PERS and school district
The rate McMinnville School District pays for PERS will jump a whopping 61.3 percent next biennium, according to Finance Director Susan Escure.
The rate will rise from the current 12.12 percent to 19.4 percent, costing the district an estimated $2,133,000 more a year, Escure said. That’s five times the amount — less than 4 percent — it paid into the Public Employees Retirement System in the 2009-11 biennium.
While the 61.3 percent increase is huge, it wasn’t unexpected, Escure said. She said the district, like most governmental bodies around the state, knew it would be facing a major PERS rate hike in 2013-15.
And as bad as it is, it might have been worse. The district has saved more than $8 million over the years by issuing bonds in 2002 and 2004 to cover pension costs.
McMinnville joined a group of school districts that issued bonds in hopes of earning rates of return that exceeded their PERS debt service. And most districts, including McMinnville, came out well ahead on the move.
Without having the bonds in place, Escure said, McMinnville’s rate for 2013-15 would be 26 percent of each eligible employee’s salary instead of 19.4 percent.
Escure plans to present a report to the McMinnville School Board on the district’s PERS rate picture at its Monday meeting. The public session is set for 7:30 p.m. at the district office, 1500 N.E. Baker St.
The full impact of the increase has not yet been determined, but it could force the district to eliminate jobs. Administrators and the budget committee will look at the increasing cost of PERS, along with state revenue projections, enrollment estimates and program and staffing needs, as they develop a spending plan for 2013-14 next spring.