We have been reviewing the financial statements provided to us by Lakeland Community College. We were very concerned about one item in particular, and that was their pension liability of $97 million. Here is the email we sent today to the accounting firm that prepared their financial statements, without audit, so no opinion could be expressed about the statements. We will let you know if we get a response.
Since your firm prepared the Independent Auditor’s Report dated December 18, 2017, for the Lake County Community College District, we would like to ask you about a specific item on their Balance Sheet as of June 30, 2017.
We are a growing group of concerned citizens that are very worried that if we stay on our current path of ever increasing real estate taxes, we are going to price seniors and those living on fixed incomes out of their homes that they have worked all their lives to achieve. To that end, we are reviewing the financial statements of all political sub-divisions in Lake County that receive real estate taxes from Lake County taxpayers.
As you can see, we received the financial information from Mr. Mayher, Treasurer of LCC. Upon reviewing their Balance Sheet as of June 30, 2017, we saw that they have reported a Pension liability of $97,645,117 as a Non-current Liability. Also, they have reported a negative ($69,812,326) as an “Unrestricted” amount in the Net Position portion of the Balance Sheet.
We have read Note 10: Defined Benefit Pension Plans in your “Notes to Financial Statements”. It states: “Ohio Revised Code limits the College’s obligation for this liability to annually required payments. The College cannot control benefit terms or the manner in which pensions are financed; however, the College does receive the benefit of employees’ services in exchange for compensation including pension. GASB 68 assumes the liability is solely the obligation of the employer, because (1) they benefit from employee services; and (2) State statue requires all funding to come from these employers.”……….”The proportionate share of each plan’s UNFUNDED BENEFITS (emphasis is mine) is presented as a long-term net pension liability on the accrual basis of accounting.”
Are we to conclude that Lakeland Community College has a major unfunded pension liability as of June 30, 2017?
This correspondence is also a result of a notification we received from our Congressman David Joyce about the many multiple-employer pension plans that are in serious financial trouble. We hope that Lakeland Community College, if it truly has the unfunded pension liability, is not another one that will be looking for a bailout from the already overtaxed taxpayers.