SUNNYSIDE UNIFIED SCHOOL DISTRICT NO East Ginter Road Tucson, Arizona Minutes of the Study Session Board Meeting of the Governing Board
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1 SUNNYSIDE UNIFIED SCHOOL DISTRICT NO East Ginter Road Tucson, Arizona Minutes of the Study Session Board Meeting of the Governing Board PLACE: DATE: TIME: Governing Board Room, 2238 E. Ginter Rd., Tucson, AZ Tuesday, April 25, :30 PM The Study Session convened at 5:35 p.m. Governing Board Members present: Buck Crouch, Eva C. Dong, Daniel Hernandez (via conference call), Roberto Jaramillo, and Beki Quintero. Approval of Agenda Board Member Beki Quintero moved, seconded by Board Member Eva Carrillo Dong to approve agenda items as submitted. Motion Passed. GENERAL FUNCTIONS Educational Services, INC (ESI) and Post-Retirement Dr. Debra Bergman, Chief Human Resources and Organizational Development Officer and Hector Encinas, Chief Financial Officer, provided information for the Study Session on the District policy about Educational Services, INC (ESI) and Post-Retirement (Post R) and the Retirement of Professional and Support Staff Members policy- GCQEA, it helps to retain highly qualified and experienced employees with a reduced employer cost. Through the post-retirement employee option (PREO), it allows employees that qualify for normal retirement (80 points or age 62 with 5 years service) to retain the Arizona State Retirement System (ASRS) pension and to return to the District at a lower salary. ESI services allow a retiring employee to return to work immediately without jeopardizing retirement pension through their leased employee service. This service brings back to the district, besides retaining employees, a savings by no longer having to match ASRS contribution and insurance benefits (average savings per employee at about 20%). Post-R employment, once approved, will be offered for the second year a temporary contract for each year then forward. They are treated like a new employee and hired at a salary not less than step one in the position they are re-hired for. Comparison of employee costs were viewed and discussed for new employees hired versus return to work employees. Overall the return to work employees are at a savings reduction. Additional Governing Board questions are fielded on the insurance rates and reimbursements, qualified candidates for hiring, holding of employees for advancement to higher levels and providing experience, and hard to fill positions. Steve Holmes, Superintendent, addressed Governing Board members question of the policy and if changes were to be made when would it be ideal? It would be too late for the school year and would need to be looked at closely with scenarios with possible grandfathering as needed. ADJOURNMENT Board Member Eva Carrillo Dong moved, seconded by Board Member Beki Quintero to adjourn the Study Session at 6:29 p.m. Motion Passed.
2 THE WHAT AND WHY OF ESI AND POST R Dr. Debra Bergman Mr. Hector Encinas
3 ESI and Post R Purpose of the study session is: 2 To explain what District policy states about ESI and Post R To Explain the rationale of whyesi and Post R is beneficial for employees and the district.
4 District Policy 3 Retirement of Professional & Support Staff Members referred to as GCQEA: Program Goal In an effort to retain highly qualified and experienced employees and at the same time reduce employer cost, the District has initiated a staff post-retirement employee option (PREO) for those teachers, administrators and support staff employees who meet the requirements for Arizona State Retirement System (ASRS). The provisions of the staff PREO allow employees that qualify for normal retirement (80 points or age 62 with 5 years service), to retain the ASRS retirement pension, and return to the District at a lower salary, and no district employee benefits under a contract with a District Selected contractor without placing their ASRS retirement in jeopardy.
5 Educational Services Inc.(ESI.) 4 ESI HAS BEEN THE LEADER OF THE RETURN TO WORK EMPLOYEE LEASE BACK PROGRAM IN ARIZONA SINCE CURRENTLY THEY SERVICE OVER 160 ARIZONA SCHOOL DISTRICTS, COLLEGES, CITIES AND TOWNS.
6 Educational Services Inc.(ESI.) What is a return to work program? 5 Currently participants in the Arizona State Retirement System (ASRS) who retire and wish to return to work immediately can work only part-time with an ASRS employer without jeopardizing their retirement pension. By utilizing the services of ESI, a retiring employee can return to work immediately and work full-time in their current position without jeopardizing their retirement pension. In other words; an ESI employee receives their retirement pension plus a salary from ESI for an increase in pay up to 70%. This allows the employer to retain experienced employees that were planning on retiring as well as save money.
7 Educational Services Inc.(ESI.) How Does ESI Work 6 Once an SUSD employee has determined they want to retire they meet with their immediate supervisor/principal to discuss being recommended for hire through ESI. The supervisor/principal has to support the employee s request. Once the SUSD employee officially retires, HR submits a position request to ESI. ESI offers the retired SUSD employee a contract once they have received the HR paperwork for the retired employee. The retired SUSD employee signs the ESI contract and they begin work in SUSD as an employee of ESI.
8 Educational Services Inc.(ESI.) 7 How does utilizing employees from ESI save the school district money? Due to the fact that Districts do not bring their employees back at 100% of what they previously made, an immediate savings is recognized. Sunnyside brings retired employees back though ESI and pays 80% less ASRS required alternate contribution rate (ACR) of their last salary, but not less than minimum wage. The District also saves by not having to match the ASRS contribution and insurance benefits. The average savings per employee is around 20%. The District or the employee can terminate the ESI contract with a thirty (30) day written notice.
