By Crystal Hayduk
Chelsea School District (CSD) employees will receive an extra lump sum check in November, thanks to an extension agreement reached last fall between the Chelsea Education Association and the Board of Education during the interim leadership of Superintendent David Killips.
According to the terms of the extension agreement of September 2015, if the district has an unrestricted fund equity of at least 15 percent for the preceding school year based on a certified audit, then 80 percent of the unrestricted dollar amount above 15 percent will be used to increase pay for the subsequent school year.
The remaining 20 percent will be returned to the district’s fund equity.
Step increases and lane (advanced degree) increases, which had previously been frozen, were resumed July 1, 2016, and will continue in 2017. The additional cost to implement the pay increases is $309,000.
According to Dr. Julie Helber, district superintendent since July 1, “the fund equity balance was roughly $665,000 above 15 percent. Eighty percent of that amount is about $532,000. Subtracting the additional cost of staff raises, the district is left with about $222,000 to be used for ‘other compensation.’”
The extra pay is considered “off scale” and will not impact next year’s budget. However, if the district ends next year with fund equity above 15 percent, the same benefit will apply.
Two-thirds of the extra money will be distributed to CEA members (teachers). One-third will be given to other employees such as paraprofessionals, office staff and custodial staff, as well as administrators.
The lump sum payment that teachers receive will be based on a percentage of their salary. “A new teacher will not receive as much as an experienced teacher,” said Helber.
However, salary percentage calculations will not apply for employees in the non-teacher category. Full-timers who work 35 or more hours per week will receive an equivalent amount; whereas part-timers will receive a smaller amount.
“I have to praise the district’s administrators, because they wanted to make sure that the money was distributed equitably,” said Helber. Since the category includes employees who earn a wide salary range, the equal division of funds means it is fair for everyone.
One stipulation is that non-union employees must have worked during the previous year to obtain the lump sum check; though all CEA members will receive a check.
According to Teresa Zigman, executive director of business and operations, “approximately 275 employees are eligible to receive the additional equity payment.”
A school district’s fund equity account serves as a savings account to be utilized in difficult financial times or to protect the district in the event of a catastrophe when money is needed. “It’s like your own finances,” said Helber. “You want to make sure you have a certain amount of money in the bank in case something happens. It’s responsible fiscal management.”
A healthy fund equity balance also reduces or eliminates the need to borrow funds from the state in order to pay employees until the State Aid payment is received later in the school year, thus saving the cost of interest. “Luckily, we’re in a position to meet our expenses this fall without borrowing,” said Helber. “But for now, we didn’t have to borrow $207,000.
“Last year the board determined that they could go down to 15 percent and sacrifice the fund equity above 15 percent to give back. That was real progress for the union and good work by the board to do that,” she said.
Zigman said that the last time CSD’s fund equity dipped below 15 percent was in the 2002-03 school year.
The terms of the extension agreement also extend the CEA contract to June 30, 2018.
