LIVINGSTON — Property insurance will cost the Livingston Parish School Board an additional $224,000 per year in premiums unless the policy limits are lowered, the district’s insurance consultant reported.
Maintaining $50 million in coverage on the district’s $288 million worth of school buildings and contents would cost $767,583 for 2012-13, compared to $543,409 last year, consultant John Norris told the board Thursday night.
The board will vote on coverage options during its Sept. 20 meeting.
While premiums for liability insurance are dropping because of a competitive market, property insurance rates have increased steadily due to changes in the industry’s method of calculating risk following storm events such as Hurricane Katrina, Norris said.
As a result, school districts across the state, including Tangipahoa, Jefferson, Iberia and Lafourche, have dropped their policy limits, Norris said. The only district that maintains full coverage is Washington Parish, he said.
Norris presented the board with three options: maintain $50 million in property coverage or drop to either $35 million or $25 million.
“Thankfully your properties are spread out across the parish,” such that a single event is unlikely to cause extensive damage to multiple school properties, he said.
The district’s most concentrated property value is along La. 16 in Denham Springs, where school buildings and contents have an approximate combined value of $32 million, Norris said.
“I don’t think you’re going to have a loss over $35 million,” Norris told the board.
The district’s biggest problem is likely to be flooding, Superintendent Bill Spear said. Extensive damage of that level would more likely come from a tornado spun off from a hurricane, he said.
Norris also reminded the board members that they do not carry flood insurance through the National Flood Insurance Program. He will present them with options for that coverage later this year after elevation certificates are finalized, he said.
In other business:
BUDGET APPROVED: The board adopted a 2012-13 budget that includes a $2.8 million general fund deficit.
No member of the public came forward to speak during Thursday night’s public hearing on the budget, which incorporates the return of three furlough days taken in 2011-12, a step increase in pay and a state-mandated 0.8 percent increase in the district’s contribution toward teachers’ retirement.
The budget also includes a projected seven percent increase in sales tax revenues and $1.3 million more in state funding based on increases in enrollment.
“Even though we’re approving this budget, we will keep looking at ways to make cuts where we can because we’re not out of the woods yet,” board member Keith Martin said.