News From Terre Haute, Indiana

Local & Bistate

December 3, 2013

Two Sullivan County school districts to get $1 million

TERRE HAUTE — Northeast and Southwest Sullivan school districts each will receive more than $1 million as part of a settlement in a federal securities fraud lawsuit.

The two are among 27 districts statewide that will regain about half of the money they lost after they invested in a failed union health insurance plan offered through the Indiana State Teachers Association and National Education Association.

The 27 districts will split the $14 million settlement.

Northeast will receive $1,055,606 while Southwest will gain $1,276,982 in the settlement announced Tuesday by Secretary of State Connie Lawson. The Metropolitan School District of Shakamak will receive $57,871.

Northeast superintendent Mark Baker anticipated the money would be used for health insurance purposes “because that’s what the money went for initially,” he said.

Ironically, the settlement was announced just a day after the district board voted to close Union/Dugger schools and to move forward with a reorganization plan.

Baker does not believe that $1 million infusion of funds would change the board’s decision to move forward with the reorganization. The $1 million involves one-time money, not something sustainable on an annual basis, he said.

While the funds represent only half of what was lost, “I didn’t think we’d get any of it back,” Baker said. District officials are pleased to recover the more than $1 million.

Southwest Sullivan anticipates putting its nearly $1.3 million settlement money into a health insurance reserve fund, which will benefit current employees, said superintendent Chris Stitzle.

“I think we’re excited about the fact we’ll get some of the money back,” Stitzle said. “Obviously, we would have liked to get it all back.”

The school board accepted the terms of the tentative settlement agreement at its September meeting. All 27 districts had to agree to the overall settlement “or it wasn’t going to be approved,” he noted.

The district has been self-insured and has built up a reserve to protect the district in the event of a “bad year” in health insurance claims.

The nearly $1.3 million could potentially be used to give employees a “premium holiday” or to assist them with health savings accounts, Stitzle said.

Southwest Sullivan is now moving to a fully insured plan to be compliant with a new state law.

The Shakamak school district will place its $57,871 settlement into a health insurance account “to help with future health insurance costs,” which are always going up, said Superintendent Mike Mogan. “That’s where the money came from in the first place.”

While it’s not a huge amount, “In this day and  age, anything we can get back for health insurance purposes” is a good thing, Mogan said.

Sue Loughlin can be reached at (812) 231-4235 or sue.loughlin@tribstar.com.

 

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