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Bentonville board says state law complication nearly would have raised insurance costs; senator intervened
Summary
Board members said a state law known as Act 560 created a captive property insurance option and that a later state interpretation appeared to add a penalty that could have reduced foundation funding by 9%; after the board sought help, Senator Bart Hester intervened and the district says it received a quote consistent with earlier estimates, avoiding a roughly $200,000 premium increase.
Board members at the Bentonville School District meeting on June 26 described a recent dispute over a state insurance law and credited Senator Bart Hester with intervening to avert a large cost increase.
A board member said Act 560 established a state captive property insurance program and that the district initially chose not to participate because the quoted premium increase for joining the captive would have been roughly $200,000 annually compared with about $25,000 in state partnership funds the district would have received for about three roof replacements over two years. The speaker said the state office of transformation (TSS) later took the position that nonparticipating districts would also lose 9% of foundation funding — a reduction the speaker said would amount to millions — even though that penalty was not written into the enacted language.
The board said it contacted Senator Bart Hester for assistance. The board member reported that Hester intervened, spoke with the governor’s office, and that the state returned with terms that matched prior estimates, allowing the district to avoid the larger premium increase. The board praised district staff, specifically Dr. Schwannhauser, for maintaining a strong loss record on property claims and for securing competitive rates over time.
The board’s account in public comment credited the legislative intervention with preventing what the board described as an approximately $200,000 annual insurance expense increase. The transcript records the board’s description of the state’s interpretation and the subsequent district outreach; it does not include statements from TSS, Senator Hester or the governor’s office in this meeting.
After discussing the insurance matter, the board returned from an executive session and approved personnel recommendations on a roll-call vote before adjourning.
