Retiree health costs pinch in Chesapeake

CHESAPEAKE

The public school division has another question to consider while it prepares for an already strapped budget: How much money will it set aside for future retirement health benefits?

During Wednesday's joint City Council-School Board planning session, city officials asked the division how it will address its growing "other post employment benefits" liability.

The school system had a positive balance sheet until fiscal year 2011.

"Ultimately, you want your balance sheet to be healthy," said Nancy Tracy, the city's director of finance.

Chesapeake schools employees are eligible to participate in the division's medical plan while in retirement, though the benefit varies based on years of service and other factors.

Failing to pre-fund enough of the liability could negatively affect the city's credit rating.

As of June 30, the school division's contributions to future retiree health benefits represented just over 10 percent of the annual required contribution, Tracy said.

The school system has made progress on its liability, "but it's obviously not enough," Superintendent James Roberts said.

The division's proposed spending plan for the 2012-13 academic year will be between $50 million and $60 million less than the one for 2008-09, he said.

A committee is currently evaluating the division's options, Roberts said.

Hattie Brown Garrow,757-222-5562, hattie.brown@pilotonline.com