Garden City Public Schools’ 'Question of the Week'

In order to clarify the complex budget issues facing Garden City Public Schools as it formulates the 2013-2014 budget, the district continues its “Question of the Week” feature to provide information and address concerns expressed by residents.

A complete listing of questions and answers to date is posted on the district’s website:www.gardencity.k12.ny.us.

Below is this week’s question and answer:

If employee pension costs are driving Garden City Public School’s 2013-2014 budget higher, can the school district contribute less?

No, public school districts in New York State are mandated to belong to and contribute to both the Employees’ Retirement System (ERS) and the Teachers’ Retirement System (TRS).

School districts are required to offer employees the opportunity to belong to one of these public pension systems. The contribution rates are determined by the ERS and TRS Boards based on a five-year rolling average of returns on investment and future needs as computed through actuarial analysis.

“We are given the information in a letter distributed to all State school districts,” assistant superintendent of business Al Chase said. “Garden City Public Schools has no discretion in terms of setting the rates.”

To amend school districts’ mandatory pension contributions would require action by the governor and state legislature.

“A bill that alters public pension benefits must be initiated by the state legislature, approved by both the Assembly and Senate, and signed into law by the governor,” according to the TRS website.

For Garden City Public Schools, the increase in required contributions for the 2013-2014 budget year to the ERS is $568,474. The TRS requires an increase of $1,598,244. Together, these total $2,166,718 and have a budget impact of 2.07 percent and a tax impact of 2.28 percent.

The district cannot borrow to pay these expenses, nor can it arrange extra fees, such as municipalities can, to generate additional revenue streams. This includes being prohibited from implementing “pay to play” fees, i.e., charging parents for students’ participation in sports teams.

To assist with the escalating costs of the public pension systems, the governor signed the “Stable Contribution Option” into law on March 29. The law provides a “smoothing” of the required pension contributions in the present, in favor of spending possibly more, depending on the annual rate set by the TRS Board, later on. 

“It’s a bit of a gamble,” Chase said. “In a recent survey, of 37 districts who responded, only six indicated an interest in the option.”

The Stable Contribution Option is a seven-year TRS plan that requires a mandatory 14 percent contribution for years one and two, 16 percent for the next two years and 18 percent for the final three years. In year eight, districts would revert back to paying “actuarially required contribution rate as calculated by NYSTRS.”

If the TRS increase goes below any of the fixed rates, then districts could be paying more than they would in the absence of adopting the plan.

Contributions to pension systems are just one of the many mandates required of public school districts. For complete information about the proposed 2013-14 school budget, visit the “Budget Information” section on the district’s home web page.

The district also welcomes Garden City residents to attend Board of Education regular and work sessions to ask questions and voice concerns. A calendar of these meetings is listed on the district website under “Board of Education.”

Submitted by the Garden City School District