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District finance director warns of looming PERS costs that could hit budget in 2027–28
Summary
Finance staff told the Molalla River School District board the 2025–26 budget will need to absorb $800,000–$1,000,000 in PERS employer-rate costs and that side-account credits expire December 2027, creating the potential for a much higher PERS rate in 2028 if not mitigated.
At the Feb. 13 meeting, the district’s finance presenter briefed the board on the 2025–26 budget preparation and projected impacts from changes to the Oregon Public Employees Retirement System (PERS).
Mr. Campbell said his analysis shows the district’s 2025–26 employer PERS cost will increase by about $800,000 to $1,000,000. He told the board the district has relied in prior years on PERS 'side accounts' that provide a credit but that those accounts will expire in December 2027, which could push employer contribution rates much higher (Campbell cited an illustrative neighborhood of 30% starting January 2028). He described options under consideration, including exploring another round of PERS bonds if market conditions make that advisable, and emphasized maintaining conservative reserves.
Campbell said more detailed budget work and a plan will be part of the March budget-development agenda item. Board members asked questions about whether layoffs are expected; Campbell and the superintendent described conservative cost management, attrition and reserves as first steps and said they are not planning layoffs at this time.
The board discussed timing and options for protecting the district from sharp PERS cost increases and asked staff to continue analysis as the budget process proceeds.
