By Mariama Tyler Jenkins
As you may know, the Atlanta Board of Education authorized Superintendent Meria J. Carstarphen at its June meeting to prepare for a public referendum in November that would allow APS to issue pension obligation bonds to address our unfunded pension liabilities. At the time, financial analysis showed that APS could expect as much as $80 million in savings that could not only shore up its liabilities but also provide additional dollars for student achievement.
Both then and now, the district stressed that it would pursue such an option only if market conditions were favorable.
The APS Pension Task Force and Robert Morales, CFO of Atlanta Public Schools, worked with consulting actuary firm Segal along with financial advisers and legal counsel this summer to further examine this option. Their latest analysis indicates higher borrowing rates on taxable pension obligation bonds as compared to earlier reports. While lower borrowing rates would have created greater opportunity for savings, current rates and market conditions would reduce potential savings by nearly $30 million.
For this reason, the Board has decided that APS should no longer pursue the pension obligation bond option at this time.
However, with the rising costs of maintaining APS pension plans, the district must continue to explore other options, which the Board is committed to doing. The district also will continue to seek advisement from financial and pension plan experts. For whatever course of action taken, APS will continue to exhibit the highest levels of fiscal fidelity and prudence and keep you informed about our progress.