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Tuesday, Feb. 17, 2009 | San Diego Unified is inching closer to an exit bonus that could prod thousands of veteran employees to leave the school district. Known commonly as a golden handshake, it is one in a battery of ideas the school board is weighing to save money in a budget crisis that is estimated to cost San Diego Unified more than $63 million next school year.
But disagreements remain with the employees originally targeted for the bonus — teachers — over where the savings from the plan will go. District officials want to use it to help plug the looming budget shortfall. The teachers union wants to use the savings from teacher departures to push salaries closer to the county average so that San Diego Unified educators earn as much or more than their peers in neighboring districts, as originally proposed two years ago.
It is among the many pending questions about the golden handshake, still being hashed out in negotiations with employee unions behind closed doors. The bonus is meant to thin the workforce without resorting to layoffs. But it is unknown which employees will take the bonus, how many will be replaced, and what the ultimate savings will be from the plan. And the exact savings and benefits of the last golden handshake are still debated.
Originally planned only for teachers, principals and vice principals, the school board has now expanded the bonus to all employees, from bus drivers and attendance clerks to principals and managers in its central offices.
Mark Bresee, general counsel for the school district, said the bonus was broadened to prevent layoffs among all different kinds of employees.
“If employees leave the organization at the end of their career with an added bonus for their years of service, that is a much nicer way to [reduce the workforce] than a layoff notice to the least senior employees,” he said.
Unions that represent blue collar workers contended that it was improper to offer the bonus to some groups and not others. The group that represents school administrators has already given the thumbs up to the bonus and other unions are likely to follow suit.
“If you offer it to one group you should offer it to all groups,” said Jane Bausa, president of the union that represents teaching assistants. “That is only fair.”
But the school district is still locked in negotiations with the teachers union over the bonus. Including teachers in the golden handshake is considered essential to ensuring millions of dollars in savings from the plan, because of the sheer number of teachers and the pay gap between the newest and oldest teachers. Savings are smaller for other groups, such as clerical workers, and depend heavily on keeping some of the jobs they leave vacant.
Teachers union leaders are concerned that the proposal is too rushed and could “hijack” a plan intended to boost salaries to close the budget shortfall instead. A new golden handshake was one in a number of recommendations made two years ago by a joint task force of the school district and the teachers union tasked with finding ways to bring salaries closer to the county average.
Teacher salaries fell 7.3 percent short of that mark in 2007 — an estimated $85,500 for an individual teacher over two decades — and union leaders say they still lag neighboring districts despite a subsequent raise that fall. Many of its recommendations to improve teacher pay, such as finding ways to reduce the costs of running under-enrolled elementary schools, have since been considered as ways to balance the budget instead.
The union doesn’t want that to happen to the golden handshake. And though it has long championed the bonus, the union is alarmed that teachers will be left scrambling to cover extra work if hundreds of teachers are not replaced.
“This will add more work to our plate,” said Camille Zombro, president of the teachers union. “It could be a win for everyone. But the district needs to have a plan. Our workloads have already escalated hugely.”
The plan nearly mirrors the last golden handshake offered by San Diego Unified six years ago to survive another budget crisis. Eligible employees can get as much or more than 100 percent of their final salary, paid out over five years, a decade, or a lifetime. They must leave the school district but don’t have to formally retire. Workers must decide whether to take the bonus by May. Bresee said a minimum number of employees in each union or group must sign up or the deal will be withdrawn.
The idea is that by offering extra money to senior employees, San Diego Unified could actually save money by shooing more expensive employees out the door to be replaced by less expensive, less senior employees — or not replacing them at all. It is considered a less traumatic alternative for employees than the layoffs that San Diego Unified undertook last year to balance its books. New school board members have vowed to avoid layoffs if they can.
Advisers have estimated its total savings at more than $17 million next year and $60 million over five years if nearly one-third of exiting employees are not replaced. Teachers make up the bulk of those savings. But the school district has to balance the desire to thin its workforce with the needs of schools and employee contracts that limit workloads and class sizes, said Sam Wong, chief human resources officer at the district
The savings are highly dependent on how many employees leave and how many are replaced. And the resulting loss of veterans can boost costs for training or even lead to rehiring the same employees. Replacing all exiting employees, in some scenarios, could actually cause San Diego Unified to lose money, according to the analysis.
Refilling all the vacancies for classroom aides and special education assistants that take the bonus, for example, would cost the district more than $2 million over five years. How many employees will be replaced is unknown, Wong said.
The last golden handshake was estimated, at the time, to save the school district $12 million in its first year and $21 million over five years, calculated based on the actual number of retirees and their salaries. Teachers were crucial to the plan and provided the majority of its savings. Prodding veteran teachers to leave was believed to result in $9.7 million of the initial savings and nearly $19.5 million over time.
No analysis was done on the golden handshake savings after the fact, and it is debated whether it ultimately saved money. The bonus also caused a brain drain that led to the rehiring of more than a dozen top administrators who earned a total of more than $1.8 million while also collecting their exit bonuses. Parent leader David Page, who oversees a district committee on the use of federal funds for disadvantaged students, is not convinced that the plan was worth its costs.
“We have trouble already with keeping experienced teachers in schools. Allowing them to leave early is a travesty,” Page said. He added, “We invest all that training in them for 30 years and then we pay them to go.”
Nor is it clear that the bonus will convince more employees to leave. Some employee groups, such as the teaching aides led by Bausa, earn too little to make a single year of salary worth an early exit, and do not get health care after they leave. Bausa said that it would probably only make sense for employees who already planned to depart.
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