Looks like we may have stumbled upon the reason for that “benefits review” by the Clark County Education Association’s health trust. Union representatives were told in a closed-door meeting last week that the trust is losing money and will be “belly up in 60 to 90 days.”
The Las Vegas Review-Journal obtained a spreadsheet distributed during the meeting that outlined the trust’s woes:
The trust has lost more than $3.6 million since the fiscal year began July 1 because the cost of claims exceeds the trust’s revenue, according to the spreadsheet.
But the river of red ink stretches much further back.
The trust has stayed afloat the past two school years by dipping into and depleting what was a $7.23 million cash reserve. The trust would have bled its savings dry if not for a $5 million line of credit taken from the Bank of Nevada on Nov. 15, 2011, according to trust audits obtained from the Clark County School District and other sources. Less than $1 million of that credit remained in June.
The Nevada Journal has been all over this story, and posted the text of the CCEA executive director’s report of January 29. It states that the trust “has maintained operations based on a static revenue stream despite the growing medical claims. This no longer is sustainable.”
Teachers are being asked to pay higher premiums because the trust “has drawn down its reserves to very critical levels and need this increase to become more financially stable.”
When the stories hit, CCEA immediately entered full bunker mode, blaming the school district’s failure to increase contributions and the “ulterior agenda” of third parties. However, the union didn’t deny any of the specifics of the published stories. Instead, it informed members that “we anticipate we will begin a journey of change.”
The “change,” of course, is expected to come from the pockets of teachers and taxpayers. The school district provides almost 80% of the trust’s annual revenue.