The 2008 Legislature enacted important legislation that gives school districts and other local governments new options for funding their liabilities for other postemployment benefits (OPEB). The new legislation allows districts to:

• Establish trusts (either revocable or irrevocable) to fund OPEB costs and liabilities;
• Invest trust funds in stocks and other investments not allowed for other governmental funds
• Issue bonds, without voter approval, to fund their OPEB liabilities and levy additional taxes for bond payments

Earlier this summer, Ehlers held two workshops in the Twin Cities to explain the new law and the options available to school districts for funding their OPEB liabilities. Both workshops were very well attended and well received. Based on that response and on requests from our clients, we are taking our OPEB show on the road, with five additional workshops around the state.

Workshop Topics

Many school districts are excited about the option to issue OPEB bonds as a way of reducing general fund expenditures. However, managing your district’s OPEB obligation is a much broader challenge than simply issuing bonds. This is a very complicated issue having many components each requiring a decision by the district. We recommend that, before issuing bonds, each district develop a comprehensive financial plan for its OPEB costs and liabilities. The plan should address at least the following issues:

• Determination of the current actuarial liability
• Whether or not the district should establish a trust
• Whether the trust should be revocable or irrevocable
• How funds in the trust should be invested
• Selection of a trustee and an investment advisor, if appropriate
• Whether the liabilities and costs should be funded by issuance of bonds, contributions from existing funds, or some combination of both
• Bond terms and structures
• Tax impact of issuing bonds
• Political and other consequences of issuing bonds
• The impact on the General Fund
• How future OPEB costs will be funded

Professional Firm Representation

At the workshops, Ehlers staff will give an overview of each of these issues. In addition, we will also be inviting representatives of several law firms, accounting firms, and actuarial firms to attend, but we cannot guarantee their attendance at any of the workshops. We will allow plenty of time for questions and discussion.

Workshop Times and Locations

Workshop Information

There will be no charge for this workshop, but you must register in advance, as space is limited. To register, please send an email message with your name and phone number to mnschools@ehlers-inc.com. For questions, call Ehlers (651-697-8500 or toll-free 1-800-552-1171) and ask for any member of the Education Team