Denver Direct: Will Michael Bennet be remembered as the man who killed the Denver Public School System?


Wednesday, July 21, 2010

Will Michael Bennet be remembered as the man who killed the Denver Public School System?

Screen grab from video shot at Bennet’s Obama Blessing rally at the Fillmore

Democrats will soon choose between Romanoff and Bennet for their candidate in the November race for US Senate. What I can’t understand is that Bennet is still a viable candidate in this race. As a former  Superintendent of Denver Public Schools, he often touts “improvements” made during his tenure. How can that be? His actions taken in that office will, in a few years, actually kill the entire system.
How? Read this article from July 2, 2010, by Christopher Scott, Founding member, Denver Education Advocacy Network. I quote:
 

Last week, as part of discussions related to DPS’ 2010/2011 budget, DPS Chief Operating Officer David Suppes sent the board of education a spreadsheet that details DPS’ expected payments to the Colorado PERA system for the next 28 years. The spreadsheet was prepared by Brett Fuhrman, DPS’ former Chief Financial Officer. (Brett left just recently to work at a school in Boston.) Fuhrman put the spreadsheet together for who knows what reason, but he provided it when Jeannie Kaplan and Andrea Merida asked for documentation of what DPS was paying to PERA.

To say the least, the spreadsheet is illuminating. It shows the percent of payroll that DPS should be paying to the pension system, the actual anticipated payroll for the next 28 years, the deduction DPS is taking for servicing its pension related debt (more on this to come), and what DPS will actually pay through 2038, when its pension debt is paid off.

For example, in 2010, DPS should pay 17.45% of its payroll to PERA. DPS’ payroll in 2010/2011 is anticipated to be $491,749,509. Therefore, DPS should be paying just under $43 million for the last six months of 2010. Instead? DPS has budgeted to pay $6.9 million in this time frame. At the same time, DPS’ employees will pay $19.7 million into the pension.

Any sane person would ask, how can this be? The answer isn’t simple. (Is it ever?)

The legislation governing the merger between DPS’ retirement system and the Colorado state retirement system allows DPS to take an 8.5% deduction based on loans taken to fund the pension. On these, DPS owes $750 million, 8.5% of which is $63.75 million. This is the amount DPS can deduct from its PERA contributions each year.

How this mess came to be is a long story that I will not go into here. However, the fact that this is DPS’ planned contribution for 2010, a contribution rate that holds steady into 2015, has caused great concern on the PERA board of directors as well as with former members of the board of the DPS retirement system.

According to actuaries at PERA, DPS may never be able to fund its pension fully by 2040, as required by a bill passed in the Colorado state senate last year. In fact, doing the math using the numbers in DPS’ spreadsheet shows that, at its current rate of contribution and the $386 million funding shortfall as of December 2009, DPS will build a $1 billion liability by 2015.

That’s right: $1,000,000,000. In just 5 years. And DPS will have to pay that back using taxpayer money.

Bookmark and Share

  1. Astro Pinion5:28 PM

    Hello,

    On the topic of PERA, I listened to the Colorado Senate Finance Committee testimony for SB 10-001 and was disappointed to hear that a motion to regularly and independently audit PERA’s financials was not supported.

    It seems that an outside audit of PERA is a great next step. It is both essential and fundamentally responsible.

    There is discussion from the folks at SavePERACOLA: http://saveperacola.com

    Respectfully,
    Astro

    ReplyDelete