9 POST -R A RETIREE DESIRING TO RETURN TO DISTRICT EMPLOYMENT AFTER COMPLETING THEIR FIRST YEAR UNDER THE DISTRICT S STAFF POST- RETIREMENT EMPLOYMENT OPTION (ESI) AGREES TO THE FOLLOWING: 8
10 Post -R First they must have a recommendation from their principal or immediate supervisor. 9 The retirees recommendation must then be approved by the Superintendent and Governing Board to return. Once approved the second year retiree is issued an employment agreement, which is temporary each year the employee stays with the district. A Post -R employee is extended all benefits, which consists of accrual of leave, vacation if applicable, and insurance. A Post R employee is treated like a brand new employee and hired at a salary not less than step 1 of position in which they are re-hired.
11 ESI and Post -R Salaries 10 Certified Retiree Classifications are: Teacher, librarian, counselor, psychologist, nurse, prevention specialist, program facilitator, or any position for which the salary and fringe benefits are agreed upon with the Sunnyside Education Association. The retired certified employee will be placed on the appropriate scale and salary for the position equal with the employee s teaching experience through step 10 plus 1 as determined by the Salary Schedule in effect for the next school year. The initial Base Salary determination will then be reduced by the amount the District is required to pay ASRS as an Alternate Contribution Rate (ACR) as determined by ASRS (capped at the current 7.43% ACR reduction. The District is absorbing any increases beyond this amount) For each subsequent year that the retired employee continues to work for the District their salary shall be determined by taking the prior year s base salary, along with any increase given to other employees in the same classification as the retiree, and then the ACR reduction is applied.
12 ESI and Post R Salaries 11 Certificated support staff retirees returning in the classification of administration: Are placed on the appropriate scale and salary for a position equal with the employee s prior experience in the position before for the next school year (but no less than step of appropriate position in the PNT/Administrative Salary Schedule). However, in no event shall the returning retiree s initial salary exceed eighty-five percent (85%) of the most recent full year s contract worked by the employee prior to retirement, but not less than step 1. This initial base salary determination will then be reduced by the applicable ACR (currently capped at the 7.43% as is done for Certified Personnel) For each subsequent year that the retired employee continues to work for the District their salary shall be determined by taking the prior year s base salary, along with any increase given to other employees in the same classification as the retiree, and then the ACR reduction is applied.
13 ESI and Post R Salaries 12 Support Staff Retirees returning in the classification of support staff employees: Are placed on the appropriate grade and wage for a position equal with the employee s prior experience in the position before retirement through step 10 as determined by the Salary Schedule in effect for the next school year. However, in no event shall the returning retiree s initial salary exceed eighty-five percent (85%) of the most recent full year s contract worked by the employee prior to retirement. This initial base salary determination will then be reduced by the applicable ACR (identical to Certified application). For each subsequent year that the retired employee continues to work for the District their wage shall be determined as with any other employee based on the Classified Salary Schedule.
14 Classified Example
15 Certified Example
16 Administrator Example
17 Savings to District Employee Name Department Site Account Code FTE FY 17 New Emp Cost Savings Mid-Point Cost Savings Classified $1,080,330 $1,175,727 $95,397 $1,367,958 $287,628 New Admin Cost Savings Mid-Point Adm. Cost Savings Admin $1,021,041 $1,047,744 $26,703 $1,227,548 $206,507 New PNT Cost Savings Mid-Point PNT Cost Savings PNT $ 655,651 $657,040 $1,389 $770,669 $115,018 New Teacher Cost Savings Step 11 MA Teacher Cost Savings Certified $ 1,565,808 $1,467,196 -$98,612 $1,788,500 $222,692 Mid-Point New employee cost Savings TOTAL $ 4,322,830 New Employee Cost Savings $ 4,347,707 $24,877 $ 5,154,675 $831,845
18 ESI and Post R Savings For the 2016/17 School Year the following 139 employees return as either an ESI or Post R employees. 17 ESI Administrators 3 Certified 15 PNT 1 Classified Post R Administrators 13 Certified 39 PNT 13 Classified The 139 ESI and Post R employees saved the District somewhere between $150,000 to $956,00.
19 ESI and Post R Savings The following occupations outside of education are not penalized for seeking employment after retirement: 18 Military Police Department Fire Department Occupations Medical Field Lawyers Executives Each of the occupations above can fully retire, gain their certification and go into the education profession or any other profession without any penalties.
20 ESI and Post R 19 QUESTIONS?
21 SUNNYSIDE UNIFIED SCHOOL DISTRICT NO East Ginter Road Tucson, Arizona BOARD ACTION ITEM MEETING OF: April 25, 2017 BOARD AGENDA NO.: General Functions #1 TITLE OF AGENDA ITEM: ACTION TYPE: PREVIOUS ACTION OF AGENDA ITEM: SUBMITTED BY: Educational Services, INC (ESI) and Post-Retirement Information Dr. Debra Bergman, Chief Human Resource Organizational Development Officer DESCRIPTION/JUSTIFICATION: The purpose of the Study Session is: 1. To explain what District policy states about Educational Services, INC. (ESI) and Post-Retirement (Post R). 2. To explain the rationale of why ESI and Post R is beneficial for employees and the district. POLICY CONSIDERATIONS: LEGAL CONSIDERATIONS: BUDGET INFORMATION: REVIEWED BY: Mr. Steve Holmes, Superintendent SUPERINTENDENT'S RECOMMENDATION/MOTION: Information item. ATTACHMENTS: Name: Description: Type: ESI_and_PostR_Presentation_April_2017.pptx ESI and Post R Presentation Cover Memo CREATION: Date/Time: Department: 4/20/2017 3:30:20 PM Human Resources APPROVALS: Date/Time: Approval: Department: 4/21/ :38 AM Approved Superintendent
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