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Tuesday, December 16, 2008

Why is DJUSD Considering Pay and Benefit Hikes During Fiscal Downturn?

There is no doubt whatsoever that if these were normal economic times, two items on the agenda would be both well-deserved and the right thing to do. But given the fact that the district will be facing a $1.8 million shortfall next year, it makes little sense to increase either salaries or benefits.

On the first item, the board on Thursday night will consider a health and welfare benefit increase.
"The non-represented employee groups (Administrative Leadership Team and Confidential Employees) did not receive increases in either salary or benefit compensation in 2007-2008. Throughout the collective bargaining process in 2007-2008, the District expressed an interest in providing competitive health and welfare benefits to all employee groups."
It continues:
"The District contribution for administrative and confidential employees is $3,004 annually. In a study of thirteen local districts, the average district contribution for health and welfare benefit is $10,900. The current discrepancy has placed Davis Joint Unified in a competitive disadvantage when attempting to hire and retain new administrative and confidential employees. During the last eighteen months, we have experienced multiple hiring challenges; including losing candidates to neighboring districts, due to our reduced level of health and welfare benefit compensation."
What is the fiscal impact of this? For 2008-09, the impact would be $60,000 beginning January 1, 2009 until June 30, 2009. The annual on-going financial impact would be $120,000 beginning July 1, 2009.

According to the staff report:
"The current Board approved operating budget has the capacity to meet this fiscal obligation in the benefits contribution with no adjustments required."
Guess what? That's two teaching positions.

There is no doubt that the level of health benefits provided by the district is embarrassingly low. No doubt. No one can dispute it. The problem is that right now there is one pot of money.

The district is going to have make some tough decisions here. If they indeed go ahead with this increase then the money is likely going to have to come from an administrative position. That likely means an administrative position goes unfilled and everyone else will have to work that much harder. And yet, even then you have to wonder, perhaps if you are looking at $1.8 million in cuts next year and who knows how bad it would be 2010-11, perhaps you do not spend the additional $120,000 on health care. Perhaps you need to bank that money to save two teaching position. And even if you can take out an administrative position, maybe you do that to save two teaching positions. It is the timing of this proposal that is alarming. THey deserve the better benefits, but not now.

The second item is Bruce Colby's contract. Let me state this upfront so there is no confusion. I like Bruce Colby, I think he does a very good job, this is not to be read as a criticism of him. But here's his new contract and they are talking about giving him $173,644. And there is actually a built in increase.
"the amount of the salary shall be increased in the second and/or third year of this Agreement by a fixed five percent (5%) step if the annual summary evaluation for the Associate Superintendent in the preceding year was “fully satisfactory.”"
The district believes that Bruce Colby is indispensable, he may be. But during tight budgets when you might have to lay off teachers, I cannot see the justification of giving a pay raise.

The suggestion is that this will be paid for by leaving an administrative position unfilled, perhaps it will, but perhaps that position could go to keep another teacher rather than give the Associate Superintendent a pay raise.

During these times, you pretty much need to freeze the salaries of your employees.

One other aspect of the contract that is worth noting, the Tahir Ahad-clause.
"Therefore, unless supported by the Superintendent with written a recommendation and approved in advance by the Board of Trustees, while the Associate Superintendent is an employee of the District, the Associate Superintendent shall not perform any work outside of the District for compensation because any such outside work may involve time demands that would render performance of the Associate Superintendent’s duties to the District less efficient.

Further, if the Associate Superintendent is granted permission for outside work for compensation, he shall not employ other employees of the District in enterprises outside of District employment."
Apparently this is now a standard clause, it basically means that there is an outside chance an employee can seek outside employment, but there is no chance they can hire other employees of the district.

In conclusion here, I believe that if this were a normal year, these would be no-brainers. However, given the facts on the ground, even if you balance the books by taking from the administrative pot, it is a bad move and bad publicity. I hope the district does the right thing and tables this discussion until they figure out their finances for the next year and yes that requires a lot of work from Mr. Colby who is already well-compensated for his work.

---David M. Greenwald reporting