Eastern Lancaster County School District budgets for pension cost increase

Intelligencer Journal
Lancaster New Era

Oct 28, 2009 06:07 EST

Denver

By PATRICK BURNS, Correspondent

The Eastern Lancaster County School Board agreed to add $500,000 to an account established to pay for a coming spike in funding to the Pennsylvania Public School Employees' Retirement System.

The board last week decided on a compromise to district Business Manager Keith Ramsey's suggestion that it designate $1 million more to a "rate stabilization" account that would help offset an expected $2 million-plus spike in Elanco's funding requirements to the system in 2012-2013.

Ramsey said prudent management of the 2008-09 budget helped push Elanco's surplus of unreserved and undesignated funds to $4.06 million.

That is $704,500 more than the allowable 8 percent surplus of unreserved and undesignated funds in its general balance, relative to the district's $43.2 million 2009-10 budget.

The board also voted to transfer $500,000 to the district's capital reserve fund for the fiscal year ending June 30. That could be used to pay for any major change orders to Elanco's $25 million renovation project, which began in June.

Costs to the state workers' pension fund, which includes state lawmakers, are scheduled to escalate in 2012 when benefit increases passed by the Legislature in 2001 kick in. Elanco established the rate-stabilization fund last year when it set aside $1.5 million for the 2012-13 pension fund spike.

The board originally believed the cost would be a one-time bump, but recently learned that the increase would be a "reoccurring expense."