All Five Star District employees participate in 1.5 percent salary reduction to meet PERA mandatory increases

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School districts across the state have faced substantial budget cuts during the past few years due to shortfalls at the state level and increased costs for benefits such as healthcare and retirement pensions.

For the 2012-2013 school year, the district anticipated needing to cut roughly $12 million. As was the case for setting the 2011-2012 and 2010-2011 budgets, the Five Star District used a multi-step public process for gathering input on the community's values and priorities as they relate to budget cuts for 2012-2013. As part of that process, more than 4,000 members of the Five Star community provided input through an online survey in February.

Superintendent Chris Gdowski announced his budget plan in April. Given that 87 percent of the district's General Fund budget goes toward employee compensation, a significant portion of his plan called for employee contributions to address the budget shortfall. The strongest preference amongst survey respondents was to preserve jobs and make more reductions to salary/benefit levels for all employees.

The superintendent's plan called for about 60 full-time positions to be cut for 2012-2013. This was far less than the previous two budget cycles (2010-2011 and 2011-2012), when more than 150 full-time positions were part of the budget cut plans for each of those years.

Part of the superintendent's plan called for all employees to participate in the required Public Employees' Retirement Association (PERA) Supplemental Amortization Equalization Disbursement (SAED) through a 1.5 percent salary reduction.

The long-term financial stability of PERA has been a much-discussed issue for many years now. Legislation in 2010, which amended previous legislation, identified the SAED as an additional contribution that may be funded from money available for employees' salaries. At the time of passage, the basis of the legislation was commonly referred to as 2+2+2 in reference to the shared responsibility that included additional contributions by employers (AED) and employees (SAED) as well as reduced benefits to existing PERA retirees.

Prior to July 2012, the employee portion, or SAED, had been exclusively paid for by the district since it went into effect in 2010. Effective July 2012, classified (support staff) and administrative employees started participating in the SAED through a 1.5 percent salary reduction, which will increase to 2 percent in January 2013.

The district started negotiations with the teachers' association in April. As outlined in the master agreement between the district and the association, negotiations took a break for the summer months between June 15 and July 31. They resumed in August. Given a tentative agreement was not reached, negotiations have since moved to the fact-finding process.

The Board of Education had to adopt a budget for 2012-2013 by June 30, 2012 to comply with state law. The budget can be revised up until Jan. 31, 2013. As allowed by the Colorado Constitution and state statutes, the Adams 12 Five Star Schools Board of Education approved budgetary resolutions at its regular meeting of June 20, 2012 that went into effect Sept. 1, 2012 for certified staff (teaching staff). In its action, the board froze any pay increases for years of experience (movement on the salary schedule for an additional year of service), and implemented a salary reduction of 1.5 percent effective Sept. 1 to pay for the PERA SAED, with an increase to 2 percent effective Jan. 1, 2013.

The superintendent's budget cut plan also called for three furlough days to be taken during the 2012-2013 school year. A furlough day is a temporary layoff from work in which the employee is not paid for that day. At this time, the calendar for the 2012-2013 school year does not include any furlough days.

We hope this provides some helpful information in how the superintendent's budget plan has been implemented over the last several months. We will continue to keep you updated concerning the budget for 2012-2013 and for future years.