Longtime employee benefits to be paid over time
Lakeville Area School District officials are taking steps to change employee contracts to end big retirement payouts.
Under the district’s long-held “defined benefits” plan, multiple longtime district employees who leave or retire are eligible for what can be a six-figure payout in unused sick time and benefits, said Superintendent Lisa Snyder.
The plans allow departing district employees a choice to receive the money, typically deposited into a health care savings fund, in a lump sum or over time.
Most of those employee benefit packages also include fully district-paid medical coverage until they would qualify for Medicare.
All of the district principals and 800 teachers are grandfathered in under the current contract benefits.
In addition, former district employees who may be working elsewhere could be eligible for severance benefits if they met the various length-of-service and retirement-age benefit provisions, said Tony Massaros, the district’s executive director of administrative services.
Former Superintendent Gary Amoroso left the district for another job mid-contract in 2011 with $360,000 in severance/unused sick days and health insurance benefits that caused citizen uproar and prompted School Board members to change benefit packages for new top employees, including current Superintendent Lisa Snyder.
“He’s the last superintendent to get that payout,” Snyder said in an April 29 interview.
She said the district can no longer afford those huge one-time benefit payouts that are impossible to predict accurately and financially challenging to manage.
“We really can’t afford to operate like that,” Snyder said. “We need to know what we’re budgeting for.”
Teacher contracts were already changed so as of December 2011 any new teacher has a defined contribution of $3,000 per year deposited by the district to their health account, according to the 2011-13 teachers contract.
Snyder’s contract also includes the change to the district-funded “defined contribution” plan, one of the first superintendents in the state to agree to those terms, which she said the School Board insisted upon when she was hired in 2011.
While longtime district employees are grandfathered into their previous benefit plans, the new “defined contribution” plan is also the standard for all new district employees, Snyder said.
Four new principals will be under the new terms this year – Chris Endicott, incoming principal at Century Middle School who was hired last year, and the three new elementary principals just announced to replace elementary school principals set to retire in June at Orchard Lake, Eastview and Christina Huddleston.
Those retiring principals – Karen Roos, Richard Oscarson and Amy Schmidt – are eligible to receive benefit payouts, according to Massaros, who said he did not yet know the amount the district will pay.
Like Snyder, Randy Anderson, the district’s executive director of business services, has a contract that caps severance payouts for accumulated unused sick leave to 130 days and obligates the district to pay $7,000 annually into a health reimbursement account that goes with the employee when they leave the district, thus eliminating the big one-time benefit payouts.
Snyder added that as current cabinet members’ and principals’ employment contracts expire, the district is also proposing modifying benefit packages to align with the parameters in Anderson’s contract.
Last week, Snyder recommended the board “sunset” the cabinet-member contracts of Barb Knudsen, executive director of teaching and learning, and Renae Ouillette, executive director of special education.
She proposed paying both employees’ earned benefits from their current contract in installments, offering both new three-year contracts under the “defined contribution” terms like Anderson’s and included in new employee contracts.
To date, Ouillette has earned almost $80,000 in benefits, which Snyder proposes the district fund at $952 per month for seven years.
Knudsen, a 35-year employee, meets all time and age qualifications for a total payout of $280,000, Snyder said in an interview.
In a board document, the amount was estimated at $204,000 because it did not include all her unused accumulated sick pay.
Snyder recommended the board start paying Knudsen’s $204,000 of earned benefits at monthly increments of $5,666 for the next three years.
At the same time, the district would contribute $7,000 per year for both employees to medical accounts under terms in a new contract, yet to be presented.
Board members indicated support for meeting the district’s contractual obligations and ensuring employees who earned their benefits received what was promised them, but had numerous questions about details and implications of the contract changes and tabled action on Snyder’s request.
Board Member Bob Erickson asked for an itemized list of costs associated with each current contract benefit and how much would be reduced going to the new contract benefits.
He cited concerns that approving the contract parameters would essentially ask board approval for other employee contracts sight unseen, as Snyder said she would use the board’s action to help her prepare the 2013-15 contracts that will come to the board next month.
While retirement benefits are clearly defined in Anderson’s contract, another provision has raised some questions.
The provision states he “shall have access to all fringe benefits provided other licensed employee groups that may be in effect or come into effect during the duration of this Agreement.”
Massaros said the provision does not mean Anderson would be entitled to all retirement benefits as other employees.
“His retirement benefits are clearly stated and reflect the intent of the School Board to make these changes as we move forward,” Massaros wrote in an email.
Erickson said “access” doesn’t grant Anderson the right to receive additional fringe benefits “without a change in the agreement language.”
“In my opinion,” Erickson said, “ ‘access to’ isn’t the same thing as being eligible to receive a benefit paid for by the district.”
Massaros said that the language is “obviously a little unclear,” but added, “I do not think there is any doubt on either the part of the Board or Randy (Anderson) what was intended here.”
The provision concerns Randy Pronschinske, a former Lakeville School Board candidate and local representative of the education advocacy group LakevilleStudentsFirst.org.
“The question we should be asking ourselves is why do we leave ambiguity in the contract?” he said.
Pronschinske said the language makes sure that that person always has the best benefits currently provided in the district.
The fringe benefit provision in Anderson’s contract is not included in those for Snyder, Ouillette or the district’s principal contracts.
Massaros said whether the provision remains in the new contracts is a decision the Lakeville School Board will have to make when the contracts are renegotiated.