Tomorrow evening (Tuesday, 7:30 PM, TE School District Administrative office) at a special school board meeting, there will be an opportunity for interested parties to voice their opinion on the Valley Forge Elementary School tennis courts, and whether or not to demolish. Tonight Finance Committee will meet at 7 PM, followed by the Budget Workshop II at 7:30 PM at the TE School District Administrative offices. Click here for agenda.
The Budget Workshop II will continue the 2013-14 budget discussion, looking at expenditures and a projection model. I wonder if T/E administrator supplemental retirement bonuses and the potential impact on the budget is part of the discussion. Short answer, I doubt it. When the school board approved the ‘Administrator Compensation Plan’ which was buried in the January consent agenda, it was suggested that the process was “routine” and that any discussion on the bonus and compensation plan was to occur “after” the vote was taken.
Admittedly, in a budget the size of T/E School District, the one-time bonuses paid to the administrators is probably not a big deal – looking at the list below of the administrators and their bonuses, which was included with the School Board’s January agenda materials, the total is around $180K.
Administrators, base salary and one-time bonus, effective July 1, 2012 – June 30, 2013:
It is my opinion, that the recently approved compensation plan for the administrators contains something far more costly than $180K one-time bonus, and something that should have been publicly discussed – the ‘Retirement Supplemental Pension’. The newly signed Act 93 Agreement (the Administrator Compensation Plan) of January 29, 2013 to June 30, 2017 supersedes the prior plan that covered 13 years, July 1, 2001 – June 30, 2014.
When the previous administrator compensation plan was signed in 2001, TESD was not facing the dire economic situation and level of cost-cutting measures as is the case in 2013. The District’s multi-million dollar deficit has required the Board to look at making difficult decisions to cut-costs, including outsourcing of support staff, possible demotion of teachers, increase class sizes, etc. We have seen educational programming affected by cost cutting measures — example, the ‘Foreign Language in the Elementary Schools’ (FLES) program is no longer offered nor Latin in the middle school. For the 2013-14 school year, TESD will be the only school district in the state to institute teacher furloughs. All of this to stave off the financial cliff that TESD, like every other school district in Pennsylvania, is facing.
For 13 years the T/E administration compensation plan included longevity incentive bonuses – a so-called ‘Retirement Supplemental Pension’ where administrators receive an additional bonus check when they retire, based on the years they have served as administrators in TESD.
For retiring TESD administrators, you apply the appropriate percentage from the schedule below to the final year’s base salary:
- at least 5 – but less than 10 years: 45%
- at least 10 – but less than 15 years: 60%
- at least 15 – but less than 20 years: 75%
- at least 20 – but less than 25 years: 90%
- 25 years or more: 100%
Considering that the former administrator compensation plan covered 13 years (2001-2014), a complete and thorough analysis of the entire agreement, including the ‘Retirement Supplemental Pension’ would have been fiscally responsible. It appears that those individuals affected by the administrator compensation plan are the ones that reviewed the plan and presented it to the Board. The newly signed Administrator Compensation Plan is a 4-year plan covering January 29, 2013 – June 30, 2017. This ‘routine’ consent agenda item contains the same language for the long-term one-time retirement bonus as was contained in the previous plan.
What exactly does the ‘Retirement Supplemental Pension’ mean to the taxpayers of TESD? In researching the 26 administrators named above, how many are in the category that could retire and receive this one-time payment? The District has announced the retirement of Tom Tobin this year as Devon Elementary School principal. If I understand the Retirement Supplement Pension correctly, with 21 years of service as a TESD administration, means that Tobin will receive a one-time payment equal to 90% of his $155K salary or approximately $139,500.
Here’s an interesting example of the Retirement Supplemental Pension … the director of Technology, Robin McConnell, currently has 39 years of service with the District. According to the compensation plan, McConnell will receive a retirement bonus equal to 100% of his salary or $176,823 upon retirement. Many of the 26 administrators have been with the District a long time, which means there could be a number of retirements before the expiration of the new administrator compensation plan in June 2017. It should be clear that the one-time payment of the Retirement Supplemental Pension is in addition to their regular pension.
I don’t know about you, but I don’t know too many companies who pay longevity bonuses at this level anymore; unless perhaps you are president or CEO of the company. It seems astounding to me that the School Board can be considering outsourcing of TENIG workers, going after nonprofit companies for property taxes and instituting teacher furloughs in 2013/14 yet no discussion of the removal of the Retirement Supplemental Pension from the administrator compensation plan. Or, if not removed entirely from the plan, what about a decrease in the percentage received? Why no discussion?
Does the School Board know how many administrators could qualify for this retirement bonus by the expiration of the administrator compensation plan in June 2017? Also, according to Dan Waters contract, he too will receive this one-time bonus when he retires. With his years of service in TESD, he will receive his one-time payment at the 100% level of his salary. Considering the state of the economic situation in this school district, it is incredible that this information was deemed unnecessary for public dialogue. So much for all the discussion that the teachers and TENIG employees need to ‘give back’ to the District. Where was the School Board on the administrators ‘giving back’ when they approved the ‘Retirement Supplemental Pension’ as part of the administration compensation plan? Where do these one-time retirement payments appear on the budget? Where does the money come from to pay for the one-time retirement supplement pension bonus?
Remember, there were no changes made to the levels of this one-time payment in the new plan, and the public was not permitted to discuss the issue until after the vote to approve the administrator compensation plan!