 million insurance reserve to help finance other priorities, which included school buses and turf fields.
Several School Board members said the lost funds could impact LCPS’ ability to finance employee’s insurance.
“It feels a little bit like they’re taking our newspaper delivery money and buying us school shoes,” Chairman Jeff Morse (Dulles) said at the School Board’s March 21 meeting. “They’re telling us what we’re supposed to be doing with the funds that we’re responsible for. I don’t enjoy the fact that they’ve identified all these cuts that we’re going to make because we’re not.”
Morse and Eric Hornberger (Ashburn) questioned the move’s legality, and Jill Turgeon (Blue Ridge) and Joy Maloney (Broad Run) said they were worried the county took money from LCPS employees.
“We’re going to do what’s best for the students and LCPS, not what’s best for the Board of Supervisors. But as we look at this and decide where we’re going to move forward with these funds, we need to make sure that the legal advice that the Board of Supervisors is providing agrees with our interpretation of the Self-Insurance contributions from the employee and employer is untouched,” Morse said.
Superintendent Eric Williams said that he believed there were legal questions around the reduction of the fund.
“I understand the funding going back to the county, I understand surplus funds. That’s reasonable. But to take that and then to cut the tax rate and then to hand us back some prizes is not the way we should be doing business in this county,” Morse said.
Vice Chairman Ralph Buona (R-Ashburn) said by state law, excess reserve funds must be returned to the governing body — in this case, the Board of Supervisors. Supervisors decided on the 8 percent reserve because that is what county government practices, Also, LCPS insurance claims are higher than county claims, so the county will enforce a 10 percent reserve every year after FY 2018, Buona said.
“The law and the precedent behind the law is extremely clear,” he said. “Anything in excess of that reserve, by Virginia law, has to revert back to the Board of Supervisors, which is why the Board brought that money back, because by law, it belongs to the Board of Supervisors.”
The School Board has to reconcile its proposed budget with the anticipated transfer from the Board of Supervisors by April 4. In the meantime, LCPS staff and legal counsel and will continue to look into the legal questions around the fund transfer.