Second Assistant Principal Pay Raise

This past October as part of the 2015-16 fall budget update the district administration proposed a 2nd pay raise for Assistant Principals (APs). The proposal cost an additional $80,000. It failed in a 3 to 3 vote. Later the new expenditures was sent to a board work session and then the item passed 5 to 1 at the November board meeting.

In June, as part of the 2015-16 budget APs were given a 2% pay raise. That has been standard the past few years. A few months later in October the board was told APs needed their pay raised again, mid-year, because there was some kind of error or oversight in how their pay was set for 2015-16.

You have to realize the administration wants to boost pay and give employees extra pay raises. They gave teachers 3 pay raises this year, and were looking to give AP’s a second pay raise. I understood that, but my point was when the administration presented the 2015-16 general fund budget (and the board approved it) it is spending more money than is coming in this year and digging into savings. While this new expenditure may have had its reasoning, financially it wasn’t wise at this time. I also made the point, the capital maintenance budget will be presented in December, and it is facing a $1 million deficit (actually that figure came in at $2.2 million due an increase in spending).

Prudent budget management would first balance the general fund budget. Second balance the capital maintenance budget. Then third consider spending money on new items like a 2nd Assistant Principal pay raise for 2015-16.

Next we were led to believe the APs had their contracts and we were legally bound to give them the additional raise and make do it now. I had my doubts about this legal requirement.

Phil Bowers and Henry Wilson (seeing this for the first time) naturally wanted more information and the documentation. Basically all that was presented to the board was the cost of the 2nd pay raise and a sense of urgency that it needed to be implemented now.

For years APs were paid a base salary of their daily teacher rate (which is determined by their college degree and years of service), times the number of days of the AP’s contract (which is longer than a teacher contract), plus a fixed supplement. Until about 2013 the base of APs was paid off the district’s teacher pay scale.

That was changed in 2013 because the state required the district to give teachers step increases, but no one else. So our district and many others gave teachers the required step increase, but most everyone else (including administrators) a 2% increase. Logistically to make that happen the base salary of APs was switched from the teacher pay scale to what they called the TA scale, which was an administration pay scale for APs. APs were paid off the TA scale for the next three years, rising 2% a year. This past year the administration decided to shift APs back to the teacher scale, because it would give most of the APs a pay raise.

Was there an error in calculating AP pay for the 2015-16 budget? No. APs were paid using the TA scale, as they had been paid going back to 2013.

Was the district bound by contract or the law to give APs the 2nd pay raise, and to do it mid-year? We learned in the work session the answer to that was “No”. We have been paying APs off the TA scale for three years. It wasn’t a legal issue before nor was it now.

Finally, the district administration came to the conclusion they wanted to put the APs back on the teacher scale because they saw it as “fair” and it would raise the pay of most of the APs. In sum, it was a request for a mid-year pay raise.

The way the board process works is this way. Most items need to go to committee or to a board work session. There proposals are put forth and questions are asked and answered. Discovery occurs in committee meetings or work sessions.

An item should be pushed up to the board only after that discovery has occurred, and the board is in the action phase. At a general board meeting the trustees already had their questions answered and know the issue. Then they officially consider the proposal, state why they are for or against it and then vote on it.

If at the general board meeting, an item is proposed for a vote and trustees are asking question after question and have a dazed look in their eyes (like was the case at the October meeting when the 2^nd AP pay raise was first presented), the leadership brought the item to the board for action too soon or didn't run it through the committee process/ work session like it should have.

That was part of the problem here I think. The idea didn’t first go to committee and was just hoisted on the board at a general meeting, no supporting documents and expecting action.

Once the questions were answered and the reasoning was nailed down in the work session — this was a request for a mid-year pay raise for APs and they were using the switch back to the teacher scale as the basis for the raise, I found myself back to my original reasoning.

The district didn’t have the revenue to cover this additional expense. The budget passed in June had more expenditures than revenue coming for the first time in about 10 years. Going into the November board meeting, the general fund budget had $375,000 more is going out than the revenue coming in. The capital maintenance budget is short at least $1 million.

