April-1-2019-BoardWorkSession-Segment-2
[00:00:00] Chaotic.
according to the existing Bill and there's no effort to change this. You have to apply by the end of this year. But you don't have to make a deposit and actual deposit for a couple of years. So I wouldn't be surprised if there are a lot of people who apply thinking if I have the money at that point, you know, I'll do my best to come up with it.
Let's see if I get lucky on the match. The existing bill says you have to fund the deposit by 2023 Senate Bill 75 is changing that to 2021. So that's what I would expect. If you make a deposit before the application cycle anytime from June last June forward you're eligible for a match. You just may not [00:01:00] get one.
So if you decide you'd like to set up a side account independent of whether or not the state gives you a match. There's no reason not to do it. You don't have to wait for the application period to open to be eligible to be eligible for the match. You have to come up with cash. So they will not match Bond funded side account deposits and you have to have something called a ual resolution plan, which nobody knows what it is yet.
So so that's the employer incentive fund. 1566 also created a school pool ual fund that was actually funded to the tune of about a hundred million dollars and is in the governor's budget anyway with another hundred million dollars. This does not require a match and will be applied to every school [00:02:00] district.
So starting next year. You will get a tiny sliver off of your payroll, right? Because of this fund.
Um other things that are in 75 the relevant probably the most relevant thing is that it creates a waiting list. So if you should apply let's say you're not prioritized and. You're way way way late because all the prioritize folks have taken all 25 million dollars. They intend to construct a waiting list it maybe 15 pages long.
But they intend to have a waiting list and go through it as funding becomes available. So again, theoretically you might be eligible for a match. It may be many years before you see it, but some money is probably [00:03:00] better than none. Senate Bill 75 I anticipate will absolutely go through the legislature.
It's a pers bill. It's deemed a technical correction. It's already had a hearing and it was reported out to Ways and Means with a do pass recommendation. So. If you want to apply Purge says that they expect as soon as 75 is signed by the governor that they will post a Draft application give people 30 days to make comments and then begin accepting them and when I've pressed them for their process they have said well, it's just going to be first come first serve electronically.
I think they maybe haven't thought very carefully about how that could leave to a complete free for all of people pressing [00:04:00] sense and sent and you know having systems crash everywhere, so. It may well be that upon thinking about it a little more carefully. They will revise the system somewhat, but again, the theory is it's going to be first come first serve with the prioritize group, then they're going to allow everybody else.
And anybody who doesn't get money will be on what I anticipate to be a fairly lengthy waiting list. They expect to be all wrapped up. By December 31st 2019. In fact, I think they will probably be wrapped up way before that as soon as they open the application period.  Any questions on that try to cook one?
So has anybody done the analysis of which other districts have the cash on hand and are on the prioritized list. I mean is Portland Public Schools going to eat up the whole thing? In one shot. I mean do they have the money? [00:05:00] Is there any kind of analysis out on that? So no, there is no analysis out there I can.
Tell you anecdotally I have been having many conversations with jurisdictions that you know have a million dollars here or two million dollars there. Most of them are not school districts. So I don't think you need to worry about PPS sucking it up counties that you know, routinely tend to carry bigger fund balances than school districts.
I might be a little more worried about them. You are competing not just against school districts, but against all jurisdictions across the state so.  Pers does have a rate projection tool that allows you to play. What if games what if I deposit this much how much might it? Deposit or bring down my rate [00:06:00] some cautions about this tool.
It's a fantastic first. First blush effort to give you some guesstimates, but it's a very blunt object in terms of what it gives you. For example, it assumes two key things that may or may not be true. It assumes your deposit will be amortized over 20 years. So it works for the first deposit doesn't work for the second through.
Infinity deposit if you keep making deposits to that account, and the other thing it assumes is that the fund earns each and every year 7.2% which I guarantee is not going to happen my turn 7.21 year 15 the next negative 3 the next etcetera. So this information will give you a [00:07:00] baseline, but it's not going to be exact.
With that said we ran one what if for you and I don't know suddenly. Have you played with this tool?  Have you played? Okay, so this is going to be familiar to the person who ultimately is going to have to use it. But just to give the rest of you a flavor what they do is they produce a. Data set which provides information so wessling is here this green data.
I doubt you can see it but it shows you your payroll by certain categories the first blue box shows your payroll rates that are currently being paid and then the second blue box shows you the payroll rates that you will start to pay for different categories of employees. Starting in July.  that data [00:08:00] is then fed into this sheet.
So this is the payroll data with tier one at looks like about 23 million to your to is 27 million and your current payroll rates or here and next year's payroll rates are here and then this pink box. Is where you plug in your deposit, so just to keep the numbers easy. I said what if the district were to make a deposit of a million dollars?
It then spits out this really incomprehensible sheet that actually once you get used to staring at it has some very valuable data in it. First of all, so way I can increase.
[00:09:00] Okay. So this rate here, this is Tier 1 tier 2 shows you purses projection of where your rates are going if you do nothing. Hey, this is the first time this data has actually been available for school districts on a long-term basis. So for you guys, it's currently 18.5 6% Again, this is just for tier one to your to supposed to grow to 20 4.25 starting in July.
And the year after that or two years after that 2123 it's close to 30 again keeping in mind. This does not count the six percent pick up. So add 6% to that then it you know kind of Mellows out. But if I were to extend this out all the way to 2035 you would see it stays at [00:10:00] roughly 30% until 2035 and then it declines from there.
Okay, so if you then make a side account deposit.  oops. Okay,
here we go. The credit is in this yellow bar here. So for every million dollars based on this set of assumptions your rate would go down by point one three percent. So that gives you kind of orders of magnitude. It takes a big deposit to move your rate significantly not to say that 13 basis points, isn't I mean it's not Penny's so the difference here is that you would pay nine point nine five [00:11:00] million forty R1 to R2 with this kind of rate credit.
It brings it down to nine point eight nine eight. So that's what about 50. 54,000. Okay, cough syrup is down below same 13 basis point savings. But because you're applying it against a larger payroll base. The difference is bigger. So it goes from 12 .85 to 12 .76. So roughly $90,000 there.  So that's the kind of thing that as you start to think about your budget.
You can play with but roughly if you're going to put 2 million in it's going to be 26 basis points. If you put 3 million in it's going to be 39 basis points, etcetera makes sense. Mrs. Samuels. I'm going to interrupt and we're as we often do going a little off of our agenda. So with respectfully we're [00:12:00] going to.
Do a couple other items we have to do now and then and pick up your presentation afterwards.  You're fine. You can stay there. So we do have someone here for public comment. So we're going to go ahead and welcome Miss Miller to do that. I think you've been here before and you'll know that the time is limited to three minutes.
And two. But anytime, yep your name and address Julie Miller at two three to five carriageway. Good evening. My name is Julie Miller and I would have preferred to have this dialogue in a private setting but unfortunately that has not been possible. I want to speak to you tonight about the lack of communication transparency and respect by some members of the district and school board.
I have made multiple. To ask about statute three to nine point seven. Oh [00:13:00] four or 21st century school councils on February 19 that sent a message to Ginger inquiring about the statute her response was she was unfamiliar and it would take a couple weeks to get back to me. I didn't get a response. I then emailed Barbra Streisand I February 27th and I specifically asked to be involved in the task force for the District of the such education curriculum and again asked about the 21st century School counseled chair, which we do have a policy about naming individual staff members or that reminder.
I don't know how to communicate because I've emailed so I don't know why don't you and I take a break and we'll talk for a minute and then we'll come back. Yeah, okay.