Giving Away a Bargaining Postion: Superintendent’s new contract

To give credit where credit is due, the SAU Board is to be congratulated for striving to retain Dr. Metzler, but they have gone overboard.  Taxpayers should take note because the superintendent’s new contract has given away a bargaining chip that a more prudent board would have kept firmly in the district’s purse.

This year the SAU Board was tasked with a “performance and merit review” for the superintendent.  In hindsight I now understand that to mean consideration for a performance bonus and a raise.  That’s all the board was required to do.  Instead, the board extended the superintendent’s contract by three years and increased his benefits along with rewarding his performance with a 3.24% raise and a 4%  bonus.  (4% was the maximum bonus allowable under the contract.) Dr. Metzler’s work this past year certainly merits a bonus and a raise, as the board clearly recognizes; however, the board unnecessarily sweetened the benefits pot and that’s where I take issue.

The Superintendent’s benefits package was enhanced as follows:

• OLD — Forfeit of unused vacation days in excess of 10    NOW — can accumulate 40 days
• OLD —  85% paid medical plan    NOW —  90%
• OLD —  75% paid dental plan     NOW —  90%

Although the money is not consequential, this will, I fear, have far reaching consequences when it comes time to again negotiate the teachers’ contract.  This signals to all parties that the board is willing to shoulder more of the cost of benefits – precisely the wrong message to be sending to unions and a nightmare to taxpayers who shouldn’t need to be reminded that New Hampshire has one of the highest unfunded public pension liabilities in the country.  What credibility will Dr. Metzler have asking teachers to reduce their benefits when he himself has seen his own benefits increased?  Brace yourselves taxpayers.  This indicates to me benefit costs aren’t likely to be more fairly borne by district employees any time soon and you have your own elected officials to blame.

Northeast Demographic Shift Plagues New Hampshire

Northeast Demographic Shift Plagues New Hampshire.

Cash or Holiday? And other surplus tales

Sometimes money does fall from heaven.  SAU 55 is getting back more than $1.55 million dollars from surplus medical and dental plan contributions with Local Government Center HealthTrust, LLC.   The 2011 surplus was distributed on August 2, 2013.  The 2010 surplus, which is currently being challenged, will be distributed on August 26, 2013.  Participants in the plan can opt to take these surplus payments in cash or as a contribution holiday.  Electing a contribution holiday directs the refund to future insurance payments.  Which would you choose:  cash now or a reduction in future payments?

I’d like to see a debate about the merits of holiday vs. cash. I suspect most people would take the cash, but our SAU opted to take a premium holiday for the 2011 distribution of $423,301.  There are still a few weeks to decide how to take the remaining $1,132,250 (a figure which could be reduced because of a challenge to eligibility requirements for receiving the surplus).  I personally hope Mr. Stokinger and Dr. Metzler decide to take this giant refund in cash.

A cash refund would become a budget item as one-time revenue and should be rolled over into the next budget year as surplus.  Clean, clear and simple. A contribution holiday, on the other hand, will artificially reduce the insurance line.  When that line item goes up the following year, it could be argued that we need to raise more money from taxpayers because insurance has gone up!  The holiday option will also free up money that could be spent in other ways rather than being put directly into the surplus.

In other interesting budget news, last year’s food service contract guaranteed a $81,000 surplus subject to numerous conditions and assumptions.  Somehow Timberlane food service is in deficit more than $100,000.  The 2013-2014 contract has the same food service management company, Whitsons New England, Inc., guaranteeing financial break-even subject to the same conditions and assumptions as last year but with a 10 cent increase on reimbursable meal prices and a 5% increase on mutually agreed upon a la carte items.

Perhaps you wonder, as I do, why a school board would agree to a contract that promises a sizable surplus.  I’ve been on the budget committee just one year and members were told that contracts were none of our concern, so with no experience with contracts I nevertheless have to wonder what budget committee oversight can be done for a surplus we didn’t even know was supposed to be there?  And how was that surplus to arise in the first place?  I’m happy to see that the 2013-2014 contract, which at the time of my reading was awaiting state approval, aims for break even.

From my point of view, surpluses are problematic things.  They should be completely transparent to the budget committee, they should be taken in cash and they should not be encouraged in contracts.

As I’ve said before, I am struggling to understand Timberlane’s budget. If I have missed some salient point, I invite Mr. Stokinger, Mr. Collins and Dr. Metzler to respond to this at any time.  I will be happy to post their response and I certainly invite corrections and education from any and all.