County finance snapshot: $2M year‑to‑date school surplus, state budget risks and a 10.2% Local Choice health‑insurance renewal

County and school finance occupied much of the March 17 session after transportation and ceremonial items. The board received a first monthly school financial snapshot produced with a consultant and a county finance overview that together highlighted current positives and looming budget risks.

Ann Shver, the county’s finance consultant, presented a one‑page statement for the school division covering the first eight months of fiscal 2026 and said there was a roughly $2 million positive change in net position year‑to‑date. She noted total revenues were about 68% of budget and expenditures about 66%, and flagged two points of concern: state sales tax receipts were at about 57% of budget for the period, and federal funding was recorded at under half of budgeted amounts to date. Shver said county transfers to the schools were ahead of the typical pace — about $8.8 million more than at the same point last year — reflecting county cash support while federal receipts lag.

County finance (Mr. Carter) gave an update for the general fund through February. Total general‑fund revenues were about 69.1% of budget and expenditures at or below the 67% timing benchmark, but Carter warned roughly $7.9 million remains to be transferred to the school division for the final five months of the fiscal year and that timing and revenue shortfalls could create near‑term pressure.

Carter also reviewed state‑level developments that could increase local costs in future budgets: proposed changes to CSA cost share and a cap on state reimbursement, potential paid family‑leave requirements that would layer paid leave on top of FMLA, a planned minimum wage increase to $13.75 in 2027 and $15 in 2028, and a move to require or expand collective bargaining for public employees. He warned that those items, if enacted as drafted, would create structural fiscal pressure for both county operations and school budgets in coming years.

On health benefits, the county’s benefits broker (Pierce Group senior VP Gay Hooker) presented the Local Choice renewal that underwrites coverage for many public employers across Virginia. Local Choice’s underwriting requirement produces a 10.2% increase for Franklin County’s plan year beginning July 1, largely driven by pharmacy and specialty‑drug inflation. Hooker highlighted protections in the pool model — a drug capitation line and pooled reinsurance — that limited the county’s renewal compared with much higher fully insured market bids (some public entities have received 30–40% fully insured increases). Pierce Group modeled options for the board: (1) the county absorbs the full increase (budget impact ~ $650,000), (2) modest employee premium increases on the $1,000 deductible plan and no change to the HDHP (saves roughly $100,000), or (3) an 85/15 split (which would shift more cost to employees and yield further budget relief). Staff emphasized Local Choice paperwork and rate deadlines, noting the renewal package must be finalized by April 1 to meet open‑enrollment timing in May.

What the board asked staff to do: supervisors requested follow‑up data and asked staff to bring options back at the budget work sessions later this month; Mr. Carter said staff will develop projections and report back before any final county budget decisions.