History

In 1935, a provision to provide Unemployment Compensation benefits for workers temporarily unemployed through no fault of their own was signed into law. Effective January 1, 1978, this provision was amended to extend coverage to government agencies. With this extension of coverage came costs to school boards which continued to escalate.

 
Dr. Dan Tollett, Executive Director of the Tennessee School Boards Association proposed that the TSBA lead in establishing a separate entity to help school boards to reduce unemployment costs by lowering rates and providing cost management services to local school board systems.  The TSBA Board of Directors supported the proposal.
 
The Beginning
 
On July 1, 1980, Peggy Walters (Maury County), Dr. Merlin L. Cohen (Union City), and Sue N. Puckett (Jernigan) (DeKalb County) signed an Agreement and Declaration of Trust officially creating the Tennessee School Boards Insurance Trust and providing to seven trustees exclusive authority to govern the Trust. The seven school board members selected from the TSBA Board of Directors to become the charter trustees included John Franklin (Chattanooga), Allen Watts (Rutherford County), Peggy Walters (Chairman), Dr. Merlin L. Cohen , Bill Ross (Madison County), Billy Ray Vinson (Hardin County) and Sue N. Puckett. TSBA Executive Director Dr. Dan Tollett was asked by the trustees to serve as Trust Administrator.
 
The Trust was designed as an umbrella organization under which any type of insurance services to local school boards in Tennessee could be offered. Of the seven school boards of the charter members of the Tennessee School Boards Insurance Trust, only two, DeKalb County and Hardin County, actually became members of the Trust.
 
The trustees selected Gates-McDonald, Inc. to help set up the Trust and to provide a series of regional meetings with school boards to explain the new concept to them. Kelly Potter and Woody Hillard of Gates-McDonald joined TSBA staff members, Dan Tollett and Wanda Little, in conducting the sessions.
 
At the time most school boards in Tennessee were tax-paying boards. Under this plan, the state collected 1½ % of taxable payroll from each local school board and in turn paid unemployment claims against the board. The Tennessee School Boards Insurance Trust began by reducing the rate paid by local boards, most by 50%, thus significantly cutting the cost to the school boards that became members of the Trust.
 
Thereafter, trustees established a formula for determining individual rates for each member board based upon that board’s unemployment claims experience. In December, 1980 with a membership of 40 systems, the total fund stood at $119,363.59.
 
The Vision
 
Dr. Tollett articulated a vision of a Trust which would eventually be able to pay all costs for unemployment from wise investment. Trustees adopted the vision and even though the overall percentage of contributions from boards continued to decline, the board of trustees began to invest the funds held in reserve. The trustees’ commitment to the vision was supported by member boards since premiums were lower than they had been paying before the Trust was formed.
 
 As the reserve of the Trust started to grow, trustees considered all options for obtaining maximum returns on Trust investments. Bill Peerman, a professional investment consultant, went to the Department of Commerce and Insurance to investigate the investment options available to the Trust. He found no prohibition against investing unemployment compensation funds in the stock market. However, there was a prohibition for investment of insurance funds such as worker’s compensation funds that may be established for local school boards. The trustees decided not to bring insurance programs into the Tennessee School Boards Insurance Trust.
 
Narrowing the Focus
 
The first and only program ever offered through the Tennessee School Boards Insurance Trust was unemployment compensation. Therefore, the Trust became known as the Tennessee School Boards Unemployment Compensation Trust.
 
Support for TSBA
 
In 1985, the reserve in the UCT had grown substantially to $1,512,449.00. Since the UCT was housed at the TSBA offices, the UCT trustees voted to loan TSBA $180,000 to use in completion of the TSBA headquarters building. In 1985, TSBA repaid $36,500 of the loan and the trustees agreed to convert the remaining $148,500 to a lease whereby TSBA Board of Directors agreed to provide three offices in its headquarters building for the UCT for 99 years. Trustees at the time of that action were: Charles Bridwell (Sullivan County), John Franklin (Chattanooga), Nancy Holland (McKenzie), Sue Puckett-Jernigan (Dekalb County), Dr. William Hoover (Paris), Judy Toombs (Wilson County) and Billy Ray Vinson (Hardin County).
 
