School system working to mitigate $634 million liability for retiree benefits
The board has nearly
The school board has contributed
Binder ran 27 scenarios to see how much funding would be required to get to a certain level of the OPEB trust. The minimum amount ended up to be about
The board contributed about
"I had hoped we'd find some good numbers here that we could put together a good plan for the board to ramp up to some type of funding, but unfortunately we did not find those results. It was quite eye opening," Pellegrino said.
"In a phone call with Kevin, he said 'you're either going to have find a way to fund this, or you're going to have do something to mitigate it.' The likelihood of being able to fund this at
This could mean that school board may have to change its policies on what it promises its employees. The school board could change the length of time employees have to work in order to receive the benefits, or change the percentage of the benefits the system pays for.
"We're not in an immediate crisis situation; we've put the future in a crisis," said Board President
With people living longer and medical costs increasing, OPEB costs are expected to quadruple in the next 30 years, increasing from
"Every time we review this, it's very depressing," said board member
Binder said he wouldn't recommend the board attempt to get to 100 percent funding, but he would expect them to make some sort of contribution.
"If you want to deliver on promises and you have people making financial decisions based on these promises, I think you do need to have some money set aside," Binder said. "I think I can say professionally, it's more than 50 percent."
Young used the analogy of an individual preparing for retirement.
"If you wait to save for retirement until you're 50, you're going to have to put [away] a lot more money than if you were to start when you're 20. And we're getting to be about 50," Young said.
"We're getting to a bit older than that," Binder responded.
Board member
"I don't want to dwell," Miller said. "But I hope we're ready to listen and have a serious conversation about this."
The board reached a consensus to have a workgroup come forward in a few months with options for the board to mitigate the responsibility. Superintendent
It's unlikely to make a decision before the next budget cycle, Pellegrino said. It would possibly be ready for the 2020-2021 school year budget.
"It's going to take quite a while," she added.
Binder added that he didn't think the liability would affect the county's
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