Ky. Schools May Owe $60 million Bill After Insurance Trust Dissolves

Tuesday, January 15, 2013

Kentucky's school districts are facing a bill of $50 million to $60 million to pay off a longstanding deficit in a financially troubled insurance trust. Fayette County Public Schools' payment of about $2 million could be the largest in the state.

The Kentucky School Board Insurance Trust provided low-cost insurance to most of Kentucky's school districts for items such as workers' compensation and property. Under a plan devised by the trust's board and the Kentucky League of Cities, which has been operating the trust, the trust will be dissolved and a bond will be issued to allow school districts to pay off the deficit over 20 years.

The trust's board is in talks with Ross Sinclaire, a financial services group that specializes in public financing issues, to issue the bond. Ross Sinclaire already operates a statewide bond pool for schools to buy school buses.

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