In 1992, the trustees voted to fund the building of a board development center and risk management offices as an addition to the TSBA headquarters. The addition cost approximately $450,000 completely funded by the Unemployment Compensation Trust. Trustees at the time of the vote included Patricia Gruenewald (Haywood County), Roger Greene (Hamblen County), Jim Mansfield (Warren County), James Neely (Huntingdon), Christine Howard (Covington), Becky Jaquish (McMinn County) and Dr. Sam Winfree (Putnam County).
 
In 1994, Kristi Coleman began to handle financial affairs for the UCT. She worked closely with professional money managers to monitor trust investments. Significant growth of trust funds occurred during this period. Because of the success of the Unemployment Compensation Trust and the growth of the reserve fund due to wise investment, the trustees determined that recruiting additional school boards for membership in the UCT would be disadvantageous to the member school boards that had joined the trust early. At that time, membership had reached 54 school boards including TSBA.
 
Name Change
 
On March 31, 2005, a new Intergovernmental Agreement became effective which officially changed the name of the Trust to the Tennessee School Boards Unemployment Compensation Trust (UCT). It also changed the trustee selection process from appointment by the TSBA President to election by the Trust membership. It provided for two trustees to be elected by the members in each of the three grand divisions of Tennessee and a seventh trustee to be elected at-large. The 2005 Intergovernmental Agreement required that each trustee be a member of a school board holding membership in the Trust.
 
TSBA Breaks With UCT
 
In 2005, the leadership of TSBA asserted that TSBA owned the UCT and it could use the funds in the Trust for the benefit of all members of TSBA—not just the members of UCT. The attorney general issued an opinion that TSBA was not a governmental entity and as a result could not own or participate in UCT. A second legal opinion from the Trust attorney held that TSBA could no longer receive sponsorship fees from the UCT unless it provided something of value in return. UCT trustees expressed support of TSBA and generously offered to provide $85,000 annually to sponsor TSBA activities that would relate in some way to school board responsibilities concerning employment, unemployment or personnel management.
 
TSBA President John Conley of Washington County, who participated in the trustee meeting, rejected the offer and informed the trustees that TSBA had no interest in such sponsorship. He insisted that the UCT pay TSBA $85,000 for the use of TSBA’s name although the only use UCT made of TSBA’s name was to require that members of the UCT be members of the TSBA. At his insistence, the UCT trustees dropped that requirement and discontinued the annual $85,000 sponsorship payments to TSBA.
 
Trustee Elections
 
In 2005, David Jones of Hancock County became the first trustee elected at-large by a vote of all member boards. Ron Britt of Wilson County, representing Middle Tennessee, became the first trustee to be elected by the membership of a region. In 2006, Camille Lashlee (Houston County) representing Middle Tennessee, Jasper Taylor (Crockett County) representing West Tennessee, Tammy Baird (Hawkins County) and Roger Greene (Hamblen County) representing East Tennessee were elected by the member boards in their respective regions. In 2007, with the election of Joey Cooper (Benton County) representing West Tennessee, the Board of Trustees became entirely comprised of elected members.
 
UCT Purchases Office Space
 
In 2007, trustees voted unanimously to purchase an office space in Hunt Club between Hendersonville and Gallatin and to employ a director of Finance and Administration full-time. Kristi Coleman became the first full-time employee of UCT. The new office facility provided an opportunity for the UCT to collect and display information about the history of the UCT and the people who contributed to its success. The UCT trustees held its first meeting in the new facility in October, 2007.
 
Employee Development and Appreciation Program
 
In 2008, the trustees initiated the Employee Development and Appreciation Program to assist local school boards that belonged to the UCT with plans for employee recognition, appreciation and development. Trustees also adopted the name "Utrust" as a nickname for the UCT and adopted the following motto: "Appreciating, supporting, and developing school employees."  During this year, a communications and media specialist was hired to help oversee the new program.
 
Maintaining the Vision
 
Through the Unemployment Compensation Trust local school boards in Tennessee have been able to maintain stability in unemployment compensation costs by paying low annual rates to the Trust and having all claims paid by the Trust. Through wise investment and sound management practices the Unemployment Compensation Trust has rebated premiums to member systems for eight out of the last ten years, thus bringing significant savings to each participating school board. In fact, over the last ten years, the Utrust has paid out over $4 million more than member boards have paid in premium. At the same time, reserves of the Trust have grown significantly.