Pocahontas Board of Ed.’s Atty. Clarifies Use of Insurance Monies for New Board Office
At the September 11th Pocahontas County Board of Education meeting, the Board’s Legal Counsel, Jason Long, discussed whether it was legally required to only use insurance monies from prior Central Office damage claims to purchase a new Board of Education Office Building. Some citizens have questioned this use of the claim money, wanting to spend it on repairing other school buildings instead. Here are portions of what Mr. Long had to say:
“The Administration is giving consideration to the relocation of the Central Office” Long told the Board. “The Administration is looking at it in the beginning stages to determine whether or not it’s feasible. The issue is: is it in the school system’s best legal interest or otherwise to utilize those insurance proceeds that have been kind of reserved. I see that there is some concern about what recommendations may be coming to the Board in the future. The issue is whether or not the Board should take this route. There is no dispute that a number of these county facilities are in dire need of structural improvement.”
“To protect our facilities from damages and afford us a safeguard to have funds to repair or replace these properties in the event of some loss –that’s the purpose of insurance, to repair or replace. Now as it relates to the Central Office facility, the School System, among other policies among other policies, has flood insurance in place. On certain occasions over the years, the School System over the years has made claims with its insurance company to cover damages, losses as a result of flooding in this facility. The last flood of course was in July of 2016. The insurance company, what they do is send out adjusters to the site to inspect the claims made by the School System. In the end the insurance company issues a payment to the Board for the purpose of providing funds for the repair or replacement of whatever has been damaged. Those are two key words, ‘repair or replacement.’ For example, let’s just suppose there’s a garage door in this facility- I don’t think there is – and in that July flood if there was a total loss to that garage door, insurance company would have paid a certain amount for that garage door to be repaired or replaced. Well, it may be we are able to get it fixed without any cost. Well the next time that flood comes through, the next time you make a claim, are they going to pay you again for the door they already paid you for? No, but you’re going to continue to pay that premium of course. Obviously the hot topic is whether the Board can take these insurance funds that have been set aside and use those funds for other needs including let’s say, facility issues in other locations. Can we just give those funds to Mr. Hall and patchwork Marlinton Elementary or Green Bank? That’s a business decision left to the Board.”
Long added that neither the Insurance company nor the West Virginia Department of Education will mandate how those funds are spent. However he provided Amy Willard, General Counsel of the WV Department of Education’s Office of School Finance’s written recommendations, – “To spend the insurance proceeds on the facility that was originally damaged which in this case would be to repair or replace the Central Office” Long said that if those funds are used elsewhere, like in the example of the garage door, you may be paying premiums without any more coverage for future damage. Long further quoted the Department of Education who said they: “sympathize with members of the community who would like to use insurance reserve funds to address other facility needs within the County, however utilizing the insurance proceeds from the Central Office claims for other purposes would likely lead to financial problems for Pocahontas County Schools.”
Long said that keeping the existing building will, over time, be more expensive then purchasing a new building because future flood insurance policy premiums for just the Board Office, not including Marlinton Elementary School or the Wellness Center, will be $13,000 in 2018; $17,298 in 2019; and $27,000 in 2021. Sherry Radcliff, the School Treasurer added that the current Board Office also incurs a $6000.00 a month utility bill.
Part two of this meeting story will cover other items at September 11th Board Meeting.