Decision on one-time payments set for fall

A proposal that would give Allen ISD employees a one-time payment in addition to their annual salary this year will have to wait until later in the school year, school board trustees decided Monday.

At the board's regular meeting, trustees unanimously approved language for the 2012-2013 salary book that gives the board autonomy to implement the one-time, lump sum payments, which were first presented as an option by human resources staff members in April, if it so chooses later in the year.

The agenda item that included the action, as presented by Chief Human Resources Officer Kent Turner, would supplement the previously approved $40 increase in district contribution for TRS ActiveCare benefits and a one percent midpoint raise for each employee in the district.

"Tonight, all we're asking for is approval of the language to go into the salary book so that if at a later date we want to consider a one-time lump sum payment, we would be able to have those discussions and we could do that," Turner said. "Should we choose tonight not to put that in the salary book and not approve this language ... then we would not be able to have those discussions throughout the course of the 12-13 school year."

The language allows the board to implement the payment at any time during the school year. The funds would be non-discretionary, meaning a non-exempt employee would be able to receive the payment without regard to overtime, and not TRS creditable. The language gives the board the flexibility to decide which employees receive the payment, how the payments would be made and what kind of communication efforts should be made toward employees who may receive a payment.

Superintendent Ken Helvey said serious discussion as to whether or not the payments should be implemented will likely come during the month of November, when the district has had enough time to go over its July tax rolls and get a feel for how other districts in the state are compensating their teachers.

The payments, which would be paid for using the district's $42.3 million fund balance and could cost as much as $1.86 million, are representative of a conservative approach to compensating teachers this year while taking into account projections of reduced per-student funding over the next three years, Helvey said.

"[A one-time payment] doesn't obligate you to the future," he said. "A salary adjustment obligates you to the future. When we're looking at all the data next fall, this may not be something we want to consider, but then again, it might be. So I don't want to leave it off the table."

Prior to the vote, Trustee Louise Master asked if the board could consider increasing the one percent midpoint salary increase after its budget audit in June, since many teachers who are not covered by TRS Active Care have seen similar increases to premium costs and would not benefit from the increase in district contributions to the health plan.

"If we're looking at a one-time payment that's a million dollars, and a one percent increase is an additional million, then we need to have that conversation as to whether or not it would be wise just to go ahead and give an additional one percent," she said. "If, as we discussed, doing a percentage of across-the-board employees was less than the million for a one time lump sum payment, that's something to consider as well."

School board President Gary Stocker said such conversations could take place at the same time as a discussion regarding the resetting of the board's target fund balance percentage set for July or August.

"It's easy to look at that [fund balance] and think 'wow, that's a lot of money,' until you realize what it's being used for, and sometimes it's not that much," he said.

Additionally, Trustee Mark Jones requested that district staff members do a five-to-eight year fund balance projection to assess the downward trajectory in increases to the fund balance over the next several years. A projection presented at the April 9 budget workshop shows the fund balance increasing by $5.2 million in 2011-12, with diminishing increases each year, culminating in a comparatively scant $351,00 increase in 2014-15.

Budget recap

Coming before the discussion regarding teacher compensation was a budget recap from Assistant Superintendent of Finance Mark Tarpley, who began by outlining this budget year's three priorities: increasing teaching staff to reduce class sizes to near-2010 levels, increasing compensation and benefits following the salary freeze of 2011, and boosting student support and counseling at the secondary level.

Enrollment, Tarpley said, is anticipated to grow between 3 and 3.5 percent this year. While last year's school finance bill set into motion a series of reductions in per-student state revenue, the passage of the Tax Ratification Election last October has given the district the local revenue necessary to cushion the initial $600-plus drop in revenue between 2010-11 and 2011-12, though state funding is anticipated to continue to decrease through 2017.

While the district was able to smooth out its losses, Tarpley said, efficiencies must continue to be found so the district can decrease expenditures per student to keep up with the falling revenue.

Several districts represented by Thompson and Horton have entered into a lawsuit against the state, which the district joined in November 2011. In the trial, set for Oct. 22, Allen and other districts will argue that the state has failed to adequately fund its schools in light of $5.3 billion in cuts to education funding. While a court decision is expected before the start of the 83rd Legislative Session, no change is expected next year to the school finance formula, Tarpley said.

This year will be the first balanced budget for AISD since 2007, the year before the district began using its fund balance to meet its budget. With $142.3 million projected in revenue and $141.5 anticipated in expenditures, the district is expecting an $816,000 surplus in the fund balance this year.

The district's student nutrition fund, meanwhile, will absorb a federally mandated 10 cent price increase. The fund's budget also accounts for improvements to the Norton Elementary School kitchen, equipment upgrades including electronic menu boards at 14 campuses, and the district's participation in the federal Healthier U.S. Schools Challenge, which has boosted the presence of fruits, vegetables and whole grains in district cafeterias.

The district will maintain its $1.17 maintenance and operations tax rate and 50 cent interest and sinking tax rate, both of which have reached the maximum rate allowed by state law.

The budget is set for public hearing and board adoption June 18.

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