OPEB measure likely dead
By MICHAEL ERB
POSTED: November 20, 2009
PARKERSBURG - West Virginia schools will receive no state relief from a growing OPEB debt this year and will decide by the end of the month whether to file a lawsuit against the state.
During a visit to Wood County Schools Thursday, Gov. Joe Manchin said the state Senate would not take up a proposed bill during its special session which would have given school systems a one-year reprieve from the growing debt. The temporary measure would have allowed the school systems to not add debt due to Other Post-Employment Benefits costs, OPEB for short, but would not have freed up money already set aside to cover existing debt.
The bill went to both Senate and House committees, but did not progress past the Senate committee, effectively killing the bill, Manchin said.
"We've got a serious situation, and the members of the Senate and the House of Representatives understand that," he said. "We recognize we've got to find a permanent solution for this problem. We don't have a choice."
Members of the Senate committee which declined to pass on the bill cited concerns over the legality of allowing districts to ignore the debt and said they would rather a long-term solution be presented instead.
However, many school systems say they will be bankrupt by the end of 2010, and several larger school systems already have made cuts to classroom programs to cover the mounting debt.
The mounting Other Post Employment Benefit debt is a major concern for the local school system. Wood County Schools set aside $1.8 million in last year's budget to cover OPEB. The district is now receiving a monthly invoice for $1.33 million from PEIA. By next fall the debt for Wood County Schools is expected to top $16 million.
For years the state has allowed employees to cash in unused sick leave to pay premiums on the state retirement fund. The practice has created a growing debt with no source of funding. Federal accounting rules require an employee's last employer to record the debt on its books, meaning school systems could be stuck with the bill and no way to pay.
Roane and Wirt counties are facing similar situations, as both will be required to report the liabilities this coming year. Both have little in the way of funds to set aside to cover the debt, however, and will go into a deficit almost immediately, officials said.
Manchin pulled aside Wood County Schools Superintendent Bill Niday Thursday during a visit to Blennerhassett Middle School to talk about the status of the bill.
"I'm very disappointed," Niday said. "I know the governor worked very hard to come up with a temporary measure to give the counties some immediate relief and give us time to find some sort of permanent solution to the OPEB situation. I don't understand the Senate's reasoning in not taking up the measure."
Niday, who also is president of the state's Superintendents Association, said the next move might lie with the courts. Forty-nine of the state's 55 school systems have joined together in preparing a lawsuit asking the courts to decide who is responsible for the OPEB debt.
Niday said representatives of the 49 counties were scheduled to meet Nov. 30 to review the results of the special session and "make a decision where to go at that point." Niday previously had said preparations on a lawsuit against the state had already been completed, and lawyers were waiting for the go-ahead from the involved school systems before filing the suit.
Manchin said he was aware the 49 counties might seek legal action, but declined to comment on a possible lawsuit. The governor had appointed a task force to work with education officials which had submitted the idea for a one-year reprieve on OPEB payments.
"I've done everything I can do," Manchin said.