Highland News Leader

Highland School District is not a good insurance risk

The Highland School District will have to pay about 20 percent more for its property casualty insurance next year because the district has had too many high-dollar claims against it the last four years.

“We are currently not a good insuree as we have incurred $600,000 of losses during that time,” Tim Bair, the district’s business manager, told board members in a memo.

According to a breakdown provided to the board, large payouts included $252,000 total for three general property claims resulting from wind damage, lighting strikes and burst pipes. Legal liability claims included $159,000 from two suits made by students, one paid in 2013-14 that cost $107,000 ($103,000 to the student) and another in 2015-16 that cost $52,000 ($43,000 to the student). The district also had two claims with employees settled in 2015-16 that totaled $176,000.

The largest premium increases were in the general liability ($50,053) and legal liability ($44,881) areas, 26 percent and 67 percent increases, respectively.

“Liability costs are increasing industry-wide due to the frequency of lawsuits, according to our agent,” Bair’s memo said.

The district typically solicits bids for its insurance every three or four years. Superintendent Mike Sutton said it is a fine line when to go out for bids. If companies know if a district is shopping every year, they tend to come back with higher premium prices, Sutton said, because one big claim on a one-year deal would mean the company could lose a substantial amount of money.

“You almost have to establish with a company and give them a chance,” Sutton said. “As bad as it is sometimes, you have to take it on the chin in order to protect yourself down the road … I know health insurance is a little different, but a couple years ago, Blue Cross Blue Shield would not even quote us, because we had jumped.”

Trying to establish that business relationship has to be weighed against trying to get the best deal, Sutton said.

“In order to be responsible to the taxpayers, every three or four years you have to go out and shop it,” he said.

This was one of those years. However, only three companies requested specifications from the district. One of those indicated they could not submit a competitive quote based on the district’s recent history. Another never had any further contact with the district after receiving the bid package. That left Affiliated Insurance Agencies/Hanover Insurance Group, the district’s current provider, as the only bidder.

The new premium has $10,000 deductible for legal liability. No other options were offered.

The underwriter did offer optional deductibles for property insurance: $87,390 for a $5,000 deductible; $91,970 for a $2,500 deductible; and $98,457 for a $1,000 deductible. The board opted for the $5,000 property deductible during its meeting June 26.

The district’s deductibles for property and legal liability had been $1,000 and $2,500, respectively, under its previous policy.

The property casualty package approved by the board for 2017-18, which also included a treasurer’s bond and catastrophic student accident riders will have a total cost of $224,430. Last year, the district paid $181,435, with the previously mentioned lower deductibles.

The district pays the premiums from its Tort Immunity Fund and has reserves available, if needed, to cover increased costs, Bair said.

Bair also presented the board with an idea for additional coverage for when students travel outside of the United States.

“This could be an issue with our FFA and foreign language trips, since those trips are approved by BOE, even though our oversight is limited,” Bair said.

The premiums for “global” coverage would be between $2,500 to $5,000, depending on the number of students and faculty traveling. The coverage would include general liability, medical and property damage on rented vehicles, limited emergency medical/illness coverage, and kidnap/ransom/extortion coverage and property theft.

Board members postponed a decision on the global coverage rider until a date closer to when one of the trips is actually going to take place.

Other business

Meal fees

The board approved of meal prices for the 2017-18 school year, which included a 10-cent increase in lunch prices. There was no increase in breakfast price. The district is required to keep pace with the price increases for the National School Lunch program or can risk losing funding.

In a memo to board members, Bair said that he federal government is trying to mitigate reimbursements for free and reduced meals being used to offset what the district charges for paid lunches.

“USDA says pricing paid lunches below the cost of production effectively increased federal subsidies for higher income children because federal funds intended to fund free and reduced lunches are being used to help build a gap between what a paid lunch cost and what the school receives for it,” Bair said. “Congress wants to equalize the field for all students’ access to nutritious meals and that is why they have implemented Paid Lunch Equity, or PLE.”

Board member Robert Miller was the lone no vote on the price increase. (Board members David Raymond and Joe Mott were absent.)

Miller said he “had a lot of problems” with the school lunch program, among them was that kids did not like what was being served. Miller asked if the district could withdraw from the federal program.

Bair said the district could ask for a waiver for the prices it charged, but could not get away from federal nutritional guidelines on what is served.

