Frederick County finance committee hears salary, health-insurance and program proposals; forwards $1M Dell contract to full board

The Frederick County School Board's finance committee on Feb. 2 reviewed the superintendent's needs-based budget priorities, including a multi-pronged salary initiative, a sharp projected increase in health-insurance costs and new instructional pilots, and voted to forward a $1,000,000 information-technology contract with Dell Marketing LP to the full board.

The committee heard staff describe year three of a five-year salary strategy intended to address years-of-service "compression" and improve recruitment. Staff proposed a 5.6% teacher pay-scale average at an estimated $6.8 million cost, composed of a 2.8% cost-of-living adjustment plus phase-3 adjustments that unclutter two years of experience and provide step movements. Classified hourly staff were proposed to see a 5.8% average increase at an estimated $2.2 million, while other professional staff would average 5.6% and administrators would receive a 2.8% COLA plus an average 2.8% for phase-3 improvements.

"This is an opportunity for us to break down each and every section," staff said when introducing the needs-based budget and the salary proposals. Staff repeatedly noted that the percentages are scale averages and that individual employee increases will vary depending on where an employee sits on the pay scale.

Staff framed the pay work as a response to recent turnover and regional competition: slides shown to the committee noted that 32 staff left the division last year and 15 took positions in Loudoun County. The committee discussed benchmarking to neighboring divisions and the limits of matching higher-tax jurisdictions, with one member noting, "we don't have the tax base that Loudoun has."

Health-insurance costs were a second major focus. Staff and consultants from McGriff Services explained that Frederick County operates a self-funded plan with stop-loss reinsurance that covers individual claims above $250,000. Based on this year's claims experience and actuarial projections, staff said roughly $7,000,000 would be needed to cover projected claims next year. The consultants described the current renewal environment as claims-driven and said many school systems are seeing double-digit increases, particularly driven by pharmacy costs.

Consultant Ed White said the renewal increase Frederick County is facing is "an outlier" compared with typical increases but is driven by recent claim experience; he estimated typical renewal increases in the 10% to 15% range historically. Staff gave an illustrative example of employee premium impact, saying that moving the full increase onto employees could raise some family premiums by about $183 to as much as roughly $500 per month, depending on plan choice and coverage tier.

Staff also addressed whether the school division and county should combine self-funded plans. The consultants warned that merging pools does not automatically reduce costs for the higher-claim group because claim experience would be averaged across participants; any savings would likely come mostly from administrative and stop-loss contract efficiencies, which staff said represent a modest share of total plan costs.

On staffing, staff reported that stakeholders requested 37 new positions; after trade-offs and reallocations the budget proposal includes a net 13 new positions (16 requests minus 3 reallocations). Many of the additions were described as compliance-driven under Virginia's Standards of Quality (SOQ), including speech-language pathologists and English-language teachers. Board members asked about added nursing support at particular schools; staff said LPN additions remain in staffing standards but could not be funded this cycle and that they would explore adjunct options such as partnerships with Shenandoah University.

Instructional initiatives highlighted a proposed Virtual Virginia high-school pilot that staff said aims to reclaim students currently being homeschooled. Miss Knight told the committee the pilot would target about 25 full-time students, with startup costs of about $120,000 and an estimated per-student cost of $4,500 to $4,800. Staff projected an average daily membership (ADM) reimbursement of roughly $7,500 per student, which staff said would allow the pilot to reach breakeven quickly if enrollment materializes. "Families seem to be tuning in," Miss Knight said, describing initial survey interest from families.

Summer programming plans were presented as largely continuation work, with most offerings fee neutral or funded from existing streams. Staff noted that staffing comprises about 85% of summer-program costs and provided a transportation estimate described in the presentation as approximately $2.3 million.

On procurement business, Miss Seibert presented a one-year renewal contract recommendation for information-technology equipment with Dell Marketing LP in the amount of $1,000,000. Speaker 2 moved to forward the contract to the full board with a recommendation of approval; Speaker 6 seconded. The motion passed by voice vote and the item will be considered by the full school board as an action item.

Staff reminded committee members that supplementary documents and detailed salary scenarios are posted on BoardDocs (agenda — new business — superintendent's proposed FY27 budget) and that the committee will meet weekly through March with a full-board budget work session scheduled for Feb. 17. A public hearing on the budget was announced for the following evening.

Next steps: the Dell contract will be moved to the full board for consideration; staff will continue to refine salary scenarios, health-insurance options and staffing trade-offs ahead of the Feb. 17 work session and the board's April meeting to finalize the budget for county submission.