School salaries: Rash of retirements hit districts

First Posted: 9/7/2013

ST. MARYS — St. Marys Superintendent Shawn Brown walked into his district’s new teachers meeting a few days before school started last month, and he couldn’t help but notice something.

“It was well over twice the size of the meeting last year,” he said. “There were a lot of new faces there.”

St. Marys had 16 retirements after the 2012-13 school year, and eight of the top salaries it spent last year went to retiring teachers and their severance packages, based on findings in The Lima News’ 20th annual public school salary review.

In St. Marys’ case, that meant $350,000 in severance payouts.

Schools across the region faced a similar glut of retirements, with an average of 7.6 retirements per district and each retiree getting an average severance of $10,879. Severance payments usually include paying out unused vacation and sick time, along with any incentives for retiring.

That put districts on the hook for an average of $82,496 just to wave goodbye to longtime educators.

Saving money

In the end, districts end up saving money, though. All area school districts in Allen, Auglaize and Putnam counties thought they’d end up spending less on overall salary next year for the retired positions. They’ll either replace them with a less experienced person who makes less money or consolidate them into other positions.

Eleven of the 24 districts offered an estimated savings, with an average anticipated savings of $104,167.

“When you do have retirements, it can be a way to save money, in terms of those replacements,” said Columbus Grove Local Superintendent Nick Verhoff, who took on the elementary principal’s duties at the school when longtime principal Jim Kincaid retired in June. The district also hired a new high school principal because of retirement. “It can be pretty significant when you’re looking at a budget that’s increasingly difficult to balance.”

Lima City Schools expects to come out $106,000 ahead in the 2013-14 fiscal year after 32 people retired and 56 people overall resigned, Treasurer Ryan Stechschulte wrote in an email. That 32 retirements was the highest in the area, not surprising given that Lima has the area’s largest school enrollment and budget too.

“Those 32 individuals received severance payments of $229,000, and we are estimating a reduction in salary and benefits of $335,000,” he wrote.

Motivating retirements

Area schools saw a flux in retirements in part because of changes in the State Teachers Retirement System. To keep the fund solvent, Ohio legislators made some changes, including increasing the age and years of service required before full benefits kick in.

The biggest motivator for some retiring educators was an elimination of a higher payout, 88 percent of your final three years’ salary. They faced a deadline to get out before that change happened.

Kevin Wolfe, the Delphos City Schools superintendent, wonders how the retirements may affect education. He acknowledged you don’t want “a grumpy 60-year-old out there teaching kids,” but financially forcing people has consequences.

“If you have a vibrant 60-year-old, it can be a wonderful thing,” he said. “I don’t care if you’re 60 or you’re 20. If you’re still passionate about kids, you can be a great teacher.”

Maintaining a quality education is the real key, Waynesfield-Goshen Local Schools Superintendent J. Chris Pfister wrote in an email. The small Auglaize County district only had one retirement, with a severance payout of $12,913.

“Waynesfield-Goshen is small, very lean, and yet we have been to able to do some great things for kids,” he wrote. “We moved up 125 position in the academic performance index state ranking, from 477 to 352 (of 862), 2011-12 to 2012-13.”

Creative financing

The large number of retirees didn’t necessarily hit a district last fiscal year. For a variety of reasons, some districts pay the severances long after a teacher cleaned out his or her classroom.

At Delphos, the district offered a double severance package to motivate educators to get out after 30 years, when they earned 67 percent of their wage instead of the 88 percent once received at 35 years. The district pays 25 percent of the severance in July, another 25 percent the following January and the remaining 50 percent the next July, in a different fiscal year, said Brad Rostorfer, the district’s treasurer.

In addition to the $53,601 in severance paid last year to retirees, the district already paid another $20,073 to people taking advantage of it in July.

“They had to decide if they were going to 35 years or not, which probably was a much better than what our incentive called for,” he said. “It served its time well, though.”

Negotiated contracts can also decide when those severance payments are made, Wapakoneta City Schools Treasurer Angie Sparks wrote in an email. Wapakoneta, one of the largest districts in the area, will pay even more to the 23 people who retirement in the 2012-13 group next year than this year.

“Per the negotiated agreements, severance payments will be made on or before Feb. 1 in one installment in the next year following retirement,” she wrote. “Therefore, the district will incur an additional $237,869.15 in severance payments during (fiscal year 2014) for those that retired during the 2012-2013 school year.”

Columbus Grove faces a similar situation. While it paid the severance for its two retired administrators already, the three teachers who left will be paid their severance in January.

Back in St. Marys, Brown said he hadn’t considered the possibility of paying the severance in different years.

“When things get tough, you have to get creative,” he said.

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