Providing free, lifetime health coverage to a school district employee was so unusual that the Missouri State Auditor called it "questionable and unnecessary". But that's exactly what the St. Joseph School District agreed to in its final contract with former Superintendent Dan Colgan.
On Monday, that benefit ended.
The district announced that the Board of Education voted unanimously in executive session a week ago to rescind the benefit that was included in Colgan's 2004-2005 contract. The former superintendent, who would go on to be elected to the school board, retired in 2006. Colgan was forced off the board earlier this year.
“The Board of Education has taken the legal recommendation that they have the right to stop
payments,” said Superintendent Robert Newhart in a statement. "This reflects the changes in culture
we are undergoing; it’s another step in the right direction.”
Colgan's contract called for “medical insurance for life” and clarified that it “will be secondary after Medicare coverage becomes available” after his retirement.
The auditor's report in February said the district paid $4,600 for Colgan's health coverage in 2013. But an examination of district documents revealed a much higher cost. According to a summary from the district’s business office obtained through the Sunshine Act, the district paid for Colgan's monthly Medicare benefit, his additional Part B benefit and a Part D income adjustment. That was an additional $3,011 in 2013. So the total bill to taxpayers for Colgan’s health care in 2013 was $7,642. Since 2011, documents show, the district has paid $20,329 for Colgan’s health coverage.
"This agreement should have never been offered," says St. Joseph School Board member Chris Danford. She suggests Colgan should repay all of the money spent by the district on his health coverage since retirement. "That would be the right thing for Dr. Colgan to do."
The district says it is exploring whether previous payments can be recouped from Colgan.
This is the second blow to Colgan's very comfortable retirement benefits. Last week the Missouri Public School Retirement System (PSRS) said it was investigating Colgan's monthly retirement payment after it was revealed that he might have used questionable methods to inflate his salary before retiring. PSRS says it could reduce his monthly benefit and sue to recover any overpayments the agency believes improper.
Colgan did not immediately return a call seeking comment.
Sam Zeff covers education for KCUR 89.3. He's also the host of KCUR's Statehouse Blend podcast. Follow him on Twitter @samzeff
