Q&A: The effect of skyrocketing insurance premiums on Arkadelphia Public Schools

By JOEL PHELPS | The Arkadelphian

Insurance rates are skyrocketing for school districts nationwide for the upcoming school year, and Arkadelphia Public Schools is not immune.

The premium increases are reportedly due to an influx in natural disasters from climate change that affect school operations, as well as legal liability from increasing lawsuits, Arkansas Advocate reported this week.

Last school year the local school district paid $99,481 on property insurance. This year it will cost the district $239,079 — a difference of $139,598, or a 140% increase. The district’s carrier is through the Arkansas School Boards Association – Arkansas Insurance Department’s Risk Management Division.

We reached out to Arkadelphia Superintendent Nikki Thomas to ask how the local school district will adapt to the cost.

How will the increase affect the school district’s budget over the next year?

“As of right now, we are expecting a $41,879.42 increase in state funding that will offset a portion of the increase (30%),” Thomas said. “That will leave an additional $97,718.66 for the district to pick up unless the Legislative Committee determines a different amount in their meeting next Tuesday.”

How does the school district plan to respond to the increase?

“The District will have no choice but to pay the required premium. We are required to have property insurance.”

Will there be any budget cuts that might affect school programs or personnel?

“I don’t anticipate budget cuts to affect school programs or personnel. We have really trimmed both areas in the past few years to be more efficient in providing what is needed, without being excessive. The area that will probably be most affected will be our ability to budget for future projects as aggressively as we would like.

“We are looking ahead to the need for a new high school, administrative offices, and Alternative Education classroom space with the closure of the old Goza facility next year when the new Peake Elementary School opens.”

How immediate might any effects be seen?

“I think we will not see immediate effects, but rather long-term ability to save for future projects. Our financial stability is strong enough at this time to be able to pay the premium. I will have a better understanding of the effects as we navigate this year with the new salary requirements and funding matrix adjustments.”