School Board Continues to Mull VRS Options
Fairfax County Public Schools staff is looking into possibility of deferring budget approval
The Fairfax County School Board continued to debate how to implement changes to the Virginia Retirement System into the fiscal 2013 budget during a work session Thursday, with most of the members leaning toward phasing in the required shift to 5 percent employee contributions.
Susan Quinn, chief financial officer for Fairfax County Public Schools, presented six of the hundreds of options for how to adjust VRS and Educational Employees' Supplementary Retirement System of Fairfax County (ERFC) contributions, market-scale adjustments and STEP increases. [See the options in a PDF included with this article.]
Option A showed Superintendent Jack Dale's proposal, which would have FCPS complete the 5 percent shift in fiscal year 2013 and eliminate both step increases for eligible employees and a 2 percent market-scale adjustment included in the advertised budget the board passed in February.
Though the one-time shift would cost $52.2 million in the first year — the second highest of the six options presented — it would cost the school board $400.5 million in each recurring year after the first five years, which is the second lowest of the options presented.
Members Kathy Smith (Sully), Ted Velkoff (At-large), Ryan McElveen (At-large) and Chairman Janie Strauss (Dranesville) all expressed support for the superintendent's plan, saying the fiscally responsible decision would be to pay for the shift now.
"If we defer this payment, do we trust ourselves enough to make sure that if we defer those payments, we're going to make those payments over the next five years?" Velkoff said. "I'm going to say I love you all but I haven't been in the foxhole long enough with you to know whether I can. So I need to be convinced if we're going to defer those payments that we're going to be wise and responsible in making sure that we're going to make those payments in the coming years."
But those who wanted to phase in the VRS over at least a few years cited employees' wants, as demonstrated in two of the teachers' unions preference for the switch to 5 percent to phase in over five years.
Fairfax Education Association and Fairfax County Federation of Teachers have made their preference known for the measures taken in Option B, which includes a 4 percent market-scale adjustment and 2 percent step increase. It would cost $80.1 million in the first year and $208.4 million more than the superintendent's plan over five years. After five years, the recurring cost would be $456.7 million per year.
"What weighs most heavily on my mind is that our employees, the ones who are directly affected by the decision we will make on this, have not been supportive of the superintendent's recommendation," Megan McLaughlin (Braddock) said. "And it's for that reason alone that I am deeply conflicted."
Option C uses the same five-year phase-in as Option B, but asks for a 2 percent market-scale adjustment. The other three options phase in the VRS over at most three years. Option F will cost the least both in the first year and in recurring years after the five-year projection.
With six options of hundreds singled out, Elizabeth Schultz (Springfield) said she did not want her fellow members or the public to be confused that they have to choose from those options.
"These are just examples of options that could be available to us. I'd like to reiterate to my colleagues that we have 220 pages of budget responses from which we can craft our own," she said. The one thing that bothers me is that we're being directed to a path here that only talks about what things are going to cost. There's nothing addressed about saving anything."
She also asked staff to look into whether the approved budget must be passed on May 24, as is currently scheduled. They did not have immediate answer.
"If we could get a clarification on that it would be really helpful because there may be a world of difference in the ability of this body to come up with an option that maybe is different than what is set before us right now," Schultz said.
Some of the board members said amendments they planned to present to the board depend on the decision of whether to phase in the VRS requirements or do it all at once. Amendments are due Monday. Vice Chairman Ilryong Moon (At-large), who chairs the budget committee, and Sandy Evans (Mason), who serves as vice chair on the committee, will come to a conclusion on which method to use today. Both said they personally preferred one of the phase-in options.
Moon said he would be calling all members today and consulting with Evans to make the decision. Once a decision is made, they will work from the advertised budget to create a proposal.