VISD taxpayers want to know why insurance won’t pay

July 29--School district insurance claims are complex and can take a long time to settle, a state insurance expert said.

Victoria school district officials blamed slow or inadequate insurance payments as a primary reason for needing a 13-cent tax rate increase to cover repairs to damages caused by Hurricane Harvey.

Mark Hanna, a spokesman for The Insurance Council of Texas, explained that flood damage from a hurricane is handled by The National Flood Insurance Program through the Federal Emergency Management Agency. Meanwhile, windstorm damage could be covered by one or multiple insurance companies, Hanna said.

Buildings could be covered by one or multiple insurance companies, he said.

The time it takes for a district to be fully reimbursed depends on multiple factors, including disagreements between insurance adjusters. Also, the school district could have been underinsured, he said.

As proposed, the school district's maintenance and operation tax rate would increase to $1.17 per $100 of assessed valuation for the 2019 tax year only to cover continued repairs and to help rebuild the district's fund balance, according to the school district.

The revenue increase for the district during the one-year period would be about $5.6 million.

The damage the district sustained from Hurricane Harvey last August is now at $10 million.

The district has spent $5.9 million on repairs. This includes work on floors, roofs, libraries and Aloe Elementary School. Of that cost, $1.1 million has been reimbursed through insurance or the Federal Emergency Management Agency.

If the higher rate is adopted, the taxes on a home valued at $100,000 could increase about $10.83 a month before exemptions, according to the school district.

At the conclusion of the 2019 tax year, the increase would fall off.

The Victoria Advocate gathered common questions posed by the community and asked the school district. Here are the district's responses provided by Shawna Currie, district communications director.

Q: Where is the insurance money? Who is the risk manager?

A: The district's risk manager is Edwards Risk Management. The amount of time it is taking for the district to receive insurance payments seems to be between the insurance company and the risk manager. Along with that, the claims process is delayed because we did not suffer total or catastrophic loss, but rather partial loss in the facilities that were damaged.

Q: Are the schools so old that insurance isn't covering the full loss?

A: The insurance company is looking at the condition of the buildings when the hurricane hit. Coverage is categorized by each building, not each campus. During the process, insurance is requesting documentation of building condition and damages, which the district has been very detailed in providing.

Q: Why can't FEMA or grant money cover more of the loss? What else can the state and federal government do?

A: FEMA will not make any payments until after insurance payments have been released and after the project is complete. The state and federal governments can work to expedite the distribution of grant money in order to better facilitate the recovery process for all of those affected by Harvey.

Q: How does the district expect taxpayers who sustained their own Harvey losses to pay more in taxes?

A: We realize an increase in taxes is always a burden on the community. We don't take that lightly. This increase to the maintenance and operations portion of the tax rate will help to ensure that the district is able to provide the same quality education to our community without having to make cuts in staff or programs.

Q: Can the school district do this without a special election?

A: The tax rate will be set as part of the budget process, as it is each year, and will not be part of a special election.

Q: How long will the tax be in effect?

A: The increase to the maintenance and operation portion of the tax rate will be for one tax year, on the bill payable by January 2019.

Q: Is this a way of getting around the failed bond election?

A: The bond addressed capital expenditures and new facilities and would have increased the interest and sinking portion of the tax rate. This tax increase will be for the maintenance and operations tax rate, which is used for day-to-day operations of the district.

Q: When will the next attempt at another bond election be?

A: It has not been determined when another bond package will be proposed. That process would begin with several committees and community meetings to determine what projects would be in the proposal. That process has not started at this time.

Gabriella Canales reports on education for the Victoria Advocate. She may be reached at [email protected] or 361-580-6578.

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