Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Finance Update topic
No spam. Unsubscribe anytime.
Finance briefing: audit timing, proposed removal of 3% retirement contribution and health‑insurance rate pressures
Summary
District finance staff told the committee the audit field work is complete and auditors will present Oct. 28; staff reviewed a Senate bill that would eliminate a 3% employee post‑employment contribution (effective Oct. 1, 2025 if enacted), a $181 million state reimbursement pool, and January health‑insurance rate increases that will disproportionately affect employees on Mesa plans.
At the Grand Rapids Public Schools finance committee meeting on Sept. 24, district finance staff reviewed the August financial statement for fiscal year 2024–25, described the audit timeline and outlined several statewide policy changes that could affect district budgets and employee take‑home pay.
Miss Krebs told the committee the district completed audit field work about two weeks earlier and auditors plan to present results at the Oct. 28 board work session. "At this point I'm not aware of any issues, findings," she said.
She summarized pending state action on the school‑aid budget: the state’s June budget included a one‑year reduction to a funding rate, and the state Senate recently approved a bill that would make that reduction permanent. Miss Krebs said the Senate bill would also eliminate a 3% employee contribution that certain retirees have paid since 2012. "Their effective date isn't until 10/01/2025," she said, meaning the contribution would remain in effect for the 2024–25 year unless the Legislature changes the timeline.
The state also created a new categorical (referred to in the meeting as '147 gs') with roughly $181 million statewide to reimburse employees who paid the 3% contribution. Miss Krebs cautioned that last year employee contributions nationwide were about $200 million, so the $181 million pool may not fully cover all reimbursements and could require proration. She added allocations will be based on salary data reported to the state in the prior year, which could mismatch current pay and contributors and complicate district calculations.
Miss Krebs noted a further complication: because the state aid would be paid as a reimbursement, any payments to employees would be taxable income, reducing the net benefit employees receive.
On benefits costs, Miss Krebs said the district’s Mesa health‑insurance plans will see rate increases of about 12.3% to 14.7% beginning in January; plans on the West Michigan health‑insurance pool will rise about 7.2%. She said hard‑cap rates are increasing only 0.2% under current assumptions. The staff discussed possible scenarios, including increasing the hard cap or moving to an employer/employee percentage split, and the likely budgeting and behavioral effects if premiums are paid as a percentage (employees may choose higher‑cost plans when the employer pays a set share).
The Chair closed the meeting after the briefing; auditors will present at the Oct. 28 work session and staff said they expect to know district reimbursement estimates from the state later in the fall.
