The Weyauwega-Fremont School District will soon be both debt- and liability-free.
Last year, the district made its final debt payment, and by the end of June, a transfer will be made to pay off its Other Post Employment Benefits liability.
When the school board met on May 23, it authorized a transfer of $1,068,031 from the general fund, specifically a Fund 10 transfer, to pay off the OPEB liability.
Once that payment is made, the district will have $3.7 million in its Fund 10 account and will have met its OPEB liability, district Administrator Scott Bleck said.
“What that will do is assist the district in budget development,” he said.
The district had anticipated an annual payment for the next five years of approximately $235,000 to cover its OPEB liability.
“It frees up that amount ($235,000) for the next couple of years,” he said.
It was in 2007 that the school district recognized OPEB as a liability and began setting money aside to cover it by establishing a trust, Bleck said.
“Each year, we had to put about $235,000 into that trust,” he said.
Post-employment benefits are part of negotiated contracts with teachers. When health care costs were lower, school districts could afford to offer these benefits, Bleck said.
After the state said these benefits had to be recognized as a future cost to districts, the W-F School District started a trust to pay off its current and future OPEB liabilities.
Teachers retiring from the district now are eligible to stay on the district’s health care plan until they reach Medicare age. Or, they can opt for a cash-option buyout when they retire, Bleck said.
“We have eliminated future OPEB liabilities, because within our current negotiated contracts, we have identified an end date of when our obligation will be and we have taken a different approach through the development of offering a tax-sheltered annuity,” he said.
The last OPEB benefit will be recognized in 2017.
“The communities of Weyauwega and Fremont need to be recognized for their support of public education in addressing the OPEB liability. We are in the position where we can use funds we do have available to efficiently run the district,” Bleck said. “We were looking at ways to be efficient with our current financial condition and also look at our future financial needs.”