Sean C. Morgan
Of The New Era
School District 55 has received good news in the form of an estimated $300,000 more in state revenues it expects to receive as bookkeeping is wrapped up for the 2004-05 school year.
Two factors remain that will determine the final tally for the district, but the district learned earlier this month that the final 2004-05 revenue it is receiving from the state increased, Business Manager Kevin Strong said. The Department of Education calculates its final 2004-05 adjustment for the school district after it receives all district audits.
In this case, statewide property tax revenue exceeded budgeted property tax revenue, resulting in some $300,000 more for the School District this year, Strong said.
The district is still waiting to find out if it will qualify for the special education waiver, Strong said. Approximately 18 percent, or 436 students, of District 55 students are in special education, but the state caps funding for special education to 11 percent of district student enrollment.
The state can waive the cap and provide additional special education funds, Strong said, but the district is still awaiting a decision from the state on the waiver.
The other factor that remains is that the Public Employees Retirement System is in the process of modifying the method used to spread its unfunded liability to employers, Strong said. The change is expected early this year and could benefit the district.
The change is necessary because employees hired after August 2003 belong to the Oregon Public Service Retirement Plan (OPSRP) and do not contribute to the unfounded liability, Strong said. “If nothing is done, this will become a significant problem because an increasing percentage of employees will not be contributing toward the liability.”
“The upcoming method change may also provide a positive benefit for employers, such as Sweet Home, that borrowed money to pay off their unfunded actuarial liability,” Strong said. Right now, no method exists for these employers to benefit if investment returns are good enough to generate an actuarial asset, the opposite of an unfounded actuarial liability.
The new method will allow employers with an actuarial asset to use the positive balance to offset the employer portion of the OPSRP costs, Strong said. Meanwhile, PERS rates will probably increase from 17 percent to 23 percent.
“So far, our stock market returns have exceeded our debt service costs,” Strong said of the district’s PERS bonds. “The investment returns have exceeded our interest costs. We need to remain cautious because there’s no guarantee that investment returns will remain positive in the future.”
The district is running about 100 more students this year than it did last year.
“The increase in enrollment is a positive,” Strong said. “Beyond that, we’re waiting to see how these (two) items impact us. We’re cautiously optimistic.”
The higher enrollment represents approximately $500,000 in state revenues, Strong said. Last year, the district received $300,000 more from the special education waiver.
“Due to the enrollment increase and the continuing healthy economy, our financial outlook appears better now than it did last summer,” Strong said.
The ending fund balance is budgeted at approximately $729,000.
Due to the enrollment growth, Strong expects the district to finish the year with more cash in hand than budgeted.
The district did not budget for the special education waiver, so assuming it is approved, it will increase the final number.
Strong expects more information within the next few weeks.