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District projects $2.7 million deficit; school officials cite higher health-plan claims
Summary
The Oshkosh Area School District’s April budget variance report showed a projected $2.7 million deficit driven largely by higher-than-expected employee health insurance claims; staff said the shortfall would be covered by fund balance, leaving an estimated $18.7 million.
At the Board of Education meeting on May 14, the district’s budget presenter reported a projected deficit of about $2,700,000 through April, driven principally by health plan claims running higher than the budget assumed.
“Tonight's budget variance report is through the month of April. No real surprises from this report. It's tracking just like our prior reports have. The projected deficit did increase slightly. We're right now projecting about a $2,700,000 deficit,” said the presenter, who provided the board with the April variance figures.
District staff told the board that the near-term increase is almost entirely attributable to medical claims. The district had budgeted for an aggressive premium reduction—about 20 percent—while actual claims suggested a smaller reduction closer to 10 percent, leading to the current shortfall. The presenter explained the difficulty of setting premiums because the district’s health-plan year follows the calendar year while the district’s fiscal year does not, which leaves limited claims data at premium-setting time.
Board members asked how the shortfall would be handled. Staff said the deficit is expected to be paid from the district’s fund balance; they reported a projected fund-balance level of about $18,700,000 at fiscal year end. The presenter noted that, in percentage terms, the current projected deficit is under 2 percent of the district’s overall budget and that auditors typically focus on line items with variances greater than 5 percent.
No policy changes or premium decisions were made at the meeting; staff said they will continue working with the district’s broker to refine premium-setting and return to the board with additional information as the health-plan year yields more data.
