Report: School District Payment Rates for Teacher Pensions, Reserves will Fall
Pension costs continue to place a burden on School District budgets as operating reserves are reduced. School Board will review the budget on March 15, 2017.
The Piedmont Unified School District (PUSD) Budget Advisory Committee meets about five times each fiscal year to examine and discuss PUSD’s budget. On March 2, 2017, at 3:30 PM in the District Conference room, Assistant Superintendent Song Chin-Bendib made a presentation to the committee covering PUSD’s budget and changes during the 2016-2017 fiscal year, as well as the multi-year projection report looking ahead to the 2018-2019 fiscal year.
In terms of changes since the first interim of the 2016-2017 Fiscal Year, both revenues and expenditures have increased. Revenues increased by $378,166 due to both state and local funding. There was an additional $109,000 from state funding as parts of the College Readiness Block Grant, ROP funding, and special education funding. Local revenues were generated by school athletics, various Piedmont High School ASB funds, and fundraising groups such PAINTS. Expenditures also increased, by $369,689, as a result from shift in certified and classified salaries because of vacancies in the payroll, employee benefits especially healthcare, and services, operating expenses, and capital outlay.
Moving on to look at the multi-year projection report, we looked at the District reserves which are required to be around 3-4%. We have the required reserves for the 2016-2017 fiscal year, however already in the 2017-2018 fiscal year the budget projects only 2.7% reserve (short $108,602), and by the 2018-2019 fiscal year to only have about 1% reserve (short $796,384). These shortages starting in the 2017-2018 fiscal year result from assumptions provided by the state, and the most recent information projects less increase than was originally expected. Furthermore the multi-year projections show these shortfalls to grow in the 2018-2019 fiscal year. These issues are stemming from increasing School District payment rates for CalPERS and CalSTRS teacher pension programs, as a result of the CalPERS board voting to lower the expected rate of return from their investments.
Some options to confront the 2017-2018 fiscal year shortfall include waiting until May to confirm if the Local Control Funding Formula (LCFF) reduction projections are in fact true, expenditure reductions, or revenue enhancements. The Piedmont School Board meeting on March 15, 2017 will review the budget and address deficits.
After the meeting came to a close, I had the opportunity to speak with Amy Aubrecht, treasurer of the Wildwood Parents Club, to gain some additional insight on the effects of the Piedmont District budget. Aubrecht’s duty as treasurer was to understand the bigger picture of the Piedmont budget so that she is able to wisely and effectively support her local school budget. In regards to the upcoming shortfall in funding, Aubrecht knew and predicted some of the significant problems with the CalPERS pension funds, and now says her priorities are to maintain all the core programming at Wildwood. When delegating money, she plans on being cautious and conservative, but is not too alarmed yet. Aubrecht predicts that much of the parent club money will go to Tier II funding for some of the discretionary spending that might otherwise get cut.
It is crucial that we as the Piedmont community are well aware and informed so that we can contribute to maintaining and improving our schools and city.
by Kailee Lin, Piedmont High School Senior
Editors Note: Opinions expressed are those of the author.
