The shortfall in personnel contributions totaled $5.8 million for locally and federally funded employees while total interest incurred for nearly 1,000 employees reached $1.5 million.
Acting PSS finance director Lori Grizzard said for locally funded employees, the school system recorded a $4.6 million shortfall plus $1.1 million in interest and $1.2 million unfunded liability for federally funded personnel plus $312,000 in interest.
She said PSS paid the retirement contributions of its seven employees — $64,000 for locally funded employees and $8,000 for the federally funded who retired last fiscal year.
The Retirement Fund imposes a 25 percent monthly interest/penalty on those who missed their payment obligations.
Grizzard said PSS has been diligent in paying its Fund contribution since the implementation of the 11 percent employer contribution rate.
Board members and PSS officials said the $7.3 million debt was a result of the changes in the contribution rate — from 36 to 24 and then to 11 percent.
The letters of demand from the Retirement Fund will be enclosed in the letter to be sent by BOE/PSS to the governor and the Legislature.
BOE Vice Chairman Herman T. Guerrero yesterday described the shortfall as “very disturbing.”
“We need to inform the governor and the Legislature about the true picture of our situation here at PSS. They need to know the reality,” he said.
The liability, he added, will affect PSS employees who wish to retire from service.
PSS federal programs officer Tim Thornburgh said the shortfall will also affect the school system’s federal grants and projects.
According to BOE member Marylou S. Ada, the liability will likewise affect the school system’s ability to secure possible bonds and grants.
