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Pasco Schools early retirement plans could save as much as $9.4 million

LAND O'LAKES — One of the major planks of the Pasco School Board's cost savings plans came closer to fruition Tuesday as the board told staff to move ahead with a long-awaited early retirement buyout offer.

The incentive, which is not in its final form and would require negotiations with the employees' union, would provide participants with paid health insurance until they become eligible for Medicare. About 640 employees would be eligible, and if all participate the district could save about $9.4 million annually.

Board members have set a yearly goal of $4 million in savings through early retirements. If the offer doesn't get enough takers to reach that number, the district has a secondary plan in the works.

The main savings from the buyouts would come through hiring new employees at lower salaries. Superintendent Heather Fiorentino stressed that a key component of the agreement would be that all new hires would come into the district at a salary no higher than a fifth-year worker.

"It has to happen. If not we lose," chief financial officer Olga Swinson said.

The United School Employees of Pasco would have to accept such terms for them to take effect. USEP president Lynne Webb said her group has approved pay limitations in the past, such as one year when all new hires were brought in as long-term substitutes.

USEP leaders have not decided whether to accept the salary provision, Webb said. Contract talks have been called off for this week but might resume next week.

Webb said one of her chief concerns was that the buyout be available to all employees who qualify by their years of service, regardless of their job. But board members raised a cautionary flag at that idea, saying their intent is to make the offer only to workers who would save the district money.

Some of the lower-paid noninstructional staffers, such as bus drivers and custodians, might cost the district money if they were to take the buyout, employee benefits director Mary Tillman told the board. That's because the board would have to pay for those retirees' benefits without saving much money on the replacements' salaries.

"If it doesn't save us any money, then there's no reason to move forward," said board member Frank Parker, who sits on the committee that whittled the early retirement options from 16 ideas to the final two.

Fiorentino also stressed that the plan cannot decimate students' education.

The district still must meet class-size requirements, she said, and it must have the most highly qualified teachers in its classrooms.

"We need to be mindful of what we are doing to our system long term," Fiorentino said. She said she needs some time to work out details before presenting a final proposal for a vote.

She expected to have a plan for the board by mid-fall, with teachers able to sign up soon after and to retire at the end of the first semester.

Other parts of the board's budget balancing effort include an employee furlough, a property tax increase and higher health insurance premium payments by employees. The final budget vote is scheduled for Sept. 14.

Jeffrey S. Solochek can be reached at solochek@sptimes.com or (813) 909-4614. For more education news, visit the Gradebook at blogs.tampabay.com/schools.

Fast facts

Early retirement options

The Pasco School Board is exploring whether to offer buyouts to several hundred employees as a way to save millions of dollars in salaries and benefits. Here's what's under consideration, with all details still open to change and requiring negotiation. Each plan assumes all new employees would be hired at no higher than a fifth-year salary. Participating employees would be required to work through the end of the first semester, Dec. 22..

Plan 1 is for employees age 55 or older by July 1, 2010, with at least 20 years of Pasco service. The board would provide health insurance for participating employees until they are Medicare eligible.

• Total cost: $16,617,420 over 20 years. Total savings: $9,442,240 annually, if all eligible employees participate.

• The enrollment window would be Oct. 18-20..

Plan 2 is for employees eligible for the board's current early retirement plan, in which the School Board pays part of the penalty early retirees incur in their state pension. Plan 2 would pay the full penalty for qualifying employees. This option would only be offered if sufficient savings are not realized by Plan 1.

For employees age 50 but younger than 55, the board would make up the full Florida Retirement System pension reduction.

• Total cost: $3,200,600 over 20 years. Total savings: $1,165,526.50 annually.

For employees age 55 and older but younger than 62, the board would make up the full FRS pension reduction including the cost-of-living-adjustment determined each year by the state.

• Total cost: $17,435,680 over 20 years. Total savings: $2,847,425.50 annually.

• The enrollment window would be Nov. 1-3.

Source: Pasco County School Board

Pasco Schools early retirement plans could save as much as $9.4 million 08/03/10 [Last modified: Tuesday, August 3, 2010 8:54pm]
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