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Teri Gage, an accountant with Eide Bailey LLP, addresses the school board on Nov. 19.
ELKO — Health insurance premiums aren’t bringing in enough revenue to cover self-insurance costs for the Elko County School District, accountant Teri Gage of Eide Bailey LLP told school trustees as she reported on the audit for the 2023-2024 fiscal year.
She said the deficit for district’s self-insured employee health insurance plan totaled $6.7 million in the fiscal year that ended June 30, compared with a deficit of $2.5 million in the prior fiscal year.
“Health care costs have really been skyrocketing. Revenue hasn’t caught up with inflationary times with health costs. It’s been quite a few years since you changed premiums,” Gage told the school board. “I know everyone here is well aware, but I just think we just really need to watch it.”
The school district’s chief financial officer, Cassandra Stahlke, said there were changes in deductibles for the current fiscal year, but health insurance premiums still would have to be $1,100 a month to break even, and “we’re about $300 short.”
The school district can’t simply raise rates because medical insurance premiums are part of the bargaining process for three unions—the teacher union, the bargaining unit for administrators and the association for non-certified district employees.
“While this is a negotiated item, certain fiscal triggers could take place to require a change in premiums for the ECSD employees automatically,” the school district said in an emailed statement. “We have a self-insured plan for the district, so it is important that the owners of the plan, our employees, have input on this process.”
The audit shows that the health insurance revenue totaled nearly $17.82 million, and expenses were a little more than $23.17 million in the fiscal year.
The district had a clean audit opinion for the 2023-2024 school year, and Gage said the ending fund balance was higher than the $3.3 million expected, at $12.2 million, which “is great. We all like to see that.”
She said the state’s preferred carryover balance is 8.3%, or one month of expenses, and the school district is at 11%, but if general fund dollars had been used to cover the health insurance deficit, the district would have had an ending fund balance of 4.8%.
The school district and trustees had been concerned that the ending fund balance would be so low that it would have to send an explanation letter to the state.
The final ending fund balance for the prior fiscal year was $9.93 million, according to the audit report that school trustees accepted on Nov. 19.
General fund revenue totaled $120.74 million for the fiscal year, while expenses totaled $109.19 million, according to the financial statement. Expenses in the prior fiscal year totaled a little more than $102.95 million.
Gage said the district’s pay-as-you-go capital projects fund ended the fiscal year with a balance of $14.7 million, but that was prior to the beginning of current projects that include the new food science building and modular classrooms at Spring Creek High School.
“We will see money coming back in with the 20-cent tax in 2024-2025,” Gage said, referring to Elko County’s designation earlier this year of 20 cents in property taxes for school construction projects.
Taxpayers refused to renew the long-time 75-cent pay-as-you-go tax for school construction in 2020 and the tax expired in June 2022, although collections trickled in for some time afterwards. The Nevada Legislature, however, passed AB519 that required Elko County to levy a tax of 1 cent to 25 cents per $100 assessed valuation or the state would levy a 25-cent tax.
Matt Stahlke, director of building operations for the school district, reported on Nov. 19 that the prefabricated food science building “should be showing up on Monday,” and light remodeling work is underway at the classroom modulars that are part of the project.
The district expects to spend roughly $5 million on the food science project.
Gage also told trustees that the state already paid the school district roughly half of the $64.5 million the legislature designated for a new school in Owyhee, and that money has earned $1 million in interest.
The district is trying to trim the Owyhee school design and plans to fit the $64.5 million award.
Future construction projects could also qualify for matching funds under AB519, which set aside $25 million to match rural school projects and another $25 million for schools on tribal land.
The audit report states the school district’s total governmental revenue was up 15% to $154.64 million, with the largest increase related to SB231, a bill that passed in the 2023 legislative session providing $3.24 million for state funded salary and benefits for teachers.
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Teri Gage, an accountant with Eide Bailey LLP, addresses the school board on Nov. 19.
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