Teacher retirement costs raise concerns
In the ever-tense climate of school budget crunches, Willows Unified School District continues to try to find ways to cope.
At Wednesday night's school board meeting, trustees discussed lifetime benefits for retirees and the impact on cash flow.
Shelley Amaro of the Willows Unified Teachers Association suggested the money spent on lifetime benefits could be used "for survival of the distract."
Post-retirement benefits cost the district $529,000 a year, according to Betty Skala, director of business services. That includes as much as $116,000 paid in medical insurance benefits. The cap for coverage for classified employees is $11,611.
When teachers retire, the insurance benefit also rolls over for their spouses. Skala noted that when teachers retire at age 55, they get 10 years of medical coverage. At age 65, Medicare kicks in.
"There is a monumental cost to this district. It is a very generous package," Skala said.
Board President Sherry Brott said she "sees this as a liability to our district, especially for age 55 retirees."
She recommended finding out what packages other school districts offer and continuing the discussion when more information is available.
The biggest concern is the longterm impact of lifetime benefits on the overall budget.
Skala said that state revenues are down again, noting "it's nothing we haven't heard.
A recent article in the California School Boards Association newsletter suggested, "there could be more cuts" and "more economic challenges for the state and schools," Skala reported.
"We need to be prepared," she said.
She already is concerned about the cash situation.
"In August, we will be short because the state is not giving us the cash" it normally would — the result of state cutbacks, Skala said. Right now, "we are using reserves to balance the budget and that causes no cash flow."
"Using the reserves depletes the reserves and cash," she added.
Randy Jones, finance director for Glenn County Office of Education, said "we are looking at a countywide solution," but details have not been worked out.
If Willows Unified is not able to overcome its budget woes and runs out of cash, it could have to take out a loan and fall into state receivership, Skala said.
In receivership, the state's Fiscal Crisis and Management Assistance Team takes over, with a goal "to get districts back on track."
Board member Susan Domenighini commented that "the state is not giving us cash, then will put us in receivership."
Contact Lydia Harris at 934-6800 or lharris@tcnpress.com.
