Grand Jury calls school district’s unpaid health benefits a ‘fiscal time bomb’
By Cody Kitaura - Citizen Staff Writer
The Elk Grove Unified School District (EGUSD) and most other districts in the Sacramento area lack funding to pay millions of dollars in retiree health benefit costs and aren’t setting aside money to do so, the Sacramento County Grand Jury claimed in a report issued this week.
The district owes $33 million in retiree health benefit costs and is paying on a year-to-year basis, while its retiree trust fund owes $214 million, the report states.
Grand Jury Foreperson Rosemary Kelley said many Sacramento County school districts signed retiree benefit contracts during better times and are now suffering.
“Unfortunately, most of the districts never actually set aside any money to pay these benefits, believing that their general funds each year would be sufficient to pay the obligations,” Kelley wrote in the May 10 report, which says the county’s 13 districts and office of education are largely ignoring the issue of how they will pay for these benefits in the future.
EGUSD is one of only three groups named in the report that provide lifetime benefits. It only pays direct health benefit costs for employees who retired before July 1, 2000 – a group of 412 retirees that will decrease over time, EGUSD spokesperson Elizabeth Graswich said.
The amount the district pays on that $33 million debt is “reviewed each year,” according to a district statement quoted in the report. The report goes on to criticize that approach.
“The problem with pay-as-you-go is that districts may not have sufficient funds to pay the current year’s retiree health benefits and also pay for necessary school programs,” the report states.
More recent EGUSD retirees’ health benefits are funded by the Elk Grove Benefit Employee
The district owes $33 million in retiree health benefit costs and is paying on a year-to-year basis, while its retiree trust fund owes $214 million, the report states.
Grand Jury Foreperson Rosemary Kelley said many Sacramento County school districts signed retiree benefit contracts during better times and are now suffering.
“Unfortunately, most of the districts never actually set aside any money to pay these benefits, believing that their general funds each year would be sufficient to pay the obligations,” Kelley wrote in the May 10 report, which says the county’s 13 districts and office of education are largely ignoring the issue of how they will pay for these benefits in the future.
EGUSD is one of only three groups named in the report that provide lifetime benefits. It only pays direct health benefit costs for employees who retired before July 1, 2000 – a group of 412 retirees that will decrease over time, EGUSD spokesperson Elizabeth Graswich said.
The amount the district pays on that $33 million debt is “reviewed each year,” according to a district statement quoted in the report. The report goes on to criticize that approach.
“The problem with pay-as-you-go is that districts may not have sufficient funds to pay the current year’s retiree health benefits and also pay for necessary school programs,” the report states.
More recent EGUSD retirees’ health benefits are funded by the Elk Grove Benefit Employee
