Laguna Beach school board votes to absorb $1.04 million in health‑care overpayments

The Laguna Beach Unified School District Board of Education voted unanimously Dec. 16 to absorb $1,040,000 in employer health‑insurance contributions that staff say exceeded contractual caps in recent years.

The motion, approved 5‑0, implements the staff recommendation to cover the current‑year overpayment from district funds rather than attempting to recoup money from employees. Board President Morgan called the motion following a public comment period in which teachers, union leaders and parents urged the board not to “claw back” payments or otherwise penalize employees.

The vote addressed only corrective action for the current budget year. Superintendent Dr. Glass and business staff described four options presented in November and again tonight: have the district absorb the full amount this year; use one‑time state discretionary funds to partially offset the cost; renegotiate 2025–26 salary increases to share the burden; or negotiate future salary adjustments that could include repayments. Staff said the recommended approach is to absorb the $1,040,000 in the current year and address longer‑term changes in collective bargaining negotiations.

Why it matters: staff said most employee compensation is charged to the general fund (about 93–95% of impacted positions) with a small portion charged to the cafeteria fund, so absorbing the overpayment will increase the current‑year budget need and draw on reserves if not otherwise budgeted. Staff told the board roughly 350 district employees exist in the payroll universe and about 310 participated in district health plans this year.

During board questions, Mr. Conlon (human resources) said all employee groups — certificated, classified and unrepresented management positions — benefited from the miscalculation. The district's business manager advised that, while anyone can bring litigation, staff were not aware of any threatened suits at the time of the meeting.

Union leaders and employees urged the board not to shift the cost to staff. Stacey Zuziak, who identified herself as a high‑school staff member and president of the local California School Employees Association chapter, told the board, “Listen to the staff … This issue has been ongoing since July. The toll this has taken on staff and our mental health has been real and significant.” Porter James Hughes, the union's labor relations representative, said CSEA members received no additional payments and asked the board to avoid financial harm to members.

Several residents and former employees framed the mistake as a budgeting and governance failure that should be fixed administratively and through clearer negotiation processes rather than by reducing take‑home pay. Clerk Perry described the situation as both emotionally fraught and deserving of a deeper look to prevent recurrence: “We can't just say a mistake was made for five years or so and let it go — we need to figure out exactly what went on so we can guarantee it doesn't happen again.”

Vote details: the board conducted a roll‑call vote on the motion to absorb $1,040,000 for the current year. Member Kelly, Member Hills, Member Malcheski, Clerk Perry and President Morgan all voted yes; outcome: approved 5‑0.

What's next: the board limited tonight's action to the current‑year corrective step and directed that longer‑term issues — including possible changes to health‑care caps and future salary negotiations — be handled in bargaining or in future agenda items. Several board members said they will seek additional audit and governance details to ensure the error is resolved and not repeated.

The board moved on to an informational presentation on the facilities master plan later in the same meeting.