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Board hears PERS rate increases and reviews pension-bond status as budget pressure
Summary
Management told the board that unfunded PERS rates are rising (tier 1 to ~24.84; OPSRP/general service about 21.66) and that the district’s total debt dropped to about $6.9M; members discussed how PERS assumptions and past bond decisions affect budgeting and considered evaluating rebonding options.
Cece, the district’s financial lead, walked the board through key audit-era financial highlights and updated PERS (Public Employees Retirement System) assumptions the district must use when calculating labor costs. She said unfunded PERS rates will rise — citing tier 1 moving toward 24.84 (from about 14.41) and the general-service/OPSRP rate near 21.66 — and described this as roughly a 10% increase in overall payroll cost exposure.
Cece explained the district’s pension-bond strategy: the district’s outstanding debt on 06/30/2024 stood at about $6.9 million (down from $7.8M the prior year) due to principal payments, and the 2004 pension bond has produced multi-year savings; however, recent lower investment returns and rising PERS rates reduce the margin between returns and borrowing cost. Directors discussed prior consideration of rebonding (withdrawn in 2022 because of climbing interest rates) and asked staff to evaluate whether a future bond would be advantageous, emphasizing the need for a detailed analysis that factors current interest rates, PERS assumptions and projected savings.
Management said staff will solicit evaluations from firms and return with an analysis that quantifies the likely budgetary impact and interest-rate sensitivity so the board can decide whether to pursue bond relief.
