SHELTON — The school district is projecting a $137,637 budget deficit for the present fiscal year, due in large part to higher than anticipated costs in health insurance and special education professional services.

School Finance Director Rick Belden at the Board of Education Finance Committee Wednesday said the deficit figure is based on cost figures through Jan. 31, with “a significant increase in actual health insurance costs” the major driver.

Health insurance is presently trending $724,410 higher than budgeted in the 2019-20 school spending plan.

“We are self-insured and these costs are driven by incurred claims,” stated Belden in the monthly financial report. “This account is highly variable, and we work closely with the city Finance Department and city Benefits Department to monitor these expenses.”

Belden said the school district uses the same carrier and program as the city.

“We will be meeting with city staff and our insurance broker staff to analyze our claims activity and to determine if the current trend is an anomaly or representative of future claims activity,” stated Belden. “This account has significant potential to be substantially over budget by year end.”

Belden said the retirement benefits line item for employees is projected to be $255,224 higher than budgeted, “as the 2019-20 budget did not accurately reflect the correct amount of funding required for the past early retirement incentive plan, the current plan and deferred retirement longevity payments from June 30, 2018, retirees.”

The special education professional services account is projected to be $604,929 higher than the original budget number.

Belden said that services required under an individualized education plan (IEP) for special education students meant hiring more certified behavioral analysts and registered behavior technicians.

“These services are provided under a third-party agreement with a vendor and can be increased or decreased throughout the year depending on required student service levels,” stated Belden, adding that service requirements for special needs students are “highly variable.”

Belden said the threshold for receiving Excess Cost Grant reimbursement is about $67,000 per individual student. The school presently has two outplaced students receiving services, and is eligible for the reimbursement because their overall costs for tuition, transportation and special education services is more than $67,000 threshold.

“The significant portion of these costs is spread over a number of students in district and will not exceed the excess cost threshold on an individual basis,” said Belden.

The deficit has been reduced because some budget lines have more in them than have been spent: instructional materials ($253,239); tuition ($369,397); transportation ($234,291, with lower than anticipated special education costs); utilities ($57,204); and building and equipment ($81,587).