Robbing Peter to pay Paul pays off legally at A-W

Posted November 1, 2012 at 5:00 am

by Julie Ann Madden

Akron-Westfield Shared Superintendent Randy Collins found another way to increase General Fund dollars for the school district.

It’s called “Break-Fix Insurance,” Collins told school board members at their Oct. 8 meeting.

“It’s a way to move more money from the Management Levy Fund to the General Fund,” he said, adding district officials need to look for ways to save General Fund dollars.

Break-Fix Insurance pays districts to repair certain qualified equipment inhouse instead of calling a professional serviceman. The insurance company reimburses the district for doing these inhouse repairs at $35 per hour, said Collins. Projects such as building maintenance and computer repairs qualify for this program.

West Sioux School Board approved this earlier in the month and held a training, which A-W’s Head Custodian Norm Poel attended, he added.

Break-Fix insurance premiums will cost the district $32,000 annually, said Collins. However, he believes the district will recoup this in insurance reimbursements. Whether it takes an A-W employee one minute to fix the problem or 30 minutes, the district receives $17.50 for that employee’s labor.

This insurance program will basically move approximately $32,000 from the Management Levy Fund to the General Fund as Management Levy monies, which are property tax revenues, pay the insurance premiums and insurance reimbursement dollars go into the General Fund, he explained.

At a special A-W school board meeting Oct. 23, the board members unanimously approved purchasing this Break-Fix Insurance.

School Board Member Nick Schoenfelder questioned whether this was a “too good to be true” scheme but Collins assured the board that other districts were purchasing this insurance.

“It’s a way to move money to spend it where we need it,” said Collins, adding since A-W is “cash rich,” it’s a win-win situation.”

A-W and West Sioux School Districts’ Maintenance Director Bob Brewington submitted a list of vendors the schools use to the insurance company. Board Member Roger Oetken requested a copy of the list to confirm that local vendors are included on the list.

“How can we make money on this?” asked Schoenfelder.

“They predict a 70 percent return,” said Collins at the Oct. 23 meeting, “so districts can expect a 70 percent return (on their money).”

It will also impact the district’s tax rate, said Collins, explaining since Management Levy dollars are property tax revenues, the district’s tax rate can be lowered again.

“Every dollar is huge (when it impacts the General Fund),” said Oetken.

The vote was 6-0 with Board Member Phil Parks absent.

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