TPS health-care savings come up $2M short

Dan Romano, ex-TPS treasurer, says the board built the delayed savings into projections and believes the target will be reached. THE BLADE Enlarge | Photo Reprints

When teachers, administrators, and other Toledo Public Schools employees agreed to new contracts last year with steep financial concessions, how health-care benefits would change was left an open question.

The contracts for the districts' three employee unions saved the district millions, allowing TPS to balance its budget for two years and provide a level of financial stability.

While each union bargained separately, all three ultimately accepted similar agreements, with financial concessions modeled after recommendations made in a fact-finder's report between TPS and the Toledo Federation of Teachers that caused health-care premiums to increase to about 13 percent this year.

The district wanted savings of $9.5 million a year through increases of employee health-care premiums from 5 percent to 15 percent, along with added deductibles. The fact finder agreed, unless a committee of union leaders and district administrators could find an alternative that generated similar savings.

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The committee ultimately chose the district's proposal, according to committee members, though not exactly how the report was written.

The report recommended employee premiums jump to 10 percent on Sept. 1 and 15 percent on Jan. 1 if the committee was unable to reach an agreement. Instead of multiple premium increases, however, the committee blended the two rates to a little more than 13 percent on Sept. 1, which would result in the same savings but fewer transitions.

Premium contributions will increase to 15 percent next fiscal year.

"I think it was a wise move on the part of the union people," former TPS Treasurer Dan Romano said.

While employees have gotten used to increased contributions taken from their paychecks, the new deductible has been a tougher transition, said Don Yates, president of the school district's administrative union. Those in the most popular insurance plan went from no deductible to an annual one of $250 for single coverage and $500 for a family plan.

"That's really starting to hit," Mr. Yates said.

The fact-finder's report recommended a plan to reduce district costs by $9.5 million per year; the district proposal he endorsed will actually come up short this fiscal year by about $2 million, TPS interim-treasurer Matt Cleland said. That's because the plan wasn't implemented until September, two months after the fiscal year started.

In fact, if the health-care committee had reached an alternative agreement to the district's 15 percent premium proposal, employees would have paid more this fiscal year. That's because the alternative proposal allowed in the fact-finder's report had to reach $9.5 million in savings in a fiscal year, while the board proposal did not.

District leaders built that delay in savings into budget projections so there will be no missing $2 million at the end of the year.

"Nothing I've been told leads me to believe that they won't be on target with their projections," Mr. Romano said.

Contact Nolan Rosenkrans at: nrosenkrans@theblade.com or 419-724-6086.