NCSD board calls special meeting to reconsider early retirement

Members of the Newton Community School District board will hold a special board meeting Monday in an attempt to find a solution to the district’s budget woes.

Board members will reconsider offering an early retirement plan, a move that board president Travis Padget said is designed to get the district’s budget back on track. With the state of Iowa’s budget facing a $37 million shortfall, legislators have told district administrators they can’t expect any fiscal relief, despite hopes the state would raise the Cost Per Pupil, or CPP allotment, which is currently at $6,664 per student.

“If we’re going to use an early retirement it would need to be for budgetary reasons,” Padget said. “We have a budget issue currently and maybe it’s an option we should look at.”

Last offered during the 2013-14 school year, the board voted against offering an early retirement option in October, but NCSD Superintendent Bob Callaghan said the board may need to reconsider the option to provide the district with some much needed fiscal relief. In October, Callaghan said he’d been approached by several teachers about the program.

“We have some that are ready, I’ve already had teachers ask me if we’re going to offer it,” Callaghan said.

Under the early retirement plan, teachers more than 55 years old with 10 years of service in the district are eligible to take advantage of the plan. Those eligible under the plan would receive a payout of 25 percent of their base salary.

During the 2013-14 school year, 10 employees in the district took advantage of the plan, four teachers and six associates. All of the employees who participated were already eligible for retirement. The current retirement matrix requires teachers to reach a score of 88 or higher, which is calculated by the teacher’s age, combined with the number of years the teacher has worked.

Encouraging older teachers to retire helps the district keep costs down, and provides opportunities for younger teachers, but Callaghan said there’s no replacement for the experience older teachers provide.

“It’s really a benefit to students, that experience is hard to replace,” Callaghan said. “You have to weigh the loss against the benefit they provide to the students.”

According to the board’s bylaws, early retirement needed to be approved by the end of December, but Callaghan said the rule is only in place to make sure the district has enough time to complete by April 15.

“We don’t have much time,” Callaghan said. “All the decisions have to be made, the budget has to be prepared, there are timelines out there that are binding and legal. All those things need to be in place before the budget is passed.”

According to Callaghan, the Voluntary Early Retirement Program would take place at the end of the 2018 fiscal year, the last day of work for eligible teachers that choose to take part in the program would be May 31 of this year. Once the position is vacated Callaghan said the district would have to decide whether to leave the position vacant or to fill it with a potentially less expensive employee.

Callaghan said he isn’t sure how many teachers in the district would take part in the program, he’s reached out to teachers to see how much interest exists. Allowing some staff members to take an early retirement could ease the potential for staff cuts in the district, something Callaghan said the district may need to consider as they look for ways to get the budget back in line.

The biggest expense on the district’s budget sheet is its workforce, salaries account for 83 percent of the district’s budget. In order to maintain a healthy fund balance, Callaghan said the district may need to consider reducing staff. Both Callaghan and Gayle Isaac, the district’s director of business services, said they’re concerned about the steady decrease in the district’s fund balance. Isaac said he’d like to see the fund balance between $3 million to $4 million. With only $1.1 million in the district’s account, he’s concerned.

“I’ve been trying to get that message out, they haven’t taken it seriously,” Isaac said. “I’m struggling to get principals to understand the situation, we’re at a point where it has to be turned around.”

Staff salaries are the biggest cause of the dropping fund balance, Callaghan said. The district approved a 2 percent raise for the 2017-18 school year, as well as an additional 2 percent raise in the 2018-19 school year, increases Callaghan said have cost the district an additional $500,000 to $700,000. District officials have been unwilling to make the needed cuts to balance the books, or have hired additional staff which has increased the budget. Principals at each school in the district are tasked with determining their staffing needs, but Callaghan said it’s clear some cuts need to be made. Callaghan said he’s made his recommendations, he’ll have to wait and see what action the board is willing to take.

“I rely on principals to make it work to educate kids with the staff we can afford,” Callaghan said. “Right now we can’t afford all that we’re paying.”

To right the ship, Isaac has proposed the district consider cutting eight certified positions and four non-certified positions, a move he says will help move the district’s budget back into the black and build up the shrinking fund balance. The district will have to tighten its belt to get back on track Isaac said.

“The only way to correct this is to not spend more than you’re authorized to spend,” Isaac said. “We’ve made budget reductions every year, but the settlements [to staff] continue to cost more than the revenue we receive.”

Padget said it’s too early to say how many staff members will opt for early retirement, and whether or not the district will be financially able to accommodate all of the requests. Giving teachers the option to retire early represents a better option than having to lay off staff members, Padget said.

“We’d rather not cut positions, but if we have to, that’s where we have to go,” Padget said. “We’d love to find the money somewhere else.”

Contact David Dolmage at 641-792-3121 ext. 6532 or ddolmage@newtondailynews.com