I said, if you want to give APs a 2nd pay raise, that’s a reasonable proposal, but you should first cover those things you already committed to like the general fund budget and the capital maintenance budget. Then consider spending on new items when you have additional revenue coming in. If revenue continues to grow, that could be as soon as next year, and you can make the extra AP pay raise the top priority in the 2016-17 budget starting July 1, 2016.

I’ve served on the board 12 years and with many trustees. With some board members 98% of the time they will vote for what the administration puts in front of them without question. Some board members frankly didn’t care what the reasoning was on this, whether it was consistent or not didn’t matter to them. The administration wanted it, and that was good enough for them. Some board members were frankly confused by the administration’s initial presentation and I fully understood why. Once it was explained, they were OK with it.

Myself I never got beyond the deficit spending aspect of it, and that leads to my next point how the budget management of the district is decaying again.

There are a few basic financial principles that will determine your financial fate in the long-run. If you don’t follow them like the district/ board didn’t prior to 2010, it will lead to trouble. If you follow them, like we did from 2010 into 2014, it will keep you out of trouble.

1) Spend no more than your revenue. 2) Better yet, budget to spend less than your revenue so when new expenditures crop up during the year, you’ll have the revenue to cover it. 3) Don’t use one time money to cover recurring expenditures. 4) During good economic times, save money for a rainy day because the cash comes handy when recessions hit.

Every one of these principles has been violated with the passage of the 2015-16 budget and this first budget amendment for the year. When the general fund budget was passed in June, it had more expenditures than revenue for the first time in years. As well intentioned as the board/ district was, that 3rd teacher pay raise broke the budget and pushed the district into an operating deficit. The gap was paid for with one-time money or a hit to savings. The belief is revenue will continue to grow, and the district will grow out of the cash flow deficit in time. Maybe not.

In contrast the previous five years or so we always budgeted to spend less than revenue flowing in. We never relied on one-time money to fund a recurring expense. If expected revenue was $100 million, we’d budget to spend, let’s say, only $99.5 million. The difference is called a contingency or the few hundred thousand dollars of revenue set aside to cover mid-year costs that cropped up or if the administration came to the board wanting to spend on this or that new item. If all the extra revenue wasn’t spent, at the end of the year it went into savings, so savings grew over time. That was prudent financial management. What we are seeing now isn’t — a bad habit to fall into.

At the October meeting, the finance director said the 2^nd AP raise was only $80,000. It was so small relative to the rest of the budget, the board should have no issue spending that much and just passing it.

My initial thought was, if the district wasn’t already spending more money than it was bringing in, I’d agree. If it had prudently budgeted a contingency, I’d agree. Neither was the case though.

Then I thought about budget management; what it is and what it isn’t. Budget management isn’t when there is a new expense that crops up during the year, just running back to the board and asking for more money. Where is the management skill in that? A secretary can do that.

The skilled budget managers would look at the situation and say $80,000 or 0.00073 of the budget isn’t a lot. The administration was given $4 million more this year, much more than they expected and the administration has a budget of $109.3 million in total. They’d find something in current budget that is a low priority, that could be reduced and then shift over $80,000 to cover this new expense. That’s what managers do, they manage/ shift/ reallocate existing resources during the year just like this.

When managers can’t or refuse to manage a 0.00073 financial change, and then run to the board for more money, they abrogate their role as managers in my eyes. If it is a new expense that is necessary or they just have to have it (like this 2^nd AP pay raise), they should be able to address it with a small amount of budget management or reallocation.

To me this wasn’t a request that should have come to the board. It was a management issue. If I was sitting on the board with a majority, I would have pushed their $80,000 request back and said you come up with an alternative using the $109 million we already gave you this year. I could think of plenty ways to find that money, but again, I’m not the manager of the budget from July 1 to June 30. My responsibility is just to pass the budget before July 1.

In sum, all administrations have been this way; they can't handle or field anything new unless they are given more money. Very little budget management skill in the district office.