Kearney R‑I board approves preliminary 2026–27 budget as members debate Musick insurance layer

The Kearney R‑I School District Board of Education on a voice vote approved a preliminary 2026–27 budget and separately agreed to add a retrospective rating plan with Musick to the district's insurance structure while board members pressed staff to research brokers and peer districts before making a longer‑term commitment.

The finance director told the board the budget presented is preliminary and subject to change depending on final year‑end figures. He said revenue exceeded expenditures in prior years but that the 2024–25 year tightened the district's net operating position and that early estimates show the district could face a drop in state aid (SAT) that would reduce state revenue by roughly $400,000. He said the district has conservatively planned for a modest 1% local revenue increase and a 1% federal decrease and has factored placeholders for utility and insurance increases, noting a possible 10% utilities increase and a 10% placeholder for health insurance costs.

The finance presenter summarized five‑year trends and cautioned the board that final numbers will continue to evolve through June and that the district is planning salary changes largely through attrition rather than across‑the‑board raises. He said the district's ending cash balance was tightened compared with earlier projections and that staff will bring updated forecasts next month.

On the insurance question, the board debated a motion to approve a large‑district retrospective rating plan with Musick that would be layered onto the district's existing coverage. Finance staff described the mechanics: the district would place money into a claims pot that could produce rebates to the district if incurred claims are lower than the prescribed reserve. The finance presenter said, “I would be shocked if we don't get money back by approving this program,” framing the decision as a rebate opportunity if current low claims continue.

Several board members pushed back on the risk profile and expressed unease about turning the district's self‑insurance posture into a form of gamble. One board member said, “I hate that we've turned our health insurance into, like, a FanDuel account where we're betting on having good years and bad years,” arguing the board should survey other districts and examine broker options before locking in a plan that could bar the district from re‑entry for five years. Finance staff agreed to research comparable districts and report back, and the board directed staff to pursue research on RFQs and broker alternatives before the November/January renewal timeline.

The meeting record shows the motions on the preliminary budget and on adding the Musick layer moved, were seconded, and were taken by voice; the chair called for the vote and the items proceeded. The board also discussed ancillary budget risks including expected insurance renewals and how claims history affects net cost.

The board will revisit final budget figures as year‑end numbers close and will receive the research on Musick and broker alternatives prior to the fall renewal window.