Friday, September 10, 2010

Would YOU Spend $200K to Save $1,000,000?

Are you kidding us?  Who WOULDN'T?

Here are some simple numbers:
1. The top 20 highest paid SPEA members will each be at least 57 (minimum state retirement age) in 2011.
2. The top 20 highest paid SPEA members will each have at least 32 years in  by 2011.
3. That qualifies EACH of them for 100% Wisconsin Retirement System benefits.
4. Their combined salaries cost over $1.53M annually (and + 3.5 to 4% per year).
5. Their combined benefits cost over $560K annually.
6. 20 senior staff members cost us over $100K EACH per year.
Imagine if:
1. We used $200K of the $1.75M Education Jobs Fund money to offer each of these people $10,000 to commit to retiring at the end of the 2010-11 school year.
2. That wipes $2.1M of costs (salaries + benefits) off the books.
3. Now say we replace them with teachers making even...say...$40,000.
4. New salary cost would be $800,000----instant $730K savings.
5. New benefits costs would be about $290K....instant $275K savings.

Those moves would reduce our school district budget by over $1M.
Those moves would create jobs for fresh, energized teachers.
Those moves would not hurt the retirees; typically retirees make out better in retirement.  And they've done their time.
And the best part is that the savings keep on getting better.  It's far more of a burden to carry $80K, 30+ year employees on the payroll than $40K, younger staff.

So...why isn't this a "gimme"?
We get it...some of you are saying...but why are we giving them $10K each?
This is a once in a LONG LONG time opportunity.

But the district only wants to "consider it" in closed session.  The following is taken from the Situation Report for this Monday night:
The following recommendations were adopted by the Management Team on 9-2-10.
3. To consider the use of EdJobs program to fund retirement incentives as an SPEA negotiations item to assist in the retention of staff in future years.
Retirement Incentives. These funds present an opportunity to consider negotiation of retirement incentives w ith the SPEA. Such actions might reduce the long-term costs of SPEA staff ing, thus helping to retain future jobs. As this would need to be a negotiated item, [Says WHO?] the administration would like to discuss this option or possibility further in closed session tonight.

And why does the district feel offering a retirement incentive has to be negotiated?
It's called an OPTION, folks.  No one HAS to take it.  It's optional.  That's kinda the way an option works.   In fact, it serves as the basis of many powerful offenses in football. [Gratuitous football reference]

Therefore, being an OPTION --as opposed to a FORCE, it does NOT need to be negotiated.
Simply state that the offer is eligible to anyone of retirement age that meets retirement requirements.  In fact...offer it on a first come, first serve basis.  Create incentive to retire early and retire often.