Coos Bay finance director warns PERS rate jump and capital-timing will squeeze next year’s budget

Coos Bay SD 9 — The district’s finance staff told the school board that a completed audit and unusually high capital-project beginning balances leave the district in better shape than budgeted, but an expected PERS rate increase and the timing of bond and grant invoices will put significant pressure on next year’s budget.

Marina (staff member — finance) said auditors delivered a completed audit with “no errors or findings” by the Dec. 31 deadline and that the district’s general fund began the year with a larger-than-expected balance. “We did end last year with a $445,000 beginning fund balance that is higher than what we budgeted,” she said.

But Marina told the board the PERS employer-rate increases recently released by the system will raise the district’s personnel costs substantially. “Just based on December payroll calculation alone, we're looking at about… $72,000 a month, for almost $855,000 annually next year,” she said, summarizing the district estimate of the first-rate change.

Why it matters: The district funds roughly one-quarter to one-third of each employee’s payroll costs through retirement contributions; an abrupt rate rise translates directly to recurring operating costs. Marina said board members should plan that salary negotiations will be more expensive because wage increases raise the district’s PERS liability.

Capital and grant timing: Marina also described an unusual timing pattern that left the capital projects fund with an increased beginning balance — roughly $3.6 million higher than budgeted — largely because of invoice timing and the way prior-year capital spending was coded. She said that invoices for the Millicoma HVAC and other bond-funded work carried past June 30, and that the district will propose a supplemental budget to absorb planned spending before the fiscal year-end. “We will have allocations in our supplemental budget to allow us to spend all that bond funds and get the Nalcoma project done,” she said.

Marina warned that some grant and special-revenue rules now require spending by June 30, which also forces a supplemental budget to increase allocations for SIA/ESSER-type funds and avoid audit flags. “We’re going to have to do a supplemental budget just to allow us to spend all of that and not go up budget allocations,” she said.

Enrollment and revenue outlook: The district reported continuing enrollment declines that will reduce next year’s state school fund payments. Marina said the district has already reported an estimated membership drop of about 32 students for next year and that the district “is expecting a decrease of about 32.” The district will receive the official state school fund estimate in March.

Next steps: Staff told the board they will present a supplemental budget to increase allocations for special revenues and bond projects and that they plan to delay some discretionary transfers until the March state estimate is available. The board signaled it will review the supplemental request and the administration’s recommended capital priorities before any large transfers are executed.

What the board acted on: The board approved the meeting’s consent items and adopted the district budget calendar for 2025 (by acclamation). No direct vote was taken on transfers or supplemental budget authority; staff said those will return to the board for action.

Ending note: Finance staff asked board members to consider capital priorities before the March supplemental request. Marina said the district will aim to present a recommended spend plan for the roughly $6.6 million of additional capital resources identified in current projections.