This session focused on health insurance, and the budget proposal as we work towards finalizing a sustainable and strategic financial plan for our schools. Below are the key takeaways from the March 6, 2025 budget work session.

🔗Please watch the meeting here

2025-2026 Budget Work Session 📑PowerPoint Presentation

Health Insurance Reserve Balance: Health insurance claims remain at a higher level than budgeted. Updated reports, based on  claim payments through February March 6, project a negative reserve balance of $633,939 by the end of the fiscal year. This includes the $1 million transfer of payroll lapse from the General Fund.

Spending Restrictions: We continue the pause on beginning new Major and Minor Capital special projects. We also halted all discretionary spending by the School Board departments. 

Health Insurance Update

We revisited the two options shared last week.

Option A: 1000 PPO with HRA for wellness employees, 2000 PPO with HRA for wellness employees, 3400 with HSA for wellness employees
Option B: 1000 PPO with HRA for wellness employees, 2000 HMO with HRA for wellness employees, 3400 with HSA for wellness employees

Key items to consider as we move forward with new options for our employees:

HMO: The introduction of the HMO does not change benefits, but shifts the provider network to reduce medical expenses.

• Page 10 of the presentation lists providers not participating in the HMO. Employees should verify out-of-pocket costs with their providers.

• Virginia providers must participate in the HealthKeepers HMO network to be considered in-network.

• Out-of-state providers must participate in the national BCBS PPO network to be in-network.

Health Savings Account (HSA): Employees who enroll in the Health Keepers $3,400 plan will receive an employer HSA contribution of $1,200 for single coverage or $2,400 for non-single for participating in wellness.

• Page 11 shows a comparison of the HSA to the existing HRA.
• Unlike the HRA, employees own the HSA as an investment account. However, if you switch to the HSA, you cannot spend from the HRA while receiving contributions to the HSA. Employees considering the switch should plan how to spend down existing HRA balances.
• Under an HSA plan, employees pay 100% of prescription costs until the deductible is met, after which copays begin.

The RCPS employee survey on the ALEX Virtual Insurance Counselor program revealed that only 21% of employees used ALEX, while 38% were aware of it but did not use it 41% were unaware of the program. The survey indicated low engagement and mixed opinions on its usefulness, raising concerns about its $37,000 annual cost. With the expansion of health plan options this year, HR will instead provide an informational video and direct staff support to help employees choose the best plan

Additional resources: 📑Health Rate Options For Consideration - Draft , ALEX employee survey results

Superintendent's Budget Proposed for Consideration 📑Budget Document

The attached report provides a detailed overview of the 2025-2026 Annual Budget as proposed by the Superintendent.

Budget Overview (Pages 3-6)
This section outlines key budget changes and requests, presented in three scenarios:

• Worst-case scenario (first column): Assumes the Governor reverts to the current biennium budget and the County reduces tax rates.
• Governor’s Budget (middle column): Reflects the Governor’s proposed budget and the current estimated County revenue, with new revenue totaling $4,467,409.
• Conference Budget (final column): Incorporates the Conference Budget and current estimated County revenue, with new revenue totaling $7,799,209.

The middle column serves as the foundation for the proposed budget, which includes a 1-step salary increase for employees and prioritizes shifting funds to build health insurance reserves to cover claim costs. In addition the budget is based on Option B for the new health insurance premium rate structure (1000 PPO with HRA for wellness employees, 2000 HMO with HRA for wellness employees, 3400 with HSA for wellness employees).

Total Proposed Budget: $282,794,199
The budget is distributed across 13 funds, detailed in the following sections:

• General Fund (Pages 8-17)
• Fleet Replacement Fund & Replacement Plan (Pages 18-19)
• Instructional Resources Fund & Textbook Adoption Plan (Pages 20-21)
• Technology Replacement Fund & Replacement Plan (Pages 22-24)
• Grant Fund (with explanations) (Pages 25-32)
• Nutrition Services Fund & Equipment Replacement Plan (Pages 34-38)
• Student Activity Fund (Pages 40-41)
• Capital Projects Funds, CIP, and CMP (Pages 42-45)
• Health Insurance Fund & premiums (Pages 46-47) 
• Dental Insurance Fund & premiums (Pages 48-49)
• Risk Management Fund (Page 50)
• OPEB Trust Fund (Page 51)

This report provides a comprehensive look at the financial outlook for the upcoming fiscal year, ensuring transparency and strategic planning in alignment with the school division’s priorities.

What’s Next?

• March 20: Budget Adoption
• April 8: Presentation to the Board of Supervisors

This session focused on health insurance updates, revenue changes, and departmental budget considerations as we work towards finalizing a sustainable and strategic financial plan for our schools. Below are the key takeaways from the March 6, 2025 budget work session.

