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Fillmore Central to study using bonds to pay retiree benefits


Fri, Aug 29th, 2008
Posted in Education

HARMONY - With the 2008-09 school year just a week away, the Fillmore Central School Board met on Tuesday, August 26, in the high school media center to finalize last minute plans for the upcoming school year.

OPEB Bonding

The 2008 Minnesota legislature authorized school districts to establish trusts and issue bonds to fund Other Post-Employment Benefits (OPEB) for retired teachers, who are eligible under the teacher contract for health benefits until they are 65. Presently, the district pays these liabilities out of the general fund. The new legislation would allow the district to issue general obligation bonds to pay the retirement benefit, while levying for the money to pay the principle and interest on the bonds. The legislation authorizes the district to levy for these funds without voter approval.

Superintendent Myrna Luehmann and Board Treasurer John Torgrimson recently attended a seminar on the legislation at the Service Coop in Rochester.

Luehmann told the board that the district would need to hire a firm to conduct an actuarial study to determine the district's liability over time to its retirees.

Torgrimson told the board that the district can choose to bond for all or part of the liability once the study has been completed.

"The benefit is that it would free up money in the general fund to be used for operating costs, rather than retiree benefits," Torgrimson said.

The board voted to approve an actuarial study by the Hildi Company for $3845, which should be completed before the board meets in September. The board will then review whether it wants to proceed with issuing bonds and the amount of tax burden, if any, it would place on taxpayers.

Revised Bus Contract

After the board approved a two year bus contract with Harmony Transit at its July meeting, the bus company asked the district to take another look at the fuel clause. Harmony Transit owner Mark Scheevel was concerned about the fuel formula being used given the volatility in fuel costs.

The Transportation Committee met with Scheevel and recommended going back to a fuel pool, similar to what was in the original contract. The new agreement calls for an increase of one percent in the base agreement the first year, and two percent in the second year of the contract. The fuel clause calls for a cap of $30,000 in the pool with the base rate set at $3.00 per gallon.

The board rescinded the previous action on the bus contract and passed a new resolution.

Roofing Problems

The middle and elementary school's summer maintenance plan was almost completed ahead of schedule this year, until the rain storms of Thursday, August 14 led to flooding throughout the school. The roofing contractor failed to properly seal the roof.

The board held an emergency meeting concerning the problem on August 20, and opted to hire a new roofing company - Schwickert's of Rochester - to repair the recent damage and carry out the roofing project. Schwickert's was the low bid at $7.41 per square foot, for a lump sum of $103,750.

Insurance adjusters have looked at the damage. A decision will be made at a later time as to whether to hold the original contractor responsible for damages.

In the meantime, workers will complete replacing ceiling tiles and repairing other damage in time for school starting on September 2.

Schwickert's will start replacing the roof on Sept. 8.

Other Business

The board:

• Approved the hire of community education positions;

• Recognized receiving donations from the Fillmore Central Booster Club ($6,000);

• Recognized receiving donations ($10,500) from area banks F&M Community Bank in Preston, First Southeast Bank in Harmony, and First State Bank of Fountain for the Mini-Grant Program.

• Recognized the receipt of school supplies from area churches and Thrivent Financial for Lutherans.

• Reminded the public that filing dates for three school board positions are from August 26 and Sept. 9. Elections will be November 4, 2008.

The next school board meeting will be Tuesday, September 23, at 6:00 p.m. at the high school media center in Harmony.

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