2012-06-28 / Front Page

District awaits retirement bill

Board adopts new budget despite ‘big missing piece’

MANISTIQUE – The Manistique Area Schools Board of Education adopted the district’s 2012-13 budget Monday, with little comment or discussion. The only source of apprehension – a delay by the Michigan Legislature.

According to the legislature’s website, the Michigan House of Representatives recently passed SB 1040, a retirement employee reform bill for members of the Michigan Public School Employees Retirement System (MPSERS). The bill now sits in the hands of the senate, which recently recessed until July 18, much to the dismay of districts throughout the state, explained MAS Superintendent Kathy McDonough.

“Districts … were hoping to have that information in order to finalize their mandatory state budgets that are due by June 30,” she said.

In a Legislative Analysis from the House Fiscal Agency, SB 1040 is described as a bill that would change the MPSERS Act to increase the contributions of employees or freeze current benefits and maintain current contribution rates.

The bill would also increase the retiree health insurance premium contribution of both existing and future retirees to at least 20 percent, capping MSPERS’s premium share at 80 percent beginning Jan. 1, 2013, the analysis states. SB 1040 also addresses: pension changes for both basic and Member Investment Plan and new employees; increased employee health care premium contributions; defined contribution health care revisions; the continuation of mandatory 3 percent employee contribution for retiree health care; prefunding of retiree health care obligations; university health care study; and other rate changes.

Main points of the bill include prefunding the retirement system and shifting some of the financial burden from districts to employees. If the bill is not passed, districts around the state could be faced with increased retirement contributions – a scenario MAS administrators had to take into account in order to pass a budget by June 30.

“Everything that we know is in here – the retirement is a big missing piece,” said Administrative Assistant Donna Winkel. “It’s, again, very conservative (the cost estimate). Chances are it will only improve.

Even though salaries went down, the retirement went up,” she added. “I’m really hoping that they can do something with that.”

According to McDonough, the district will be in limbo until the retirement bill is either passed or denied. Until then, administrators did the best they could with getting a budget together with a projected 2012-13 year-end balance of $218,144.

“It is what is it, and we are still not laying off, which is the good news,” she said.

The district did recently received their state aid package, noted Winkel, and also plan on meeting seven of the eight “best practice” requirements, which will potentially mean an additional $52 per student. The district also ordered two new busses and lowered one millage.

“We have a debt retirement millage levy … we are reducing that from 2.95 mils to 2.5 mils, and that has to do with the refunding that we just went through this past year,” she said. “So that’s positive for the community.”

In other business, the board approved the contracts of new Emerald Elementary Principal Erik Mason and Manistique Middle/High School Principal John Shriner.

“This is a great opportunity, and we’re definitely going to take advantage of it, and do the best we can for the community and for our school district and for the kids that we’ll serve, as well as the teachers and the support staff,” Mason said. “We’re in it 100 percent and are excited and can’t wait to get started.”

According to Shriner, he and Mason have been in communication and plan to “hit the ground running.”

The two were offered the positions early this month, following public interview sessions.

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