City CFO says pension-bond calculations mean a roughly $11.4 million school pension deduction in FY27
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Summary
City Chief Financial Officer Troy Clarkson told the Brockton Public Schools finance subcommittee that issuing the final tranche of pension obligation bonds will leave an estimated $11.4 million pension deduction attributable to the schools in FY27; members pressed for clearer documentation, historical comparisons and confirmation from DESE.
Troy Clarkson, Brockton's chief financial officer, told the finance subcommittee on April 7 that the city's pension-obligation bond program and a planned issuance of roughly $59'60 million will produce an estimated $11.4 million deduction from the school department's FY27 net school spending figure.
Clarkson said the committee's materials compare three calculations: an Open Architects net school spending estimate of about $254.7 million, an actuary-based escalation that would have produced a roughly $30 million pension deduction absent the bonds, and the city's current estimate derived from underwriter amortization of the final bond issuance (the $11.4 million figure). "That if we had not issued pension debt, the FY '27 school budget would be $20,000,000 less than what it's going," Clarkson said, arguing the pension-bond program produced substantial savings.
The superintendent's consultant, TJ, explained the 62.4% share attributed to schools was derived from payroll-code analysis of non-teacher retiree costs: "we did, run the payroll pay codes ... came up with the 62, 62 and a half, like, that percentage," he said, and the team committed to share the recalculated figures with the committee and DESE.
Why it matters: the amount shown on the school schedule 19 drives the district's net school spending calculation for state reporting and local budget negotiations. Clarkson said the city is not seeking to "claw back" previously appropriated or transferred funds but is asking that future DESE reporting reflect the properly calculated deduction and that the committee reach consensus on the number.
Supporting details: Clarkson told the committee the city council authorized $360 million in pension debt in 2021 and that about $320 million has been issued to date. He said underwriter estimates and actuarial work support the city's third-column projection; Stifel underwriters produced the amortization schedules used in the estimate. Clarkson also told members the pension-bond program was projected to save about $95 million over 15 years and that the final debt service and exact school deduction will depend on interest rates and the precise amount issued when the city sells the remaining bonds.
Committee requests and next steps: members asked for clearer, earlier distribution of supporting materials and for historical comparisons showing how net school spending and school deductions would have differed had the full pension deduction been taken in prior years. Clarkson agreed to provide recalculated payroll/actuarial spreadsheets and to follow up with DESE and the Department of Revenue to seek recognition of the transferred funds and corrected reporting.
The subcommittee moved to continue the FY26 update for further discussion at the full school committee; the motion carried by voice vote.
