Inside the Numbers

Assistant Superintendent Mays Kakish stated to the board last week that the Superintendent's Succesor Agreement (HIS CONTRACT EXTENSION!!) has "No fiscal impact" on the district's budget. It seems "No fiscal impact" would mean no increase.

I beganwondering....

If there is no increase, why would the board refuse to provide transparency to their process. Why would the superintendent claim attorney-client privelege if the district's attorneys believe the board's agenda didn't violate the Brown Act. What are they hiding? So I thought I'd take a look at the numbers. 

I am not an accountant or retirement specialist so I'm sure I may be missing something. I would love to see Kakish's numbers but unless the board agrees to bring back the issue, we probably never will.

Here are the key points I learned: 

  • The superintendent's annual family health coverage would have to be $35,302 for there to be no fiscal impact on the district.
  • The superintendent will receive $3,300 more a month ($39,600 per year) for every year of retirement as a result of the new contract.

 

This is pension spiking. It is morally wrong. Who pays for this? The other members of STRS? Tax payers? Only administrators have the ability to participate in pension spiking. Teachers negotiate collectively and don't have the possibility to have their benefits rolled into their base salary. But administrators wouldn't be able to do this if the board didn't allow it.

Why aren't more teachers upset? Why are only a few saying anything? It is their retirement system. And with STRS being in the spotlight with our state's financial condition, they are the one that should be outrage. 

What is the fiscal impact on BUSD? 

Section

7/1/08 - 6/30/12

Annual

    3 Years

7/1/11 - 6/30/14

Annual

    3 Years

BUSD Fiscal

Liability

Rate of Compensation

$152,250

$456,750

$182,845

$548,535

$91,785

Step up Compensation

None

None

$3,085*

$9,256

$14,032

Bonus for Doctoral Degree

$1,000

$3,000

None

None

-$3,000

Car Allowance

$7,200

$21,600

None

None

-$21,600

Health and Welfare

50% of Family Coverage

???

None

None

???

STRS Employer’s Contribution (8.25%)

$12,560

$37,680

$15,339

$46,017

$8,337

STRS Employee’s Contribution

(8.00%)

 

$12,200

$36,600

None

None

-$36,600

 

 

 

 

Increase

$52,954

 *Step compensation for years 2 &3 divided by 3 to get 3yr avg of contract

 

In order for their to be no fiscal impact on the district, 50% of the superintendent's health coverage would need to equal $52,954 over three years. So, $52,954 divided by 3 = $17,651.

 

What is the fiscal impact on the State Teacher's Retirement System?

Assumptions I made:

Age 60

Retire 2014

Years in STRS 30+

Average monthly pension based on old contract $12,708 - Average annual pension $152,496.           

Average monthly pension based on old contract $16,008 - Average annual pension $192,096 

 

Annually

10 years

20 years

Pension with Previous Contract

$152,496

$1,524,960

$3,049,920

Pension with New Contract

$192,096

$1,920,960

$3,841,920

Pension Increase

$39,600

$396,000

$792,000

 

 

Link to the STRS benefits calculator

http://www.calstrs.com/calculators/strsbene12.plx