Unfunded Liabilities for Retiree Health Benefits a School District Fiscal Time Bomb!

Published: August 09, 2010 9 pages

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Findings and Recommendations 2 findings

Sacramento County school district boards are not knowledgeable about the ultimate long- term fiscal impacts the unfunded liability for retiree health benefits will have on their districts.

Related Recommendations (1)

1 Sacramento County school district boards and superintendents, with advice from actuaries and accountants, should immediately assess and quantify their long-term OPEB obligations and ramifications.

Sacramento County school districts have a variety of approaches in addressing the unfunded liabilities for contracted retiree health benefits. Some of those approaches include: · Creating trust funds or other funding plans but stopping all contributions to them due to current economic conditions · Creating trust funds and contributing to them · Ignoring the problem · Regarding the GASB standards as a “plan” when in fact it is only an accounting statement · Utilizing an annual pay-as-you-go approach to these obligations, relying on their general funds for retiree health benefits.

Related Recommendations (1)

2 School district boards must find means other than pay-as-you-go for funding these ongoing and increasing expenses.

Conclusions 21

CL1 Page 8

Sacramento County school district boards are not knowledgeable about the ultimate long- term fiscal impacts the unfunded liability for retiree health benefits will have on their districts.
CL2 Page 8

Sacramento County school districts have a variety of approaches in addressing the unfunded liabilities for contracted retiree health benefits. Some of those approaches include: • Creating trust funds or other funding plans but stopping all contributions to them due to current economic conditions • Creating trust funds and contributing to them • Ignoring the problem • Regarding the GASB standards as a “plan” when in fact it is only an accounting statement • Utilizing an annual pay-as-you-go approach to these obligations, relying on their general funds for retiree health benefits.
CL3 Page 8

Creating trust funds or other funding plans but stopping all contributions to them due to current economic conditions
CL4 Page 8

Creating trust funds and contributing to them
CL5 Page 8

Ignoring the problem
CL6 Page 8

Regarding the GASB standards as a “plan” when in fact it is only an accounting statement
CL7 Page 8

Utilizing an annual pay-as-you-go approach to these obligations, relying on their general funds for retiree health benefits.
CL8 Page 9

Mark Cornfield, Superintendent, Arcohe Union School District
CL9 Page 9

Scott Loehr, Superintendent, Center Joint UnifiedSchool District
CL10 Page 9

Steven Ladd, Superintendent, Elk Grove UnifiedSchool District
CL11 Page 9

Elizabeth Golchert, Superintendent, Elverta JointSchool District
CL12 Page 9

Patrick Goodwin, Superintendent, Folsom Cordova UnifiedSchool District
CL13 Page 9

Karen Schauer, Superintendent,Galt Joint UnionSchool District
CL14 Page 9

Daisy Lee, Superintendent, Galt Joint Union High School District
CL15 Page 9

General Davie, Jr., Superintendent, Natomas UnifiedSchool District
CL16 Page 9

Richard Hennes, Superintendent, River Delta UnifiedSchool District
CL17 Page 9

Ralph Friend, Superintendent, Robla School District
CL18 Page 9

Jonathan Raymond, Superintendent, Sacramento City UnifiedSchool District
CL19 Page 9

Pat Jaurequi, Superintendent, San Juan UnifiedSchool District
CL20 Page 9

Frank Porter, Superintendent, Twin Rivers UnifiedSchool District
CL21 Page 9

David Gordon, Superintendent, Sacramento County Office of Education Mail or hand-deliver a hard copy of the response to: Hon. Steve White, Presiding Judge Sacramento County Superior Court 720 9th Street, Dept. 47 Sacramento, CA 95814 In addition, e-mail the response to Becky Castaneda, Grand Jury Coordinator, at castanb@saccourt.com 67

Agency Responses 1

Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.

Sacramento Local Agency Formation Commission

June 07, 2010 • 5 pages • 6 responses • Score: +3 (+3, 0, 0) View Details ▾

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6 responses to findings and recommendations

0 ISD directors perform valuable service at minimal cost. However, this survey reveals inconsistent behaviors regarding compliance with sound management practices.

Response: Agree Score: +1

the Commission agrees with Grand Jury Finding 1.

1 Directors should review their by-laws everyfour years to assure compliance with applicable laws, ethical practices, and appropriate behavior.

Response: Unknown

Score: 0

The Commission cannot implement this recommendation because it does not have the power to force RLECWD to procure additional emergency and peak demand water supplies. However, the Commission will meet with CDPH to evaluate the progress of RLECWD towards satisfying the Compliance Order's requirements. <b>Grand Jury

0 Some ISDs grant monetaryawards for education and training; many have inadequate evaluation of employees’ degrees and certificates.

Response: Agree Score: +1

the Commission agrees with Grand Jury Finding 2.

1 All ISDs should encourage education and training, but should not make direct monetary(cash) awards for educational achievement.

Response: Unknown

Score: 0

The Commission cannot implement this recommendation because it does not have the power to force RLECWD to institute and maintain a backflow prevention program. However, the Commission, in conducting a Municipal Service Review (MSR) of RLECWD's operations will evaluate RLECWD's progress towards a backflow prevention program. Grand Jury

0 ISDs have not consistentlyconducted and reported required Independent Financial Audit Reports and management audits.

Response: Agree Score: +1

The Commission is unable to agree or disagree with Grand Jury Finding 5.

1 All ISDs must complete and file the required annual Independent Financial Audit.

Response: Unknown

Score: 0

The Commission cannot implement this recommendation because it does not have the power to force RLECWD to retain professional experts. However, the Commission, in conducting the MSR, will assess RLECWD's progress in this area and, if necessary, recommend RLECWD retain professional experts to stop the waste of assets. Grand Jury