Office of the Superintendent Sacramento*

R1

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. <b>Response to Recommendation 1.1:</b> Already Implemented. The Sacramento City Unified School District Board of Education has been discussing the impact of the unfunded liability for a number of years. In 2005-06, the Board made a decision to set aside funds to contribute towards the liability, even though the District was faced with financial constraints. While the funding stream was not on-going, the Board took the liability seriously and took early steps to begin addressing it. The District conducts an actuarial study every two years to quantify and project liabilities related to the District's other post-employment benefits (OPEB) obligations. The most recent December 1, 2008 actuarial study was presented to the Governing Board and the public on March 4, 2010. The next actuarial study will be conducted as of December, 2010 and the results of that study will similarly be presented to the Governing Board and the public. In addition to conducting periodic actuarial studies, the District is also conferring with its consulting actuary to determine the projected savings of recently negotiated retiree health benefits, and potential areas of change to create more savings. Sacramento County school districts have a variety of approaches in addressing the

R2

1 All school districts should have a funding plan and a schedule of contributions in their 2011-2012 budgets. <b>Response to Recommendation 2.1:</b> Will be Implemented in the Future. The District agrees that a funding plan is necessary. One component of the funding plan will be employee contributions and this component will begin with the start of the 2010-11 school year, based on a recent agreement with SCTA. The District begins the budget process for its 2011-12 budget in January. Given the instability and uncertainty in state funding of education and the record budget cuts that the District has been forced to absorb, additional funding commitments by the District in its 2011-12 budget will depend upon additional agreements and changes with our collective bargaining partners and the amount of new funding the District receives, through COLA to the District's apportionment, grants or other sources.