🔗Please watch the meeting here

2025-2026 Budget Work Session 📑PowerPoint Presentation

Current Year Update

Health Insurance Reserve Balance: Health insurance claims remain at a higher level than budgeted. Updated reports, based on  claim payments through February 27, project a negative reserve balance of $464,916 by the end of the fiscal year. This includes the $1 million transfer of payroll lapse from the General Fund.

Spending Restrictions: We continue the pause on beginning new Major and Minor Capital special projects. We also halted all discretionary spending by the School Board departments. 

Health Insurance Update

Health insurance continues to play a critical role in the RCPS budget, with claims exposure influencing our financial outlook. After the last work session, we have redesigned the plan options and premium structures to provide more choices while maintaining competitive rates. Some of the strategy included:

New Plan Option Added: We introduced Health Keepers, an HMO with a $3,400 deductible, designed for cost savings. An HMO does not change benefits, but shifts the provider network to reduce medical expenses.

• Page 14 of the presentation lists providers not participating in the HMO. Employees should verify out-of-pocket costs with their providers.

Health Savings Account (HSA) Contribution: Employees who enroll in the Health Keepers $3,400 plan will receive an employer HSA contribution of $1,200 for single coverage or $2,400 for non-single.

• Page 15 shows a comparison of the HSA to the existing HRA.
• Unlike the HRA, employees own the HSA as an investment account. However, if you switch to the HSA, you cannot spend from the HRA while receiving contributions to the HSA. Employees considering the switch should plan how to spend down existing HRA balances.
• Under an HSA plan, employees pay 100% of prescription costs until the deductible is met, after which copays begin.

Employer Contribution Structure: Employer contributions now vary by insurance coverage tier but remain consistent across all plan options.

Family School Couple Rate: The employer contribution has been increased to provide additional employee support.

Non-Wellness Rate Changes: Non-wellness rates have been eliminated. Employer contributions for HRA or HSA will only be provided to employees who participate in the wellness program.

Additional resource: 📑Health Rate Options For Consideration - Draft 2

Revenue Update

The County’s revenue sharing formula projects approximately $3.8 million in new revenue, including $750,000 for the Comprehensive Services Act Contribution (which will be returned to the County). These figures may change as estimates are refined.

Departmental Budgets and Funding Requests

The department budgets and list of funding requests have been updated as numbers are calculated. The full list can be found in the PowerPoint.

What’s Next?

• March 13: Work Session #4 – Superintendent’s Proposed Budget
• March 20: Budget Adoption
• April 8: Presentation to the Board of Supervisors

 RCPS remains committed to a fiscally responsible approach that supports students, staff, and operations. We will continue working towards a balanced budget that prioritizes employee compensation, school resources, and financial sustainability.

 💬 Stay Engaged! Your feedback is valuable! Reach out with questions, comments, or concerns as we finalize the 2025-2026 budget.

As Roanoke County Public Schools (RCPS) continues to develop the budget, we provide critical insights into the fiscal planning and employee benefits in response to financial and healthcare trends. Below are the key takeaways from the February 13, 2025 budget work session.

Please watch the meeting here

Planning for Healthcare Costs and Coverage USI PowerPoint Presentation

The healthcare landscape for RCPS employees has seen significant changes, particularly in premium increases and funding structures.

Historical Premium Increases: The division has experienced fluctuations in medical premium increases, with a 12.4% increase projected for 2025-2026, following a 13.3% rise in 2024-2025.

Plan Comparisons: Various health plans, including HMO, PPO, and High Deductible Health Plans (HDHPs), were examined for their cost-benefit ratios.The estimated increased premium costs associated with changing to a full-insurance model were also discussed.

Self-Funding Trends: RCPS, along with Roanoke County and the Western Virginia Regional Jail, operates a self-funded insurance model, mitigating some costs through economies of scale.

Stop-Loss Insurance: The stop-loss liability is $250,000 to protect against catastrophic claims. Lower thresholds can be considered; however, they will cost more. It is a matter of finding the right balance for the division.

Account-Based Funding Options: The Health Reimbursement Account (HRA) and Health Savings Account (HSA) provide employees with tax-advantaged ways to manage healthcare expenses. RCPS contributes $500 (single) and $1,000 (family) for the current HRA plans. Any unused HRA contribution reverts to the division when the employee terminates the health plan coverage. An HSA contribution provided by the division would stay with the employee. See the USI PowerPoint for a list of comparisons between the HRA and HSA.

Managing Costs: Strategies already implemented include an on-site employee clinic, actively managing pharmacy costs, and exploring alternative funding mechanisms. Future strategies include implementing a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA), evaluating additional behavioral health resources, and incentivizing employees to use value-based care (lower cost with quality outcomes), such as virtual care options.

