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Dallas School News

*Board ponders PERS options *Added funding assures services *DHS will use "weighted" grades *District, employees reach pay agreement

Board ponders PERS options

DALLAS -- No action but more information was offered regarding the possible sale of bonds to pay off an estimated $9 million in unfunded liability Dallas School District faces with the Oregon Public Employee Retirement System (PERS).

The Monday night meeting of the school board was addressed by Carol Samuels of Seattle Northwest, a securities firm specializing in municipal bonds. She emphasized that the school board is ultimately responsible for the course it takes and that no course is without risk.

Following Samuels' words with the board, Chairman Bob Ottaway, presiding at his final meeting after serving four terms on the board, said "I think we'll let the folks in July decide on this."

Seattle Northwest would like to see the Dallas District use a bond sale to pay off its debt. With such a sale, the annual payment to PERS would drop significantly, although the district would have to pay off the bonds as well.

If PERS continues to earn 8 percent or more annually and the bonds sell for significantly less than that 8 percent level, the district will have reduced its costs. Its pension liability would be effectively traded for a bond liability.

The bonds would be taxable rather than the typically tax-exempt municipal bonds such as the district has used to build its buildings.

PERS in Oregon must earn 8 percent annually to avoid further increases in its unfunded liability balance that is estimated to be $4.6 billion - half of which is from school districts, according to Samuels.

She also noted that system-wide PERS is in a surplus position. That is, its resources are greater than its liabilities. Some of that surplus has resulted from the districts that have paid off their unfunded liabilities with revenue from bond issues such as those sold by her firm.

In 2002 she noted that actuaries calculated the PERS unfunded liability as being $17 billion. The improvement in that balance has also resulted from changes made in the retirement system since then.

That 2002 year was the worst in the system's history with a nine percent loss. That loss actually impacted the liability total by 17 percent due to the guaranteed 8 percent return assured to many employees and even more generous payouts made to others.

When the matter of a bond sale to pay off the unfunded liability arose several years earlier, the board rejected the idea. Interestingly, the Central School District used the bond approach and thus far has seen an improvement in its cash flow.

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Added funding assures services

School Superintendent Christy Perry informed the district board at its June 25 meeting that a School Improvement Plan recently enacted by the legislature brings an additional $675,000 to Dallas each of the next two school years.

"It's been our concern to hold next year's service level for two years if at all possible," Perry explained.

"We were concerned that the projected contingency in the 2008-09 year was going to be $70,000. These funds allow us to feel confident we can maintain the same classes and classroom loads through that year," she commented.

The additional money is resulting in the movement of funds from the district's general fund to its school improvement fund. The state clearly spells out which categories of spending can be used in this manner.

The superintendent and business manager Tami Montague provided the board a list of transfers totaling $759,000. "We'll reduce that total after we see the final numbers from the state," Perry added.

"I think many districts in the state will be doing what we're doing. Some districts with faster-growing enrollments than Dallas may be able to reduce class size," she concluded.

Also at the Monday night meeting, the board formally approved a $34,790,000 budget for 2007-08. The general fund reflecting the actual teaching and operations of the schools in the district totals $26.66 million. Special grants and projects total $3 million.

Another $2.37 million will continue retirement of building bonds, and another million comes from student activity funds. Food service takes $928,447, while maintenance and repairs of facilities in the district costs $725,131.

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DHS will use "weighted" grades

Next year's students at Dallas High School will be working for pluses and minuses as well as letter grades.

At its June 25 meeting, the school board approved a proposal from Dallas High Principal Keith Ussery allowing for a grading system with the following grades: A, A-, B+, B, B-, C+, C, C-, D+, D, D-, F.

For most courses the grades reflect the traditional 4.0 scale with an A worth 4.0 and a D- carrying a numerical value of 0.7. In fact a plus grade bumps the numerical value of the letter grade up 0.3 of a point, and a minus grade drops it 0.3.

Advanced placement courses will be graded in same manner but on a 5.0 scale. An A in an AP course will be a 5.0 grade. An F in either type of course carries zero credit.

Director Kevin Crawford has been a strong advocate of adopting a weighted grading program.

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District, employees reach pay agreement

At its June 25 meeting, the Dallas school board unanimously agreed to a three-year contract with the district's classified employees. Those are school employees who aren't licensed as teachers or administrators.

Key elements in the agreement include the district agreeing to pay the 6 percent employee contribution to the Public Employees Retirement System beginning July 1.

The hourly pay schedule will be adjusted with a 2 percent increase in the first year, a 3.5 percent increase in the second year and a 3 percent increase in year three.

In addition, the district will pay up to $865 monthly for family medical, dental and vision insurance coverage for employees working four or more hours daily on a regularly scheduled basis.

Formal ratification of the agreement by the employees is expected to follow the board's action.

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