Denver Public Schools wants to refinance the unfunded portion of the pension system to put the district on better financial footing.
The move would save DPS between $14 million and $18 million a year, said the district’s chief operating officer, Tom Boasberg.
District officials Tuesday made the pitch to the DPS pension board, proposing to pursue a 30-year loan that would give the pension system $380 million to cover its unfunded liability.
The move would fully fund the pension system and reduce the money the district spends every year in pension-related liabilities and retiree obligations, such as health care, Boasberg said.
A-Plus Denver, the outside civic group formed to help improve DPS, called the pension plan “one of the largest risks to the district’s financial stability.”
The district has accumulated $770 million in unfunded liabilities over 20 years. Half that amount was financed in 1997, and the other half is being amortized over a number of years.
Next year, pension/retirement-related expenses will cost the district $90 million. That will continue through 2019, when at least $40 million of debt service will be retired.
The refinancing proposal would provide the pension system $380 million at an expected rate of 6.5 percent. Officials hope to continue to see a return of at least 8.5 percent on the investment every year. Savings would go back into the schools, Boasberg said.
