Retirement shortfall continues to haunt DV

By Anya Tikka
MILFORD — The proposed school tax increase ranged from 0.68 to 1 percent during budget discussions at the Delaware Valley school board meeting on April 21.
The increase depends on how deeply the board wants to dig the district out of its ever-looming retirement fund debt. The state's $60 billion shortfall afflicts schools across Pennsylvania.
DV's finance committee chair, John Fisher, keeps warning about the debt owed to the Pennsylvania Public School Employees' Retirement System (PSERS), which the state had grievously underfunded for years. The starved fund became a crisis after the housing bust brought on the recession of 2008.
DV’s business manager, William Hessling, and school board member John Wroblewski said they aren't too worried about the debt. The whole state is in the same boat, Hessling said, in explaining why the problem needn’t concern the school district unduly.
"In discussions, Moody’s doesn't even mention it," said Hessling of the ratings agency. "Our credit is still good. But because we are contributing funds toward PSERS, it helps our credit rating.”
Hessling and Wroblewski said Pennsylvania could not simply abandon its education system.
“I think most school districts are not contributing funds to it," Wroblewski said.
Fisher remained unconvinced. Just like with credit cards, he said, at some point the district will have to pay — and there will be consequences if it doesn't put aside money in large enough quantities to meet its obligation.
“It’s an incurred cost, much like credit cards," said Fisher. "You can’t leave it to another generation. It’s too much of a burden."
Board chair Pam Lutfy and other board members agreed they needed more time to consider the issue.
School officials say extra police officers are needed in the district, a safety issue most board members seemed to support.
Board members debated what could be cut from the budget, how to calibrate the mix between expenses and revenue, and the consequences of not putting enough toward the retirement debt.
Superintendent John Bell was not present at the meeting.
Hessling stressed that the numbers he presented that night were preliminary, and that it's up to the board to decide what it wants. On May 5, the board will receive the proposal based on the evening's discussion, he said. On May 12, the board will vote on the proposal, which then goes on public display for 30 days. The final vote is June 20.