In order to get a waiver, Bair said the district would have to prove it had three months’ worth of cash on hand (about $300,000) in the account that covers its meals program. However, the district did not have those kind of reserves, Bair said.

Miller asked if the district could just transfer money from another account to show the proper balance. Bair and Sutton explained that such accounting would surely be caught by auditors and could jeopardize approximately $500,000 the district receives each year from the federal government.

After the price increase, lunches at Highland High School and Highland Middle School will now be $2.60. Prices at the district’s elementary buildings will be $2.50. Breakfasts will remain $1.35 at the high school and middle school, and $1.25 at the elementary schools.


Bair reported the district’s equalized assessed value (EAV), the amount of taxable property in the district, was at its highest level ever.

Across the district, EAV rose 1.92 percent, Bair said. Property values in Madison County were up 2 percent, which more than made up for falling EAV in Bond County (down 1.25 percent) and Montgomery County (down 4 percent).

Total EAV for the district, which has risen for the last three years, now stands at about $371 million. It is the first time the number has hit $370 million since 2009, Bair said.

EAV is calculated as  1/3 of the fair market value for residential and commercial property. Agricultural property is assessed on production value.

Life Safety Bonds

The Board of Education voted to give notice of its intent to sell $296,671 School Fire Prevention and Safety Bonds. The additional bonds are needed to complete the project identified in the 10-year health, life/safety study.

The board also approved an extension for life/safety work at several buildings, because the district cannot complete all the projects required in the time allowed. The extension would be until July 1, 2018.

Overnight trips

The board gave its contest for the HHS cross country team to attend Camp Wartburg in Waterloo Aug. 12-13 and the HHS cheerleading squad to attend camp at Pheasant Run Resort in St. Charles, Illinois, July 21-23.


The board approved the resignations of:

▪ Jody Venhaus, part-time elementary art teacher;

▪ Ron Holt, freshman football coach at Highland High School;

▪ David Giger, assistant track coach, Highland High School;

▪ Whitney Zobrist, assistant dance team coach at Highland High School; and

▪ Doug Bradley, head girls/boys track coach at Highland Middle School.

The board approved the following new hires:

▪ JoAnna Espique, special education teacher Highland Middle School; and

▪ Doug Bradley, varsity girls track coach at Highland High School.

Athletic Official Fees

The board approved the pay rates for athletic officials for the 2017-18, as recommended by the district’s athletic directors.

“They meet with other conference athletic directors to determine changes in rates from year to year. We are not bound by any increases, but it keeps us on an even playing field with the other schools in our conference,” Bair said in a memo.

The only changes were in soccer and softball at the high school level, which received a $5 increase in their game stipend.

The raises are projected to cost the district about about $300 total next season.

Agreement with Poplar Junction

The board approved an agreement with Poplar Junction Lanes for HHS bowling teams use the alley for their home matches for the 2017-2018 season. Poplar Junction does not charge the school for usage.

Debt Service Fund

The board approved a resolution to designate the interest from the Debt Service Fund so that it can transferred out of the fund. The board voted move the interest to the Educational Fund.

School Facility Occupation Tax

Madison County voters rejected the School Facility Occupation Tax in November. However, Montgomery County voters approved it, and Montgomery County has asked that all school districts approve a distribution agreement, which the Highland School Board did.

The Highland School District extends into Montgomery County, but no Highland students currently reside in the small amount of territory there. Therefore, even though Highland has property in Montgomery County, the district will not receive any revenue from the 1 percent sales tax, which is distributed on a per capita basis.

Title I Plan

The board approved an updated Title I plan. Title I provides financial assistance schools with high numbers of children from low-income families to help ensure that all children meet challenging state academic standards. The district’s Title I buildings are Alhambra Primary, Grantfork Elementary and Highland Primary. Derek Hacke, assistant superintendent for instruction, said the district expects its Title I funds to be cut in half next year, from about $50,000 to between $23,000 to $25,000.

Emergency Operations Plans

The school district has worked with local officials, including fire, ambulance, police, etc., to amend its Emergency Operation Plans. The plans are significantly the same, with the exception of building-specific information.

Amended Budget

The board approved an amended 2016-2017 budget. Amendments included OKing potential $50,000 loan from the Working Cash Fund to the Education Fund to make sure expenditures didn’t exceed the original budgeted amount in the fund. An amendment was needed for payment of life safety projects at Highland Middle School that were begun earlier than originally anticipated/budgeted.