Highland News Leader

Highland School District auditor was ‘expecting worse’

The verdict of the 2016-2017 audit of the Highland School District was that the district did better than expected.

“It’s not like it’s a great year. But it is a very solid year. I was expecting the worst,” said Kevin Tepen of C.J. Schlosser & Co, the tax preparation service that preformed the audit.

Tepen said because of the lack of state funding going to the schools, his initial expectations were that the district would be in bad shape, as is the case with many other schools around Illinois.

“To know that you were able to manage that and be able to still come out positive and balanced, that is very, very good,” Tepen said.

Tepen said the district’s two main operating funds the Education Fund and the Operating and Maintenance Fund both exhibited increases from the prior year. The Education Fund showed a $99,567 increase, ending the year with a balance of $178,198 and the Operating and Maintenance from showed an $142,210 increase, with a balance of $735,972.

“So that’s a very solid year,” Tepen said.

Tepen said last year’s biggest deficit is shown in the Capital Projects Fund. This fund was down $3.5 million because of capital projects at the schools, according to Tepen. At the end of the year, Tepen said the fund still had about $637,218.

“The money was in there for those purposes, and it was spent for those purposes,” Tepen said.

Tepen said that the Illinois Municipal Retirement Fund, the fund through which the district’s pension money flows, also did well and ended the year up about $200,000.

The Bond and Interest Fund shows a deficit this year of about $168,650, according to the audit. But Tepen said that could be added up to the time of last year’s bonds and a large first interest payment.

“That first interest payment was a lot bigger than what the normal one would be, and that is what causes that deficit,” Tepen said. “It’s really having that increase last year is what caused that deficit this year. It’s just a timing between years.”

The Transportation Fund also showed a deficit of $38,841. But Tepen said that balancing this fund is a problem that is a continuous struggle with many other school districts.

“The formulas don’t really pay off very well, and everybody sees it’s a hard time to get the transportation fund to balance anywhere,” Tepen said.

The district’s Working Cash Fund also ended with an additional $197,264, and Tepen also said that the district’s Tort Fund was “up quite a bit” with an ending revenue of $1.1 million with expenses at $821,609.

Finally, Tepen said the Fire Prevention and Safety Fund is also up, which he said could be due to very limited expenditures.

“But really it goes back to the Ed Fund and the O & M Fund and you had a very good year. It was a solid year,” Tepen said.

Insurance renewal approved

The board followed recommendations from the Insurance Advisory Committee to renew the district’s health insurance coverage with United Health Care for 2017 and 2018.

With the new plan, premiums will increase about 6.6 percent with some changes in benefits, according to the district’s Business Manager Tim Bair.

“Our Medical Loss Ratio (claims to premiums) was over 100 percent this year due to several very large claims,” Bair said. “Companies like the ratio to be under 80 percent.”

Bair said the only change in the district’s standard plan will be that lab and minor X-ray costs will be applied to the deductible. Currently, he said employees may or may not incur charges depending on what lab is used and how it is coded. A positive change in the plan, according to Bair, is that for this plan dependents under 19 will have a $0 copay for doctor visits.

“Most plans industry wide have lab and Xray costs applied to deductible,” Bair said.

Bair said there will be no change in premiums for the district’s optional Flexpoint plan, while there are a few changes in benefits. Those changes include a increase in the copay to $2,000 and increases of the out of pocket maximum from $4,000 to $5,000. Bair said this option was added last year to help give a lower cost option for employees.

“Currently we have about 35 employees on the Flexpoint plan and 221 on the main plan,” Bair said.

Bair said overall increase in premiums including both plans is 5.9 percent.

As for vision and life insurance, provided by EyeMed and Guardian, Bair said the district will remain with its current carries at the current rates. The district’s dental rates are up approximately 12 percent over the last year, but Bair said the district is “locking in” its rates for the next two years with its current carrier. The districts dental plan is provided by Principal.

Approval of Source for Student Insurance

Bair said that when the district renewed its insurance in July, their carrier indicated that the district did not have coverage for the students going on upcoming overseas trips.

“We have had trips overseas. However, we have not purchased separate coverage in the past. I don’t know if our carrier at that particular time provided coverage or if the trip was taken without coverage.” Bair said. “In any case, once we became aware of the lack of coverage under our current provider, we felt it necessary to address.”

Bair said the cost of the insurance depends on the number of students that are going on the trip and where the trip is going. There are two overseas trips scheduled for the summer of 2018. The some FFA students will be going to Ireland from July and some foreign language students will be traveling to Italy and Spain in June. There are five students signed up for the Ireland trip and 32 signed up for the foreign language trip.

“The premiums for both of those trips combined is $2,966,” Bair said. “And those are good for essentially one year.”

The board voted 5-2 to have the district pick up the additional cost.

Board member Joe Mott voted against the district paying for the insurance.

“I didn’t feel the school should carry the full burden for it,” Mott said. “I would have voted favorable on a proposal that would have had shared responsibility between the school district and parents-student.”

Board member Rene Friedel agreed with Mott and also voted against paying for the insurance.

“These are trips provided by the district. The district provides the opportunities,” Friedel said. “I believe any costs associated should be the cost of the students.”


The board approved the following resignations:

▪ Erin Smith, who has worked as the eighth-grade softball coach at Highland Middle School.

▪ Anastacia Harrell, who has worked as the color guard coach at Highland High School.