COMPUTATION OF INSURANCE FRINGE BENEFITS FOR SCHOOL DISTRICT EMPLOYEES

DISTRICTS ‑- SCHOOLS ‑- EMPLOYEES ‑- INSURANCE ‑- COMPUTATION OF INSURANCE FRINGE BENEFITS FOR SCHOOL DISTRICT EMPLOYEES

Read together, the provisions of RCW 28A.58.095 and the 1983-85 Biennial Operating Appropriations Act do not permit school districts to pool the total amount of money allowed for certificated and classified employee medical insurance benefits in order to provide each employee, regardless of the class of employees to which he or she belongs, an equal employer insurance benefit contribution.

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                                                               September 2, 1983 

Honorable Frank J. Warnke
St. Sen., 31st District
29457 51st Avenue South
Auburn, WA 98002

Cite as:  AGO 1983 No. 18                                                                                                                

 Dear Sir:

             By letter previously acknowledged you requested our opinion on a question which we paraphrase as follows:

             Do the provisions of RCW 28A.58.095 and the 1983-85 biennial operating appropriations act permit school districts to pool the total amount allowed for certificated and classified employee medical insurance benefits in order to provide each employee, regardless of the class of employees to which he or she belongs, an equal employer insurance benefit contribution?

             For the reasons set forth below, we answer this question in the negative.

                                                                      ANALYSIS

             Your question involves the provisions of RCW 28A.58.095, commonly known as the "school district salary and compensation limitation law," as implemented by means of the identification of allowable salary and compensation (including fringe benefit) levels within the current biennial operating appropriations act, chapter 76, Laws of 1983, 1st Ex. Sess.  RCW 28A.58.095 reads, in pertinent part, as follows:

                          [[Orig. Op. Page 2]]

             "(1) Every school district board of directors shall fix, alter, allow, and order paid salaries and compensation for all district employees.  No school district board of directors may grant salary and compensation increases from any fund source whatsoever in excess of the amount and or percentage as may be provided for employees as set forth in the state operating appropriations act in effect at the time the compensation is payable.

             "(2) Increases in school district employee fringe benefit contributions by school districts shall be included for purposes of determining salary and compensation increases under this section if contributions to fringe benefits provided by a district exceed or, by virtue of the increase, will exceed the amount provided for fringe benefits in the state operating appropriations act in effect at the time the compensation is payable.

             ". . ."

             This substantive statutory provision, in effect, means that the maximum salary and compensation levels at which school district employees may be paid are governed by whatever amounts and percentages are set forth in the biennial operating appropriations act in effect at the time of payment.  But since, as a general rule, amounts and percentages are expressed in such an act in the form of an appropriation and allocation of funds, their expression concurrently serves both to appropriate funds and to limit salary and other compensation levels for the purposes of RCW 28A.58.095, supra.  And, in turn, each biennial operating appropriations act must thus be examined in order to determine the nature and extent of the salary and compensation controls imposed for the life of that act.

             When we turn to the current 1983-85 biennial operating appropriations act, chapter 76, Laws of 1983, 1st Ex. Sess., we find, significantly, that certificated and classified employees (i.e., teachers and certain administrative personnel, on the one hand, and support personnel on the other) are treated separatelyand differently for purposes of the allocation of appropriated funds for employee medical insurance benefits.  Certificated staff compensation allocation levels are provided for in § 101 of the act which states, in subsections (1)(b) and (2)(b), that:  "[h]ealth benefits shall be calculated at the rate of $137 per month per certificated full-time equivalent staff units" for the 1983-84 and  [[Orig. Op. Page 3]] 1984-85 school years.  Classified staff compensation allocation levels are then separately provided for in the next section, § 102, which sets forth a similar method of calculating classified employees medical insurance benefits‑-with the exception that the $137 per month figure is premised upon the number of classified full-time equivalent (FTE) staff units generated by a school district.

             It might appear, at first glance, that although § § 101 and 102,supra, treat certificated and classified employees separately those sections do not also treat the two classes of employees differently due to the common $137 per month factor which is expressed in both sections.  There is, however, a distinct difference in treatment since the $137 per month figure is to be multiplied separately by the number of FTE certificated staff units generated by a school district, and by the number of FTE classified staff units generated by the district.  For, under administrative regulations promulgated by the Superintendent of Public Instruction, the method of calculating an FTE staff unit for each of the two classes differs substantially.1/

             Chapter 76,supra, then goes on to provide for an increase in the base amount of $137 per month per FTE staff unit for employee medical insurance fringe benefits allowed for by § § 101 and 102, supra.  See, § 103(3) which, without expressly distinguishing between the two classes of employees, provides for the allocation of insurance benefit increase funds for state supported staff during the 1983-84 year and 1984-85 school years as follows:

             "A maximum of $26,118,000 shall be distributed for insurance benefit increases for full time equivalent state‑supported staff as defined in section 98(1) of this act at a rate of $22 per month per full time equivalent staff unit in the 1983-84 school year and such amount shall be maintained in the 1984-85 school year."

