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District finance director warns PERS side-account corpus near exhaustion; $2M annual debt service remains
Summary
Finance director Scott Dollar told the budget committee that the district's PERS side account has been largely drawn down after 20 years of use, leaving the district exposed to a roughly $2.0M-$2.6M increase in pension costs starting July 1.
Scott Dollar, Cascade School Districtdirector of finance, told the committee that side accounts—debt issued two decades ago to prepay pension liabilities—have been largely used and that the district is now facing substantially higher PERS rates.
"We put in, $14,000,000 in our side account...we prepaid our PERS liabilities...we have a debt service on our PERS bond that's...about $2,000,000 every year," Dollar said, explaining that the corpus and market returns have been insufficient over time and that the side accounts were designed to taper off after roughly 20 years.
Dollar said the expected PERS rate changes will add approximately $2.5 million next year under current assumptions and that staff are exploring new side-account options only if bond-market conditions become favorable. He warned that side-account strategies carry timing and market risk: earlier groups that timed bonds poorly experienced lasting negative outcomes.
Committee members discussed the trade-offs between continuing to rely on side accounts, pursuing a new general obligation bond for facilities, and using reserves. The finance director described a planned moderate use of a PERS reserve fund (about $3.1 million currently) and proposed using up to $2.0 million to smooth next yearcosts while monitoring bond markets for a possible future side-account action.
