Agenda - 09-06-2022; 8-a - Minutes

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4 1 to fund. She thinks they should move $500,000 to the schools before the county funds those 2 benefits in advance. 3 Chair Price asked about the impact of not funding the OPEB Trust Fund and asked if it 4 would put them in any type of jeopardy. 5 Bonnie Hammersley said it is a best practice to fund. She said the consequences of not 6 funding are unknown. 7 Gary Donaldson, Chief Finance Officer, said it is a best practice. He said that it is meant 8 to provide a multitiered approach to fund the liability. 9 Commissioner McKee said the OPEB liability is at $161 million, and 8-10 years ago they 10 were at $60 million or something close to that. 11 Gary Donaldson said the federal monetary policy results in changes to the fund and 12 there is an inverse reaction on the fed rate. He said that there were 150 basis points of 13 reduction over the last five years. 14 Commissioner McKee said their basic liability is $161 million today regardless of what 15 happened in the past or what happens in the future. He said it was his recommendation to fund 16 it in 2016 and 2017 and they funded above what was required. He said he is very concerned to 17 start defunding the liability. He said it would hit back at some point, and it will hit at a higher 18 number because it steps up every year. He said it has gone up $100 million in liability in ten 19 years. He said he is worried about what happens years from now. He said he does not want that 20 to become a number that catches the rating agencies' attention. He said that he would like to 21 add to it. He said this is a matter of fiduciary responsibility, obligation to the taxpayers. 22 23 Commissioner Richards arrived at 7:20 p.m. 24 25 Chair Price summarized the conversation prior to Commissioner Richards' arrival. 26 Commissioner Greene said she struggled with the amendment. She said that it is a best 27 practice for a good reason. She said that for sustainability, they should not set the expectation 28 that the funds will be part of the school budget in future years. 29 Commissioner Fowler asked if the staff recommendation is to put it in the OPEB trust 30 fund or to put it in committed funds. 31 Bonnie Hammersley said the recommendation is to put it in the OPEB Trust Fund. 32 Commissioner Fowler asked if they gave the money to the schools and then had a fund 33 balance available next year, could put that in the OPEB Trust Account at that time. 34 Bonnie Hammersley said it would be up to the Board at that time. 35 Commissioner Hamilton said the schools are in crisis. She said the OPEB is an 36 accounting practice which at this point, given the amount of funding that Is available for the 37 liability, is not needed this year, but it is something that needs to be planned for in the future. 38 She said that Orange County does not have a lot of growth because we do not have a lot of big 39 industries. She said that also creates stability. She said the cities that had trouble lost major 40 industries. She said the county is heavy in the property tax base, and with the demand for 41 people coming into the community, they are going to have growth in the future. She said there is 42 flexibility to use those funds. She said that as they grow in the future, or when they have 43 additional funds, the Board could make the decision to put it in the trust fund. She said the 44 schools are in crisis. She said if the Board wants the community to look like a rust belt then they 45 can undermine economic development by undermining education. She said they do not have 46 enough teachers or staff to support them. She said that the county cannot provide for a basic 47 education. She said that the Board cannot stand by and not assist in a way that has the least 48 impact on taxpayers. 49 Commissioner Richards asked if the Board might create another crisis by robbing the 50 OPEB fund. She said that was her concern and the potential to impact credit ratings and fiscal 51 management of how they are evaluated is worth considering because it has implications far