School Board offering early retirement
The Alta-Aurelia School Board voted to offer early retirement, giving up to four teachers the chance to retire with a bonus one-time offering of 50 percent of their current base salary.
The incentive will be paid out over two payments, the first in July 2020. “That way our management fund doesn’t take the hit all in one year,” Supt. Lynn Evans explained.
Evans recommended offering a cash incentive of 60 percent of current base salary, but the board disagreed and cut it down.
Health insurance offerings of up to four years of paid single insurance were considered, but the board decided against it, as they did not think it would garner much attention. Hybrids of cash and insurance were inadvisable as all insurance offerings would be taxable as soon as they’re combined with cash.
Retirees up to age 65 can, by law, stay on their existing insurance plan with the school at their own expense, if they choose to do so.
A cap of four was set, though the districts have never hit the cap when offering early retirement before. Early retirement will be offered to all teachers who have been with the district for at least 10 consecutive years, but only the first four to accept the offer will be given the cash bonus. The deadline for acceptance will be Feb. 1.
Early retirement is a tool used by school boards to flip their salary schedule, often allowing them to replace retiring teachers, who are high on the salary scale, with younger, less experience teachers lower on the schedule. It was last offered in Alta and Aurelia two and five years ago, respectively.
“It’s easier to prune the budget down now rather than cutting it down later,” Evans said.
Incentive funding of about $170,000 per year will run out in three years. That funding, called Joint Employment Funding, is given to schools for whole grade sharing between districts, and carries over for three years after a successful reorganization soon after grade sharing starts.
“We have to prepare for when it won’t be there, so you have to be mindful,” Evans said, so that budget cuts don’t need to be made later.
Since Alta and Aurelia reorganized as a single district, Evans said the school’s management fund has been healthy. The management fund is restricted in what is can be spent on. Taking early retirement out of that fund also helps to protect the general fund.
Evans previously speculated that two or three teachers might take advantage of the offer.