School Board Votes to Defer Pension Payments
Decision made because state aid was cut
The Board of Education elected to defer some of its pension payment, a move made because state school officials cut Millburn's aid.
The board voted to defer $225,000 of its scheduled pension payment, which is half of the amount that is due by the end of the month. Noreen Brunini, board vice president, voted against the measure and board member Michael Birnberg, who asked a number of questions, abstained from the vote.
The school board will apply to defer the pension payment, and if accepted there will be a 15-year payback of the payment starting in April 2012.
Robert Zeglarski, assistant superintendent for business, said the move seems necessary because state officials are taking some state aid away, which is approximately how much school officials hope to defer in pension payments. The hit on state aid is only expected to be this year, he said.
The proposed 2009-10 school budget, which the school board approved last month and heads to a vote on April 21, assumes there is full state aid, he said. The payment is assumed in the proposed budget, Zeglarski said, but the anticipated revenue to match it is what is lost.
The full payment was due April 1, but there is a 30-day grace period before it is due. Waiting until the April 27 meeting to make the decision, Zeglarski said, would be cutting too close to the due date.
There is a concern that making the full payment would cut the anticipated surplus to keep taxes down in a future budget, he said.
MarkDS
8:48 am on Tuesday, April 14, 2009
Huge mistake. The amount is not that large and the anticipated tax hike for next year is not that large so why not pay it now and avoid the even bigger hit in the future. All it is is borrowing by another name and will cause all the problems that debt does.
Observer
11:25 pm on Wednesday, April 15, 2009
Sounds like another fiscally irresponsible move by the Board.