2025-2026 Budget Work Session PowerPoint Presentation

Health Insurance and Benefits

Health Insurance: Although there continues to be a lot of work to find the best combination of plans and premiums, the initial review focused on different pairings of the following plans:

The School Board requested additional analysis to offer one plan as a PPO, our current KeyCare 1000 or KeyCare 2000, and another under the HMO model, such as Anthem HealthKeepers. The HMO plan could reduce our claims costs by 2%-3%. Please see the USI presentation for quick pros and cons between the HMO and PPO.

Additional resources shared:

• Health Rate Options - Draft 1
• Health Insurance Comparison with Neighbors

Health & Wellness Center: Background and operating information were shared about the Wellness Center, and the discussion surrounded the cost of the clinic compared to the savings it provides. Additional information will be provided at the next meeting.

Other Post Employment Benefits: This includes retiree medical insurance. The division recognizes liabilities and sets aside funding for future retiree medical benefits. We put money in a Trust and recommend (based on an actuarial model) to fund 75% of the plan and pause our contribution until the year 2027.

Dental and Vision Insurance: There are no changes in premiums or benefits, with dental remaining under Delta Dental and vision through Blue View Vision.

Compensation and Employee Retention

Salary Adjustments: Proposed salary adjustments include a step increase (1.6%) or the step plus an additional 1.5% scale shift, totaling a 3.1% raise.

Teacher Salary Competitiveness: Roanoke County ranks fourth among neighboring districts, with ongoing discussions to improve salary scales.

State and Local Contributions: Both the House and Senate are considering $1,000 bonuses for SOQ instructional and support positions, though these remain subject to final budget approvals.

Departmental Budgets and Funding Requests

The department budgets and list of funding requests have been updated as numbers are calculated. The full list can be found in the PowerPoint.

Revenue and Financial Outlook

State Funding Variability: The Senate and House propose revenue increases to remove the support cap, provide additional special education resources, and fund a bonus. These adjustments will provide $4.17 million more than the current budget. The Governor's budget we reviewed during the first work session was significantly lower and only provided 846,125 over the current budget.

Student Fees: Student fees must be adopted by the School Board annually and a list of fees and nidification of changes are included in the PowerPoint.

What’s Next?

• February 20: Public hearing on the budget.
• Extra work session - TBD (maybe February 27?)
• March 13: Superintendent’s budget presentation.
• March 20: Final budget adoption.

As RCPS moves through these budget discussions, careful planning and strategic decision-making continue to be crucial to balancing financial constraints with the need to provide quality education for students. Stay tuned for further updates as these plans evolve, especially as we continue to research insurance options.

As Roanoke County Public Schools (RCPS) looks ahead to the coming years, significant budget updates and projections are shaping the financial landscape. Below is a summary of the January 30, 2025 presentations on the 2024-2025 budget update and the 2025-2026 budget work session, highlighting key revenue changes, expenditure updates, and future planning.

Please watch the meeting here

2024-2025 Budget Update PowerPoint Presentation

Revenue Updates

Enrollment trends are declining and recent membership levels foreshadow March 31 ADM (Average Daily Membership) will be less than budgeted by 66 students from the previous estimate. This is important because it is the basis for SOQ funding from the VDOE (Virginia Department of Education). The difference in these 66 students results in less revenue in the General Fund by $559,330.

Expenditure Updates

On the expenditures side, there are three line items that management is watching closely to identify their short-term and long-term impact on the operations.

PTO Payout Exposure: Policy 5.12 PTO/Sick Leave Guaranteed Income Regulations were updated to allow employees to cash out certain leave balances at the end of each year. Employees on a 220-day or fewer contract will be paid on June 30th and employees on a 230-day or more contract will be paid on July 15th. The potential liability for PTO and sick leave payouts ranges from $143,213 to $687,467. There is a small amount set aside for the payout, in addition, unused substitute budgets should help offset these costs. The concern is that we are on target to fully spend the substitute lines because our fill rates are significantly better this year due to the prior planning for absences. The good news is that the PTO plan, to date, has resulted in reduced staff absenteeism and seemingly better planning for absences. These factors have a positive impact on student learning. Better advance planning also has resulted in a much higher daily fill rate for securing substitute teachers. This is good, but also means that the budget for substitute teachers is being used more, leaving less in that account for paying end-of-year PTO payouts. The payouts are not in jeopardy for this year, but presents a challenge regarding how to pay for them

Electricity Costs: Electricity costs continue to remain high and a year-over-year analysis projects a possible exposure of $1.3 million. To help offset this high dollar expense, the Facilities and Operations department placed about $400,000 of the discretionary budget on hold to reduce the exposure to $903,829.

