After much study of the data provided by Mr. Boasberg, our conclusions paint a less-than-rosy picture. It is true DPS is paying what is required by the state legislature under Senate Bill 09-282. Our position, however, is focused on the entire piece of legislation, not just today’s good news.
While SB 09-282 allows DPS to take a deduction based on its previous financing of pension-related debt, it also calls for a “true-up” in 2015 to ensure DPS’ division of PERA is 100% funded by 2040. This requirement is established by statute in SB 10-001.
If not for the deduction included in SB 09-282, DPS would be contributing $90 million to PERA in DPS’ fiscal year 2010/2011. Instead, we’re paying $17.8 million, which the legislature allows. DPS is able to balance its 2010/2011 budget because of the SB 09-282 deduction. It can deduct $72 million from its PERA contributions to do so.
However, in 2015, PERA will make an actuarial determination if our contribution rate will meet the long-term funding requirements in SB 10-001. This true up is also established by SB 09-282. If PERA determines DPS will not be fully funded by 2040, it can raise our contribution rate. This risk is at the heart of my concern about the 2010/2011 budget.
On June 25, 2010, David Suppes, DPS’ COO, provided a spreadsheet showing what we plan to contribute to PERA over the next 5 years. Jeannie Kaplan’s figure of $369 million is based on that spreadsheet. Unfortunately, her number is a best-case scenario for DPS’ future budgets. In fact, if the actuarial amortization of 8% is applied to this number, as well as the current pension system’s unfunded liability of $386 million, DPS will face a $1 billion unfunded liability in the DPS division of PERA by 2015.
We have been asking for the game plan to soften the blow when we arrive at the 2015 cliff. We all will have to come up with a solution for this problem. However, the issue has not been adequately discussed during public board meetings, and information about the fiscal future of our schools has only been given to board members after repeated prodding. After all, the elected school board members will be held accountable for the fiscal state of the Denver Public School district, not the people who work for them.
Mr. Boasberg’s continued unresponsiveness to requests for information and his behavior while interacting with members of the board are cause for concern. We, as well as the public, are aware of his eye rolling and impatience with our questions. However, instead of maligning the character of his superiors, he could show us how we are wrong. We have asked for a full accounting of the long-term pension situation. We received a spreadsheet from the COO in response, and we have used the numbers in that spreadsheet to assess the situation facing our schools. This situation should be a great concern to any member of the school board, as well as to the people of Denver. We believe, therefore, that this is why dissent is important.
Because we believe that a fully transparent fiscal picture is the right of every taxpayer of Denver, we will continue to ask questions about DPS’ financial position now and in the future until they are answered. It is our responsibility as Denver’s duly-elected representatives to protect the future of our public schools.
Here are some videos from recent Board meetings around the pension situation.
Comments from the former head of the DPS retirement system:
Discussion on 6/17:
Comments from the last meeting on 6/30 (this is very long):