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Monroe School District’s $34m legal payout won’t come from its own cash

MONROE — The Monroe School District is offering a $34 million legal settlement to teachers and former students who were sickened at the Sky Valley Education Center by toxic chemical vapors emitted from the school’s old light fixtures and windowsill caulk. Children and teachers reported nausea and illness from being inside.
This huge payout is not being taken from the school district’s budget, though.
The school district, like most, pays to be part of a risk pool for its protection. The risk pool agency will be covering 100% of the $34 million settlement, a district spokeswoman and the pool’s executive director both said. It will be the largest loss the pool has ever paid.
The district and the pool decided together to settle on a small set of lawsuits representing 195 people before these lawsuits go to jury trials. A King County Superior Court judge agreed with the settlement plan in January.
Other lawsuits about the school against just Monsanto, which made a now-banned chemical sealant used inside, led to multimillion dollar jury verdicts against the company.
There are 195 people suing the school district and Monsanto as joint defendants. The plaintiffs include 117 former students and 48 adults connected to SVEC.
A judicial panel commented that how the district is being paired with Monsanto in these lawsuits would make it tough for the district.
The former light fixtures contained a chemical mixture known as a PCB, or polychlorinated biphenyl. PCBs have been banned in the U.S. since 1979.
Monsanto made the PCB-laden plasticizer, marketed under the name Aroclor, that was used for window caulking and within the ceiling light ballasts installed in the school.
During 2016, the district removed the caulk and replaced the light fixtures under a corrective action plan submitted to the local health district and the Environmental Protection Agency (EPA).
“We believe that settlement of the Sky Valley lawsuits within the limits of the District’s insurance was a prudent action under the circumstances. The settlement and the basis for it are part of the public record,” the district said in a statement.
Monroe’s settlement is the largest loss that the pool has ever paid, Washington State Risk Management Pool (WSRMP) executive director Deborah Callahan said. Who’s paying is the pool’s own insurance, as well as the third-party insurance companies which cover the pool’s loss claims under an industry practice called “reinsurance.”
It won’t prompt Monroe to lose its future coverage, either. Its  members have been kept apprised of the litigation throughout, Callahan said.
“The impact of this settlement will likely cause an uptick in the reinsurance premiums that WSRMP pays its reinsurance carriers. That increase is passed down to all members, not just Monroe, which is the basis of ‘pooling’ losses,” Callahan said.
The district paid $837,723 this year for its fee to be in the pool, district spokeswoman Tamara Krache said. That payment comes from the general fund.
For Monroe next year, the district “may pay a higher contribution (fee) based upon this loss,” Callahan said.
Each district’s pool membership cost is calculated by its actuaries based on how many students, buildings and other risks exist, and by its past losses, the pool said.
The pool is a non-profit, governmental risk pool that began operating in 1986. A majority of the state’s 295 school districts and dozens of other education-related governmental organizations are members in the pool.




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