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Akron school board caps life insurance

By John Published: June 15, 2010

By John Higgins
Beacon Journal staff writer

The Akron school board voted 5 to 1 Monday to reverse an administrative decision to cancel term life insurance policies for 239 disabled retirees.

Instead, the district will cap the death benefit at $40,000 and cease offering it to future disabled retirees.

Those with payouts of less than $40,000 would still get 125 percent of their annual salary.

But retirees receiving more than the cap will see their benefit cut to $40,000, which saves the district about $36,500 on the annual premium.

Board member Amy Grom was not present, and James Hardy cast the lone dissenting vote.

Hardy declined to explain his opposition.

But during the discussion before the vote, he expressed concern that retirees had received letters from the administration over the years stating that the retirees would receive the benefit for as long as they received disability benefits from one of the state retirement systems.

The letters did not surface until after retirees were informed last month that their benefits would be canceled. The school board was informed behind closed doors of the decision.

Officials could find no record of the board ever approving the benefit — which disabled retirees have received for at least 30 years — and determined that the letters were not legally binding.

Nevertheless, Hardy said that board members should be honest with themselves that if they changed or eliminated the benefit, they were changing something that had been promised.

''Had I known that any letter had gone out in any way shape or form guaranteeing it, it would have at least made me stop and think about it,'' Hardy said. ''Having all the information, making sure we have fully vetted something is crucial.''

''I know that this would save some money and we need every dime we can get,'' Hardy said. ''But I have a really difficult time coming to that 'yes' vote on a cap or anything else knowing that somebody got a letter saying they were going to get this.''

Superintendent David James proposed two options:

• Uphold his previous decision to cancel the retirees' policies, which would have saved the district about $150,000 a year.

• Cap the benefits somewhere between $10,000 and $50,000.

When pressed for his preference, the superintendent said a $50,000 cap would yield too small a savings — about $18,000 — but anything less than $25,000 would not be a meaningful benefit.

The board did not explicitly discuss simply allowing the affected retirees to keep their benefits.

''We did not feel obligated to have to continue that, but we did feel obligated to give them something to let them know that we did care and we do care about people,'' said school board President Curtis T. Walker Sr.

About two-thirds of the retirees will see their benefit reduced.

Of those 157 retirees, 103 have policies that pay between $40,000 and $59,000 upon death, and 11 have policies that pay more than $80,000.

In other old business that was revisited, the board unanimously affirmed its earlier decision to eliminate Stewart Africentric School as a separate program.

Stewart had only 64 students in kindergarten through fifth grade this spring, prompting its closing to save money.

The program was moved to Crouse elementary school last year under the supervision of the Crouse principal after the Stewart building was closed as a school because of declining enrollment.

Supporters said the district did not do enough to support the magnet program and were angry that the board upheld the closure without doing more research into why it was created 10 years ago.

They vowed to keep fighting to reopen the school, although board members talked more about how some of its concepts could be replicated in an after-school program.

Walker said the school — which had seven principals in 10 years — never lived up to its own goals of academic excellence.

Stewart received a state rating of ''academic watch, the equivalent of a D grade on its last state report card. The only state indicator out of 10 that it met was for attendance.

''We put in coaches, we put in extra help, we put in resources there,'' Walker said. ''What happened? I'm not sure.''


John Higgins can be reached at 330-996-3792 or jhiggins@thebeaconjournal.com. Read the education blog at http://education.ohio.com/.

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