Health Insurance Claims: The most concerning exposure is the health insurance claims costs. Not only do we continue to face rising medical and pharmacy rates, but we have an unprecedented number of seriously ill members. We have a separate pot of money named the Health Insurance Fund to collect premiums and make payments. In this fund, we carry a reserve balance to save for years when the claims exceed our premiums. Unfortunately, we have had more high-dollar claims than usual and we are depleting these balances quickly. An August 15, 2024 letter from our health insurance consultant recommended a reserve balance of $4.0 to $4.4 million. We are projected to end the year with a negative reserve balance of ($1.9 million).

Aside: Please understand that while we have access to limited claims data, we DO NOT have any information that identifies who the members are.

Short-Term Strategies to Mitigate Costs

We will plan to request the Board of Supervisors (BOS) for approval to amend our ordinance to allow a $1.0 million transfer from the general fund. We will also hold off on contributing to the OPEB Trust this year. Finally, we will pause on beginning new Major and Minor Capital special projects.

Long-Term Cost Management Strategies

Consider changing our health insurance plan design, and premium structures, or looking into a variety of other strategies. Please watch the February 13, 2025 Work Session during which we will explore all options available to us. A full list is included in the presentation.

2025-2026 Budget Work Session PowerPoint Presentation

Governor’s Budget & Revenue Considerations

State SOQ revenue is based on the March 31 ADM. So to estimate revenue, we must first forecast March 31, 2026 ADM. We review many data points including grade level progression, VDOE estimates, Weldon Cooper estimates, fall enrollment, and current enrollment. Staff recommended and the School Board agreed to use 13,160, which is midway between the VDOE estimate of 13,145 and the Grade Progression calculation of 13,174.

The ADM estimate for 2025-2026 is 176 fewer students than our 2024-2025 budget. This will lead to less revenue than we would have expected. Some initiatives in driving revenues up (▲) or down (▼) are as follows:

▼ 1.0 million decrease in SOQ
▲ 2.2 million increase in compensation​

• We gave an average 5.0% raise in 2024-2025 (the first year of the biennium)
• We are required to give an average 1.0% raise in 2025-2026 to receive full funding​

▼ 352,228 decrease in Infrastructure and Operations Per Pupil Allocation
▲ 241,096 increase in VPI

Additional revenue sources include increased participation in nonresident tuition and online academy fees.

Replacement Plans & Capital Projects

The Fleet Replacement Plan is a 15-year plan to replace school buses and other vehicles on a useful life schedule. This plan will ensure the fleet does not age to a point where the cost to maintain any vehicle exceeds the cost to replace the vehicle.

We recommend pausing the transfer to the fleet replacement plan for one year for a $2.7 million savings.

The Textbook Adoption Plan is a 7-year plan to replace textbooks and other electronic resources for the classroom following VDOE guidelines. This plan allows the division to provide current and relevant classroom materials in alignment with the adoption years.

We recommend pausing the transfer to the fleet replacement plan for one year for a $500,000 savings.

The Technology Replacement Plan is a 6-year plan to replace technology infrastructure and equipment on a rotating schedule. This plan will help avoid disruptive service outages, keep up with technology changes, and help deter or respond to cybercrime issues. Normally, replacements of Promethean Boards and elementary laptops would have kicked in for next year, costing an additional $1,000,000 or more. Due to budget pressures and decreased revenues, this additional cost will be deferred for next year.

We recommend increasing the transfer to the technology replacement plan by $330,469 to support critical safety needs such as building swipe replacements.

The Nutrition Equipment Replacement Plan is a 15-year plan for replacing essential kitchen equipment like dishwashers, refrigerators, and ovens.

The Capital Maintenance Plan (CMP) is a 10-year plan for preventative maintenance projects to maintain the condition and longevity of school-owned buildings. This will extend the life of school facilities.

The Capital Improvement Plan (CIP) is a planning tool used to identify funding and allocate resources for large capital needs. Projects on the CIP are typically greater than $500,000 in value and may be funded by cash or by the sale of bonds.

Department Budget Considerations

During the budget process this year, departments identified areas in which they could reduce costs or absorb contractual increases. We also shifted some budget for more efficient purchasing and payment processes. A full list of these along with new requests can be found in the powerpoint.

What’s Next?

• February 4: Legislative Crossover review.
• February 13: Budget Work Session 2, including compensation and benefits discussions.
• February 20: Public hearing on the budget.
• March 13: Superintendent’s budget presentation.
• March 20: Final budget adoption.

As RCPS moves through these budget discussions, careful planning and strategic decision-making will be crucial to balancing financial constraints with the need to provide quality education for students. Stay tuned for further updates as these plans evolve.

2026BudgetCalendar_final.pdf