Johnston County Schools has been asked to pay $637,538.71 to the State Retirement system following the retirement of former Superintendent Dr. Ross Renfrow.
The State Employees’ Retirement System sent the bill to the school district this month because Dr. Renfrow’s pension exceeded a state cap. Renfrow had an annual salary of $223,189 during the 2018-19 fiscal year. He also received a $75,000 severance when he retired on August 28th. In addition, the school board agreed to pay Renfrow for all his accrued and unused annual leave days, and longevity earned through the date of his resignation.
School board attorney Jimmy Lawrence told JoCoReport the school board has appealed the $637,538 bill from the retirement system and will not being paying the amount at this time, pending the appeal.
Five years ago, the NC General Assembly passed anti-spiking laws creating a cap for employees earning $100,000 or more per year. The law is designed to prevent employees earning more than $100,000 from inflating or ‘spiking’ their salaries by converting perks to salary in their final years before retirement. It also places some of the burden on their retirement pension on public schools and community colleges across the state when their top leaders retire.
In 2016 when former Superintendent Dr. Ed Croom retired, the state retirement division billed Johnston County $435,913.54 for his pension. Initially the bill was for $508,346.96 before it was recalculated. Johnston County Schools appealed and a judge ruled in favor of the County saying the state did not follow proper procedures. The state appealed the ruling and a decision on Dr. Croom’s pension bill is still pending before the NC Supreme Court. Dr. Croom was paid $215,022 his final year with Johnston County Schools.
At issue is whether the Retirement System violated the law when it set the formula for determining the cap on retirement benefits without following the procedures for adopting an administrative rule. Traditionally, state pensions are set based on the retirees highest four consecutive years salary.
Officials expect it to take several months before Dr. Renfrow’s pension payment appeal is settled.
Johnston County Schools is currently in the midst of a budget crisis and will ask County Commissioners for $8.8 million in December. If commissioners fail to fund the request, interim Superintendent Dr. Jim Causby says the school district could run out of funds in April 2020, well before the end of the fiscal year on June 30, 2020. Causby blame the funding shortfall on several factors including a $1.2 million increase in utilities this year, a $3.5 million increase in salaries, and $2.57 million in additional needs for the Exceptional Children’s Program that wasn’t funded by the state.
Causby says the district has just over $330,000 in reserve funds not currently earmarked. If Dr. Renfrow’s pension bill of $637,538 is upheld, Johnston County Commissioners would likely be asked to pay the amount.