Schools Seek Return of Money From Trust

Orange Unified School District trustees have voted to seek a $2-million reimbursement from the teachers union health benefits trust for premiums that some trustees say were overpaid.

The board directed Assistant Supt. Malcolm Seheult, who also sits on the board of the teacher benefits trust, to request that the trust’s board return the bulk of its reserve fund to the district.

Seheult advised against the move, however, saying it would put him in the “intolerable” position of trying to represent the district’s interests when they might not be consistent with those of the trust.

The trust’s charter, incorporated into collective bargaining agreements, states that “no part of the fund shall revert to the district or the union,” Seheult said.

The Orange Trust, founded in 1985 to handle medical benefits for 1,800 teachers, has been the subject of a yearlong investigation by community activist Kathy Moran, who took her concerns to the district late last year.

Moran said the district has been paying the maximum benefit for each teacher, whether the employee belongs to an HMO or a more expensive personal health-care plan.

The union--the Orange Unified Education Assn.--maintains that its practice is standard and is a legitimate means of administering the trust.

David Reger, president of the union and a board member of Orange Trust, has said that allegations of overpayment are part of a “witch hunt” by anti-union activists.

Some trustees voted against the move too, saying that a potential unfunded liability of $168 million in its employee retirement plan is a far more serious issue that should be addressed first.

“In the sense of a larger problem, this is a freckle on the elephant,” Trustee Robert H. Viviano said of the health trust issue.