By Heidi R. Kinchen
Florida Parishes bureau
August 11, 2012
AMITE — Cutting property coverage in half could help the Tangipahoa Parish School Board save nearly $60,000 in overall insurance premiums this year, if the board follows the recommendations of its Finance Committee.
The committee on Tuesday suggested dropping coverage on its $244 million worth of buildings and contents from $50 million down to $25 million, based on the advice of insurance consultant John Norris.
The reduction will require a waiver from the Louisiana commissioner of insurance, Norris said.
Escalating premium rates following Hurricane Katrina in 2005 have forced the school district, along with others across the state, to back down from full coverage in order to manage costs, Chief Financial Officer Bret Schnadelbach said.
The district paid $476,333 in premiums for $50 million worth of coverage on School Board property in 2011-12, according to figures Norris provided at Tuesday’s meeting.
Maintaining that level of coverage in 2012-13 would cost the district more than $714,000, Norris said.
Norris recommended cutting the coverage in half to shave $157,500 off the projected premiums, saying the reduced level of coverage would be in line with what other school districts are buying.
Of other surrounding parishes, only Washington Parish continues to maintain full coverage on its $130 million worth of school district property, Norris said.
In addition, the reduced policy limit should cover any reasonably expected losses short of catastrophic storm damage, Norris said. In the event of a major storm, FEMA would “back up” the district’s losses, as it does with other public entities, he said.
The school district will save roughly $59,000 in premiums on all insurance policies combined, including general liability, auto, errors and omissions, excess workers compensation and property coverage, if the board follows the Finance Committee’s recommendations, Norris said.
Other business before the Finance Committee included:
STOCK SALE: The committee recommended authorizing Chief Financial Officer Bret Schnadelbach to sell 1,131 shares in Winn-Dixie stock at a set rate of $9.50 per share for a total of $10,744.
The district was granted 7,911 shares of stock in lieu of sales taxes owed at the time of the company’s bankruptcy proceeding in 2005, Schnadelbach said.
Those shares were sold previously for $101,006, but district officials recently learned that prior to the sale, the district earned another portion of shares in dividends, Schnadelbach said.
Proceeds from the new stock sale will be split on a pro rata basis with Amite, Hammond and Ponchatoula, based on the sales receipts of Winn-Dixie stores in those cities, he said.