Montgomery County Public Schools’ chief financial officer provided the Fiscal Management Committee an itemized review of Category 12 fixed charges for FY25 and a multi‑year projection showing negotiated cost‑saving measures aimed at restoring the employee benefit plan’s solvency.
Yvonne Alfonso Windsor, chief financial officer, described Category 12 as a collection of employer obligations that include active and retiree health insurance, the employer portion of FICA, retirement contributions, grant‑funded positions, risk management/self‑insurance, tuition reimbursement and other negotiated benefits. "This is the category where we fund our risk management, our self insurance for MCPS," she said.
Alfonso Windsor reviewed the FY25 budget versus actuals, saying active employee group insurance, FICA, tuition reimbursement and miscellaneous items ended the year in deficit, while retirement contributions, grants and risk management showed surpluses. She explained one cause: grant "revenue failure," where preliminary grant award estimates are reduced in final awards, producing a budget surplus in grant‑funded local obligations because less revenue materialized than the budget projected.
To reduce future pressure on the benefit plan, Alfonso Windsor summarized negotiated and contractual changes expected to lower costs beginning in FY26. These include a 1 percentage point increase in employee premium cost share (projected to yield about $2.9 million in FY26), anticipated prescription‑drug savings from a revised pharmacy contract (Caremark market analysis indicated $5–$7 million in reductions per year), and a modification of GLP‑1 prescribing criteria that the presenter estimated could reduce spending by $2.5 million in FY26 and about $5 million annually thereafter. Alfonso Windsor also said the insurer (Cigna) agreed to temporary administrative fee holidays totaling about $3.4 million in FY26 and smaller holidays in subsequent years; district projections combine these measures into roughly $20 million in annual savings across FY26–FY28.
Committee members asked clarifying questions about the budget table and the terminology. "So the budget is not actually the actual," one board member said; Alfonso Windsor confirmed that final federal grant awards can come in lower than initial estimates, resulting in revenue discrepancies. The CFO said a memo with final numbers and explanations will be provided to the board and county council.
The committee did not vote on new policy or funding during this presentation; the item was an informational review ahead of formal budget actions during the FY27 process.