Lynchburg finance report shows $2.25M health-claims deficit; board seeks rollover support
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Summary
The division's January finance report shows a year-to-date negative balance of $2,253,704.17 driven by high-cost health claims; staff said a $1,000,000 reserve remains and the division has requested $1.1M in rollover funding from city council while preparing an RFP for 2027.
The Lynchburg City Schools finance director presented the January 2026 financials, detailing revenue, expenditures and a year-to-date deficit driven by high-cost employee health claims.
Speaker 17 told the board the district has received $62,367,416 in revenue year to date and that the fiscal year is 58.33% complete. Expenditures were 55.54% of the original appropriation; encumbrance-driven variances were reported for attendant services (123.94%), health services (108.79%), and psychological services (129.79%). The finance presenter said January closed with $1,746,507.81 in high-cost claims that pushed the year-to-date balance to a negative $2,253,704.17.
When board members asked whether the deficit is sustainable, Speaker 17 said the district will issue a request for proposals (RFP) in 2027 for benefits vendors, recently implemented a 5% premium increase, and maintains about $1,000,000 in reserve. The presenter added that the division has requested $1,100,000 in rollover funding from the city council to help offset the deficit.
Board members asked for historical context; the finance presenter said similar negative positions (roughly $1.5–$2.0 million) have occurred in prior years and that the numbers presented are audited. The board discussed possible strategies but did not adopt an immediate policy change in the meeting.
The finance director offered to answer follow-up questions and the finance and facilities committee continues to monitor insurance and budget options ahead of contract renewal and the planned benefits RFP in 2027.