The Eau Claire school board decided Monday to vote on future changes to the district’s retiree benefits plan at its next meeting.
That decision comes after months of debate about the future of other post-employment benefits, or OPEB, since the board’s budget development committee in April told the board the program in its current structure is financially unsustainable.
But district business manager Abby Johnson reminded the board Monday night that this discussion is nothing new, as the issue has been discussed on and off as it relates to ongoing budget woes in the district since 2012.
“And nothing’s been done,” Johnson said. “We understand that it’s a challenge and that it’s very hard to make a change, but we have to ask ourselves: Do we want to continue to hold off on change?”
Johnson outlined three updated options for the board to consider during a presentation of the budget development committee’s findings on Monday night.
The first option is to break the changes into three tiers of grandfathering scenarios based on retirement dates and job positions within the district. Though it would not make a budgeting difference until 2025, it would potentially save the district $52.7 million by 2046, according to board materials.
The second option for change is to cap health and dental rates at the current 2018-19 rate. Because exact data was not available by the time of the presentation, estimated figures based on 2017-18 district staffing and retirement data were used to project a savings of about $10.6 million over 30 years, or about $353,982 per year.
The third option is to make no changes to OPEB for 2019 and to revisit the subject in December 2019 for 2020 implementation. The Budget Development Committee, meanwhile, would likely continue researching the topic.
But Johnson cautioned the board that no change in retiree benefits would mean further difficult decisions down the road, including salary freezes, increased class sizes, less staff, employees contributing more to health insurance or increased heath insurance deductibles.
“There’s a definite trade-off in the case that the board doesn’t make changes,” Johnson said. “But also, just because a change is made to OPEB, it’s not going to solve all of our problems.”
Board President Joe Luginbill expressed concern over the lack of data present for option two as well as the lack of substantive savings in the first several years in option one.
Luginbill also wondered how the board’s newly formed revenue committee could impact future budgeting.
“I think that (the revenue committee) has to be part of the conversation,” Luginbill said. “This begs the question of, ‘Are there other things we can do as a school district?’”
Board member Laurie Klinkhammer said in her view there are two options for the board at this point: Vote on OPEB this month, or make those hard decisions Johnson mentioned.
“What I think we’re all feeling is that we wish there was another situation. We wish there was a magic fix to this. We wish there was something that is going to come out that’s going to solve this problem for the district,” Klinkhammer said. “But at what point does it look like we’re putting voting on this off?”
The board will vote on OPEB at its meeting at 7 p.m. Dec. 17 in the school Administration Building, 500 Main St.