The High Desert Education Service District bought new insurance two years ago to save money, but now with its insurance program leaving Oregon, the district has to return to its old insurer and could see costs increase.

About four years ago, the state Legislature created new requirements for public entity self-insurance programs. Those who run such programs must now maintain at least $1 million in annual contributions. Going into this school year, the United Schools Insurance Program of Oregon fell below that line, so it is leaving the state. The High Desert ESD and the Sisters School District were the only area districts still remaining in the program.

With United Schools’ departure, Oregon school districts must now get property and casualty insurance from PACE, which is run by the Oregon School Boards Association.

High Desert ESD saved about 20 percent in casualty and property insurance costs when it switched from PACE to USIPO in 2009. If that difference holds this year, the switch back to PACE will boost the district’s premium by just under $5,000.

Little competition

That worries Greg Munn, the High Desert ESD’s financial services director and a volunteer USIPO board member. Munn isn’t certain the district’s insurance costs will jump this year, but he worries about the lack of competition.

“I’d love to have two or three (programs) out there. It benefits schools in the long run,” he said.

OSBA Executive Director Kevin McCann said he, too, would prefer more competition. Still, he believes PACE’s structure will keep the program’s rates from soaring.

A rate change needs approval of the PACE board of trustees, which is made of superintendents, risk managers, chief financial officers and other employees from school districts across the state. Last school year, PACE returned a total of $700,000 to its districts, something McCann said showed the program had district’s best interests in mind.

“The trustees sharpen their pencils and keep things running as tightly as they can because they want to save money for their districts,” McCann said.