School district property insurance costs to double, equivalent to four teaching positions

The Juneau School District will pay more than double for property insurance next fiscal year, a jump equivalent to four teaching positions under state funding restrictions.

The district paid $430,000 for property insurance in fiscal year 2022. That cost will exceed $800,000 in fiscal year 2023, Finance Director Jeff Rogers told the Assembly Finance Committee on February 2.

The $400,000 increase equals the cost of four teachers, Rogers said. State law caps school district funding, and insurance costs fall under that cap. The district must absorb the increase within its existing budget.

The increase stems from a hard global property insurance market and local claims history, Risk Management Officer Jennifer Mannix said. Juneau recorded 11 property claims exceeding $100,000 since fiscal year 2015. A recent pipe burst at Riverbend Elementary School exceeded $2 million. The district will pay the first $500,000 of that claim after the city's deductible increased from $100,000 to $500,000 in July 2021.

Global disasters have driven premiums up across all jurisdictions. Historical losses from hurricanes and forest fires have hardened the market over several years. Inflation will likely drive costs higher when the city renews its policy in July, Mannix said.

Rogers said he warned Superintendent Bridget Weiss about the coming increases. She passed the information to the school board during budget planning. The Assembly cannot solve the problem with additional funding.

The school district manages its facilities and must fund all maintenance and insurance costs. The city owns the buildings. The district operates them and pays for their insurance through its budget.