              [[Orig. Op. Page 4]]

            Nevertheless, the allowable increase in medical insurance benefits thus identified by § 103(3) maintains the apparent scheme of separate and distinct treatment of the two employee classes due to the fact that an identifiable portion of the $22 per month allowable is attributable to the number of FTE certificated staff units generated by a school district and also due to the further fact that the balance is attributable to the FTE classified staff units generated by the same district.

             The combined effect of § § 101, 102 and 103(3), supra, separate and apart from allocating appropriated funds, is thus to identify (for the purposes of RCW 28A.58.095,supra) the allowable level to which a school district may increase employer-funded medical insurance benefit contributions for state supported certificated and classified employee groups; i.e., up to an average of $159 per month per FTE certificated staff unit for state supported certificated employees, and up to $159 per month per FTE classified staff unit for state supported classified employees.2/

             Question Presented:

             Against the foregoing backdrop let us now repeat your question for ease of reference:

             Do the provisions of RCW 28A.58.095 and the 1983-85 biennial operating appropriations act permit school districts to pool the total amount allowed for certificated and classified employee medical insurance benefits in order to provide each employee, regardless of the class of employees to which he or she belongs, an equal employer insurance benefit contribution?

                          [[Orig. Op. Page 5]]

            Let us also illustrate the issue thus raised with the following (over-simplified) hypothetical set of assumptions:

             (1) That the biennial appropriations act, as above explained, allows for employee insurance fringe benefits with increases included at the rate of $159 per month per full-time equivalent (FTE) staff unit;

             (2) That a certain small school district generates one FTE certificated employee staff unit and one FTE classified employee staff unit pursuant to the applicable formula;3/ and,

             (3) That the school district actually has three employees‑-one certificated employee and two classified employees.

             It will quickly be seen that the two FTE staff units generated by this school district would result in a total allowable monthly payment of $318 for employee insurance fringe benefits (two FTE staff units multiplied by $159).  In turn, there are two different ways in which this situation could, possibly, be handled.

             First, as contemplated by your question, the $318 allowance could be divided equally (i.e., pooled) among the district's employees with the result that each would receive a $106 monthly employer insurance fringe benefit contribution.  This method of allocation would not exceed the $318 total but it would result in an allocation of $212 to the two classified employees‑-which would be $53 more than the $159 generated by the district's one FTE classified staff unit.

             The other approach would be to allocate portions of the $318 to the two employee classes based upon the amount generated by the FTE staff units attributable to each class.  The result under this approach, in the case of our hypothetical example, would be to allow $159 per month for the subject district's certificated employee and $159 for the district's two classified employees for an average of $79.50 per classified employee.

                          [[Orig. Op. Page 6]]

            We believe, in response to your question, that the latter is the approach to employee salary and fringe benefit limitations which has been established by the current (1983-85) biennial appropriations act as above described.  In our opinion, it necessarily follows from the funding and allocation scheme provided for therein that compliance with the above‑quoted provisions of RCW 28A.58.095 (the "school district salary and compensation limitation law") must be accomplished separately for certificated and classified employee groups.4/

             Stated differently, the provisions of the current biennial operating appropriations act contemplate that a determination must be made for the purposes of RCW 28A.58.095, supra, as to whether the amount of health insurance fringe benefits‑-with increases‑-which is granted to either of the two classes of employees exceeds $159 per month times the particular number of FTE staff units attributable to the class.  That, we believe, effectively precludes the pooling approach described in your question‑-under which, instead, the allowable total amounts for each class or subclass of employees would be lumped together and the total then allocated in equal amounts to certificated and classified employees without regard to whether the amount allocated to a particular class or subclass of employees exceeds $159 per month times the appropriate number of staff units.  We thus must answer your question, as above stated, in the negative.

                          [[Orig. Op. Page 7]]

            We trust that the foregoing will be of assistance to you.

 Very truly yours,
KENNETH O. EIKENBERRY
Attorney General 

ROBERT E. PATTERSON
Assistant Attorney General